What to expect for H1, page-11

NothatWarren

SGH paid 6.3 times profits after tax for SGS (qpp psd). It paid zilch for NIHL cases.

SGS is an excellent business with margins which exceed those elsewhere in the SGH group. The case turnaround in SGS is quicker than that found elsewhere in the group. Therefore it ties up less capital than the rest of SGH in WIP.

By no means did SGH pay too much for SGS and I was seriously annoyed at the low price I (as a WTG shareholder ) was asked to vote through. Actually I voted against the sale of QPP Psd. and I have got over my annoyance.

NIHL cases are another matter. It is not all bad or all good and time will tell but it certainly ties up capital for 18 months or longer per case.]

If SGH has too much borrowing and has increased it - blame NIHL , but remember nil paid - probably $ 90M invested in process
in last 6 months ( QPP had already invested $144M in NIHL at time of takeover) and all the dosh is coming home to daddy soon with a handy $40m profit. ( some of the $144m will relate to cases which are binned so not quite all - say more than half)

PLEASE stop saying SGH paid too much for QPP PSD. It absolutely didnt. 6.3 X profits in in the lowest decile of profit multiples in the history of listed takeovers. SGH got a stonking steal! Get your facts right.

It wont be long before anal analysts get their heads round the fact that SGS will reduce the amount of capital employed as compared with the rest of SGH. Maybe you too.

Mel