Ann: Veris 1H FY19 Results Presentation, page-25

I agree with many of your comments SimonGr, even your cheeky one

However, I think it’s worth touching on the balance sheet a bit more as my view is respectfully quite different to yours SimonGr.

In the Appendix 4D, the company has had to discuss its “Going Concern” status and mentioned that they have had to renegotiate covenants and will need to do so again before June 30 (I.e. they are likely already trying to organise this or exploring alternative funding options). The strong inference here is that the BS is very stressed and the Banks are very uncomfortable with their exposure. It is rarely stated in accounting land as starkly as this.

Furthermore, a company cannot liquidate their receivables in isolation, their payables are very real and their workers need to be paid. They leant very hard on the working capital lever at the 1H19 result (hence the solid cash flow which made end of balance date debt look better). Working capital now looks in-line with historical levels so this is a lever that probably can’t be pulled again.

Again, if they sell their tangible assets to repay their debt....they will have basically no business so this isn’t really an option either.

The best case is that with the banks now involved VRS demonstrates greater financial discipline combined with the banks being forgiving for long enough for the benefits of VRS’ discipline to come through.