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SGH

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54.5¢ slater & gordon limited

Cash Flow or Cash Burn, page-70

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marri

2,397 Posts.

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17/05/16

10:20

Post #: 17786373
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Originally posted by walkingeagle ↑

You don't seem to have provided a link to the accounts you were looking at, TM (I can still see it too because it is on the following message in the thread). I can now see you were referring to the accounts of the UK consolidated group, not the LLP accounts (yours were probably more relevant). Both these and the UK LLP accounts were signed on the same date and both received a clean bill of health from the auditors, EY, who didn't raise the issue of going concern.

On page 2 of the LLP account, the overall group situation is set out in detail, including the available facilities and the extent of the increased use of these in HI (to 31 Dec 2015). The statement made on P15 of the consolidated UK accounts about the facilities being used in full at the time the report was signed (31 March 2016) is only made in the oconsolidated accounts. This is odd.

If the facilities were drawn to their maximum by 31 March (the same day SGH was due to submit its plans and proposals to the syndicate) and the $119.2m 'burn' (not $67m - see page 15) was the result of unprofitable trading in one quarter alone - and with EY knowing that a month later the Banks were either going to renew or call in the facilities, there is no way an entirely clean audit report would have been signed.

I suspect there is a lot more to this than meets the eye. Guess we'll just have to wait until August to find out. Hope the share price continues to fall - it will soon be at its lowest ever - and all based on guesswork. Good pickings for the patient types?

Always follow the money, which in this case is the Banks' renewal of facilities for 2 years (at relatively modest cost - and why bring in warrants if they didn't think the SP would rise?) and the fact EY would have set themselves up for an almighty fall if they hadn't known the Banks were going to be easily persuaded.

Uneducated guesswork - the 'black hole' on any news whatsoever about trading performance continues

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"Always follow the money, which in this case is the Banks' renewal of facilities for 2 years"

So says walking eagle. The Directors of SGH should know something about their company however they don't seem to reaching into their own pockets to buy any shares.Given that SGH is such a bargain…according to many posters,this is a bit odd isn't it?

SGH Price at posting: 35.0¢ Sentiment: Sell Disclosure: Not Held
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