Been having a read of VGH books; looks like anytime soon we will see there debt facility get extended another year.
They have been paying 2.5 million each quarter principle back on this debt, plus about the same again in interest.
Their EBITDA is still very healthy and justifies current level of debt, so no real likihood of defaulting anytime soon.
They had another 20-odd million in goodwill written off this year, this was put down to reduced earning forecasts in queensland clinics. The note on this specified that victoria clinics actually increased in goodwill (which they calculate based on earnings/forecast earnings)by 20-odd million, however reporting standards prevent them using this to offset the queensland losses.
Current debt facility terms restrict paying of divdends, and will do so for atleast the next 12 months.
In 12 months debt will have reduced to 90 million, if terms of debt facility loosen and allow dividends, a 1.5c dividend would only set them back 1 million, and on this basis alone would justify share price around the 25-30cent mark. Other valuation measures see much higher share prices north of 1 dollar.
They'll likely be re-named next month also; so as a company looking to attract investors they should shake off a lot of the bad sentiment thats seen this stock become grossly undervalued (in my opinion).
Anyone else read the books and have different opinions?
VGH Price at posting:
7.6¢ Sentiment: Buy Disclosure: Held
