going, going, gunns

If this bit out of Woodies posting last night is accurate then all I can say is Good night Irene. GNS is toast.

Where on earth are these guys going to find $100 mil of profit in the second half, following the spledid result of ~$400k profit on ~$360mil of sales in the first half????

GTP all over again!!


JP Morgan said Gunns was at risk of breaching the debt ratios in its borrowing covenants if it did not reduce debt.

"On our estimates the company has little to no headroom on some of its covenants," Macquarie Equities Research said.

Analysts said Gunns' ratio of debt to earnings before interest, tax and depreciation was specified to be less than 4.5 times the earnings.

Macquarie has predicted the ratio of debt to earnings could rise to 6.5 by June while JP Morgan said earnings would need to be $100 million for the 2009-10 financial year to avoid a breach.