Finchy - the cashflow position is my concern - and unfortunately companies do not go bust becasue fo a lack of profit - it is a lack of cash. It is the repayments of loan principal which concerns me - I can't believe the loans in place would be interest only - given they are against leasehold properties as compared to freeholds - I hope I am wrong.
Maybe the banks have granted/will grant some form of moratorium on debt repayments but even the future looks somewhat bleak:
smoking ban
softening economy - less discretionary spending
credit crunch - meaning expensive and tight credit
Asset valuations falling
and one final disturbing feature from HLG's broke presentation - the pokie licences appear to fall back to HLG in the event of default - even though rents have allegedly been paid to date - the current quarter could be very very tight for the reasons detailed in my previous post.
I hope NLG survives - but who is in charge of this company's destiny ? Its certainly not the shareholders or the management - its the banks
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Simon Kidston, Non--Executive Director
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