Ann: Full Year Guidance , page-11

Simple.

With a distribution business such at DDR's, one needs to look at cashflows over a few years, and certainly not just look at a 1/2 year. Remeber for the half they turned over $221m or $36m per month!!!

They turn over their stock monthly, or 12 x's a year, so debt levels of $50m is not an issue. Again distribution companies such as DDR which have high turnover, low margin usually have alot of debt to pay for stock. Interest cover is 4.7x's which is quite good. If the business wasn't well run they int today's tough climate there is now way St George would have increased their revolving facility (which is like an overdraft) to $50m.

This is a type of business that needs capital to grow. The more they can borrow the more stock they buy and the more they can sell. I don't normally like business with debt, however this is an exception. I also don't normally like distribution businesses which usually have no 'moat' or competetive advantage. I simply bought this business for its A1 MD, David Dicker.

Stock turnover is the key here. If it falls to anywhere below than 10x's thats a bad sign.

APJAPJ I can almost guarantee you that cashflow from operations for the FY12 will be positive and will be b/w $5-$10m.