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14/03/17

07:27

Post #: 23317726
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Originally posted by mike8654 ↑

"My only fear is cutting out the cancer may have caused some haemorrhagging that in long term could be fatal"

I think everyone was thinking that from Jan 2016 forwards SGH would start its recovery back to some level of financial health, though obviously it was going to be a long slog.

And the results for the 6 months to Jun 2016 did show considerable improvement over the 6 months to Dec 2015.

But if you look at the results for the 6 months to Dec 2016, it's pointing to a terminal situation - which can't be explained away by the small level of seasonality in the group's performance.

Comparing Dec 2016 half to the Jun 2016 half, they had a loss (before impairments) of $56.4m in the December half, compared with $56.8m in the June half - so much the same result.

While there's obviously some lumpy non-recurring items in the December results, the 2017 1H loss was on a much lower turnover - down 23% in $A terms in the December half, so it's pointing to lower levels of net earnings (or higher levels of losses) as a percent of revenue.

All of the main indicators for financial health were either the same or worse in the December half compared with Jun 2016.

It looks like all 3 businesses have suffered some serious damage in the second half of calendar 2016.

Even if SGH did not have $700m+ of debt, it would still be a company with a question mark over its future.

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I think you will find if they didn't have the debt, the public would be have less fear using their services (alot of the reason behind the reduction in revenue from previous halves is from public fear that they will go under mid case due to this debt). The certainty of their future is important for the public as well as shareholders.

SGH Price at posting: 8.9¢ Sentiment: Hold Disclosure: Held
6 Upvote

0 Great analysis

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