That's a pretty quick way to lose $800 million. Senior management plus their advisors should be pretty nervous.
WIP adjustments based on new accounting standards are down more than expected but seem pretty harsh on law firms like S+G.
Cash flow and general performance was significantly down as expected and one has to question senior manager competence for declaring that they would still meet guidance in late November. Class actions may now have some potential.
Good News:
ASIC review over.
UK Writedowns taken in one big hit. These writedowns take into account future legislation that may never come to pass.
Australian business still doing relatively well.
A lot of one off purchase costs last year that won't be repeated this year.
Overall:
Generally worse than expected and senior management have a lot of answer for.
Long recovery from here but the share price was almost at liquidation levels due to shorters.
Whilst a capital raising is a possibility, I still consider it unlikely subject to the performance of the business in the second half.
I remember buying Centro at 2.5 c and watching it recover.
SGH listed at $1 when it was a fraction of the size many moons ago.
Give it a year or two and I expect SGH to fully recover. Too bad I missed 47c
SGH Price at posting:
71.0¢ Sentiment: Buy Disclosure: Held
