You are right cash flow of King. It is certainly positive now with all the distractions of last half, advertising cuts and the carrying forwards of cases not completed. The research reports all state that the RTA of SGS were second half loaded and the SG UK business was loaded for the second half because of Medco. Also the EBIT figures have to be taken with the knowledge there was an accounting change from AASB 18 to 15 meaning WIP and earnings are lower. Comparing this half and last half will be a better measure of how things are tracking. ?$100m debt reduction ... Why not wait till December 2016, you get the escrow money or the NIHL files deliver. Dilution equals exodus of senior staff shareholders and would be disasterous for the business. I for one would vote for it and I doubt Grech/Fowlie/Evans would either. The banks have to remember that shareholders only have $100m to lose but they have about A$680m to lose at the current exchange rate.
SGH Price at posting:
27.0¢ Sentiment: Buy Disclosure: Held
