NPAT? it is still CASH FLOW that is critical, page-2

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27/08/18

13:33

Post #: 35205539
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Originally posted by dexternot ↑

Announcement is due by close on Friday.

By now the numbers (operating) should be locked in. What is not are the numbers relating to provisions, write-offs and so on. No doubt the auditors are having a look at all of them. The auditors have the final say. No doubt there are 'interesting' discussions going on about this matter!

Of note is the statement made by the company earlier this year whereby they expected (I believe) a NPAT of $34.7 million. How, given the first half's results and subsequent trading conditions, that will be achieved is beyond me. I think that it can only be attained by manipulating the provisions, etc.

Remember that the banks have the first 60% of any asset sales (and the accountants if involved will take a fee). So the best the company can receive is 40% from any asset sale. Furthermore, the banks will likely apply any funds received in the inverse order of the company's maturity profile (i.e. against the last occurring maturity obligation first).

Plainly, the company is not in a position to generate sufficient funds from operations so meet its strategic costs and its debt (principal obligations) over the next 2 years.

Therefore, it is likely that the company will have to have an equity issue. The amount and pricing of which is at this stage not able to be determined with any degree of confidence. Once the results are published, realistic assumptions can be made. That said, the raising will have to be significant and at a steep discount to the current share price.

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so what would it be worth for the whole company to be taken over by a equity fund...could that happen

RFG Price at posting: 59.5¢ Sentiment: Buy Disclosure: Held
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