Ann: Half Yearly Report and Accounts, page-14

I think this result is confirmation that that will need to be a capital raising in the not too distant future.

They have managed to get debt covenants loosened from 2.5x EBITDA to 3x EBITDA for 12 months but with operating cash flow of only 3.4m and an overall decrease in cash to just 2.5m in spite of the fact the previous dividend was fully underwritten and they drew down more of their debt facilities.

Also the sheer number of store closures they are going to do doesn't bode too well in the near term given that they are getting a slice of total sales made so looks like more pain ahead in the short term.

Have updated a chart I keep of their store numbers and unfortunately it shows that the deterioration in outlets is picking up pace particularly with regards to the Bakery/Cafe Division. Worryingly one of the concerns I had previously raised was whether momentum would be lost in the growth of the Coffee Division similar to the pizza division after its acquisition.

If you look in H1FY16 they had net additions of 68, then H1FY17 this dropped to 40 and now H1FY18 its dropped to just 18. Without the growth of the coffee division then the overall store numbers could start dropping quite dramatically.



Will keep watching to see signs of things being turned around at which point the business may be undervalued but at present I can't see where and if things will be turned around.