chances vpg go under, page-22

Yes, the last annual report, apart from the goodwill impairment charges, did indicate significant cash earnings (EBITDA of AUD301mln).

I think the rental property ownership and fund management business will still post earnings largely consistent with FY2008 although rental income may decline. Fund under management increased by AUD3bln as per CEO. Hence should be some increase here.

Per the last annual report, these two stable and low risk businesses contributed 62% of its total revenue.

Re development, trading and VCS business, revenue will drop, and realised writedown such as the recently announced (i.e. recovery value of AUD65mln vs book value of AUD82.4mln) will drag on earnings.

However, other than the realised writedowns, the non-cash assets impairment, though go into Income Statement, does not impact its cash flow position. What we will see is likely negative NPAT due to asset impairments, but cash earnings may still be able to service its debt obligations.

The assets impairment charges will save them tax payments. As it is more likely than not a going concern, the impairment charges will recover as we come out of the downturn, and as VPG expands its fund management business.

How can a company be sold off so heavily that its MC is less than 10% of its revenue from the previous year?

Market Cap A$67.5 mil
30-Jun-08 A$727.30 mil

The divy was more than the current SP, this is a profitable business and the report should reflect earnings to be down as you would expect but not out.