D4E ratio, page-383

Very much appreciated Nick.

I think the forum is moving in the right direction

If you start with slide 89 where it is considered whether there have been investments for future growth. I think you can agree that SGH have invested heavily in UK growth?

Slide 90 then as you correctly point out starts with accounting earnings (historical).

However the same slide also explains that we are looking for normalised earnings. In the case of SGH we all know we have been through restructuring and pip so those expenses need to be taken out as they are one-offs. For future cash flows it would be expected that they would improve as restructuring and pip takes effect.

Do you agree to this point?

So for this valuation method while starting point is historical normalised accounting earnings the important bit is the future sustainable cash flows.

That is what creates a fair valuation

Now we have the model for valuation of SGH.

Is anyone keen to run some cash flow figures through the equation and let us know the fair value of SGH based on those figures/ calculations?

Thanks.

Ps It will put your time to good use. A time many of you seem to have plenty off