half year results, page-2

Finch

Trying to predict the half year result is like looking for a needle in a haystack .

( without a metal detector or a magnet )

Andrew Price and the board inherited major problems under Toby M and and Harry Boon and if they did not arrive to kick them out I sense the PPX would be less than .03c now and the PXUPA around $3 .


As far as the half year result is concerned most of the changes that have occurred only happened in the last 6-8 weeks , when the new board acted swiftly to implement more cost cutting

The challenge for this half years results is the new board have only been in their seats just long enough to remove the smell of the seats , but not long enough for the changes to impact the last half years accounts to much .

On top of that as a result of the the fall of the board there is likely to be further short term costs in this half years accounts associated with retrenchments in the UK , write downs on sales of closed businesses in South Africa and Italy and capital costs associated with walking away from leases quickly .

Even golf club sponsorship's may have had to go at a cost .

In addition big $$ payouts for the previous CEO , CFO and all of the board will weigh on the half year operating result .

What I do hope to see however is

Revenue to be around 1.9 billion to 2 billion for the half year .


EBIT in Australia / NZ to remain strong and come in above $5 million

EBIT in Canada to also remain positive and be above $3 million

European EBIT to show some sign of improvement with the removal of Italy from the major loss last year


I would like to see Gross profit getting closer to going over 20% from the 19.3% number it came in at 2011

We really need to see ongoing Operating costs continuing to drop sharply as they did last year , hopefully greater than the fall in revenue

I also want to see interest costs to be dramatically less than the PCP with falling int rates accross the globe and the repayment of debt from asset sales reducing the burden on cash flow

As Diversified products are a part of the growth program i want to see diversified revenue continuing to head north in the PCP same markets

I want to see more than 12 out of the 18 countries PPX operate in profitable in their own right .

At the AGM I think it was said Germany , UK and Netherlands were the trouble regions ,

I would like to see some commentary on whether over the next 6 months it is possible to see light beginning to shine from initiatives started in those regions .


As far as the overall operating loss is concerned , if it is 15% worse than the PCP I will be disappointed .

If it is about the same I will be comfortable as long as the directors commentary is hopeful

If it is better that the PCP I will be delighted and a buyer of both PPX and PXUPA ,

I am particularly going to focus on the commentary from the chairman who is an actuary and understands numbers and how they can and wont add up

I also want to see if the speak of the future is the same , less than or more positive than they felt it was at the AGM , when they held a level of conservative optimism in the likelihood of turning this very damaged business around .

Just my opinion , and as a shareholder I do hope they can re float the titanic .