Forecasting is based on statistics and past experience. The outcomes from the HL claims cases, while guided at overall A$82m ( half to SGH) to June 17 are difficult to forecast ( newish trade) . If you have ever moved offices you will know momentum is lost. Since the UK Chancellor announced changes coming to cut dross in the system, my legal friend says there is bound to be a bit of sisting ( Its a scots law term & Basically means delaying a case) by those who end up writing the cheques. Frankly I have no idea whether this is taking place but my legalbuddy knows more than I do. If so it could mean the cash generative stage ( which we are told SGH has reached) may not be as good/ quick/big as SGH investors hope. I have no idea whether there is a bigger problem than I have assumed.
My waters tell me there will be a recovery. My guess is that H1 2016/17 will be a happier place. On a 2-3 year view I am hoping SGH turns out to be great. If SGH can do to the UK legal profession what the big supermarkets have done to our high streets it could be a great investment. Much will depend upon which horse the investing institutions decide will be the winner. In the UK the market certainly seems to like Redde........but it is small relative to SGH.
Watchstone ( was QPP) is dishing out 90p (GBP) cash tomorrow and my plan is to invest more in SGH because they look good value. I am not in a hurry and will split investment before and after announcement and new guidance. I have had to move brokers to do so and that has been a pain. I wish SGH had a dual listing. By not having a dual listing it may be missing a trick. Its UK trade is bigger than its OZ business. ( There are SGH shares listed in Frankfurt, Germany? anybody know why?)
Mel
SGH Price at posting:
82.5¢ Sentiment: Hold Disclosure: Not Held
