PGC paragon care limited

1.39%

35.5¢

Looking forward to Interim and Beyond., page-133

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Christos12

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28/04/17

02:25

Post #: 24315075
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Originally posted by joewolf ↑

My understanding of the amount involved was not enough to explain the fact that they have high stock. If you look at the numbers cost of sales is $33 million but stock is around $22 million that by implication is 4 months stock or a stock turn of 4 per annum.

Trade creditors did not move that much as at 31 December 2015 to 31 December 2016. They may have taken discounts but in fact it did not have that much impact on PCP vs Current period.

What I think they were trying to comfort shareholders on was the fact that they did not generate as much cash flow as we expected which would have been a lot better had they not taken discount. In fact it may well be just a factor of the changing business that the half year does not generate the cash but the second half does. Or given the Capital equipment bias it may well just be hit and miss but that annually the cash flow will be there.

Look at the actual inventory levels over the 4 halves and I don't think purchasing in to take advantage of discounts answers the basic question. I also don't think that given the type of equipment that its wise to stock-up unless its consumable - my read on that hint was that the creditors was down as they took early settlement discount not related to actual stock holding.

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Thanks to all regarding the explanations of the inventory. I will need to do some more research as I find this a little worrying, particularly as they are attempting to build a large portfolio of products through acquisition. Liquidity could be a problem in the future and could constrain growth.

PGC Price at posting: 75.0¢ Sentiment: None Disclosure: Not Held
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(20min delay)
Last 35.5¢		Change -0.005(1.39%)		Mkt cap ! $587.6M

Open	High	Low	Value	Volume
36.0¢	37.5¢	35.0¢	$665.3K	1.873M

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No.	Vol.	Price($)
4	84487	35.0¢

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Price($)	Vol.	No.
37.5¢	114459	2

View Market Depth

No.	Vol.	Price($)
3	80369	0.350
4	58764	0.345
4	44444	0.340
1	2000	0.335
1	8500	0.330

Price($)	Vol.	No.
0.375	14459	1
0.380	30000	1
0.385	10000	1
0.390	31837	2
0.400	123348	3

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