I can't compare with SHJ, never looked into SHJ. If SHJ use billed hours as a milestone for WIP on no win no fee then that doesn't sound as robust as what Salter do/did to me.
I'm not sure improve WIP is the right way to think of it. The whole WIP thing boils down to transparency I feel. In principle there is nothing wrong with matching effort expended with outgoing expenses used on expending that effort. Otherwise known as accrual accounting.
What the new methodology will do (should do) is provide more confidence in how the figures are derived and in turn hopefully give institutional investors the line of sight they are after.
A consequence is a leaner year or two on the bottom line as previous WIP is wound out of the system and a greater portion of new work is just recorded as an asset (inventory) rather than booked WIP (receivable). Of course it will have no impact on cashflow as that is calculated on pure cash in cash out.
SGH Price at posting:
59.0¢ Sentiment: Buy Disclosure: Held
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