get the facts straight - big rise in sp coming, page-41

elzephyrus Post #: 3856369
"Hey Tiger. Where did you get the forecast profit figure of $38m from? That's not what management said. The guidance of $38m is for EBITDA, not NPAT. That makes a huge difference. Also, the forecast cashflow includes, I think, the presumption that McCourt Dando will win their case against a client (for $14.6m). If they don't win that, SSM will most likely show negative cashflow again. That means divis will be paid out from bank debt. Have a look at the cashflows over the last 2 years. Very poor."

S#!T, SSM is buggered, I better sell lickity split!!!!

I'm a facetious basketballer, I know. But zephyr with an L at the front and us bringing up the rear, you paint a grim picture. Maybe you weren't trying to do so.

OK I'll give you the benefit of the doubt. You were merely trying to point out a couple of errors or omissions in my initial post.

Firstly zephyr you are correct, the latest SSM financial report stated,“Our first half result supports our full year market guidance of EBITDA of $38 million underpinned
by a growing revenue base. We remain confident in the strength of the underlying business. We also believe that the next financial year will see the Company benefiting from a number of deferred new business projects to add to that core revenue.”

As for cashflows. SSM's revenues have been substantially increasing each year in recent times. I must admit that SSM's bank balance around reporting times over the last couple of years has been a bit fly blown. A snap shot of current assets in recent years does show the SSM bank account to be a touch dusty.



Yep, SSM couldn't have bought a pie with sauce with the cash at hand at the end of last FY. But I note they had $93mil in receivables. So I'd like to think my divy money is coming from the realisation of those receivables. I also note that although SSM's cashflow for the last 2 years has been as you state,'Very poor', SSM maintained total year dividends of 7.5c for FY07 & FY08.

Hey, how good are the SSM directors??? Had no money, still paid dividends and went back to the bank in the past year, when finance is becoming more difficult to obtain, and got some more money. SSM might stand for Super Smart Magicians. Or maybe the banks took a good look at SSM and were satisfied that the business was capable of servicing its debt. Who knows...........

With regard to the question of SSM paying further dividends after the upcoming 3.5c div, here's an interesting quote from the last SSM financial report:
"The Directors are committed to a sensible capital management strategy. The strategy is aimed at providing superior returns for shareholders, whilst maintaining sufficient capital reserves to fund the business both now and into the future."
No, I'm not saying the next 4c div is guaranteed. But you would have to agree there is a possibility of SSM paying the 4c div later in 2009.

The future prospects of SSM are well illustrated by the following:
EBITDA growth of over 12.1% during the current global economic conditions demonstrates the resilience of the business and confirms the underlying business is strong and sustainable. New contracts secured and existing contracts renewed particularly:
- SA Water (5 year metering services)
- Sydney Water (2 year + 6 year option metering maintenance)
- Ipswich motorway (Multi-utility relocation)
- APA Group (5 year gas meter services)
- Phase 1 Smart Meter Exchange Victoria

In summary, elzephyrus I felt the general theme of your post would lead people to believe SSM is a withering, diminishing business. To the contrary, in my opinion SSM has a promising outlook and is growing, even in difficult times.

elzephyrus you did make a couple of valid points, and even though I am a tad facetious from time to time, I am greatful for your alternate perspective.

Thanks, Tiger22.