All SGH questions - put here (financials ONLY), page-392

OK, there does seem to be a $ problem coming up although the significance of it is yet to be determined.

When Nowicki was purchased, the deferred consideration component was $20m, payable in 2 equal tranches of $10m each. The first of those tranches ($10m) needs to be paid "on or before 28 February 2016". Evidence of this funding requirement comes from the NOM for the 2014 AGM.

It can't be that the deferred payment will not be required to be paid because twice, SGH has referred to the extent to which Nowicki has contributed to date to AU profits. The first reference to this was from the H15 interim report and the second, from the F15 financial results + in the Annual Report under business combinations etc. The payment will therefore be required to be paid. This however is likely to be resisted by the Banks or by SGH itself if the available headroom (arguably the net available facility remaining after adjusting for cash in hand) has diminished any further beyond what was stated in the 17/12 disclosure.

May be they will be able to defer but with the Nowicki partners already seeing the extent of their share value consideration having fallen to the extent that it has (and with disposal restrictions still attaching to those shares) they will likely require that they be paid their first tranche of the deferred consideration.

This is the only one that seems to have a February expiry but there are likely to be others also rapidly coming up judging by the amount that is currently showing as due under Current Lisbilities.

From a vendor's perspective (hence also banking perspective) many of the AU acquired entities are still functioning under their own branding, web sites and seemingly separate identities (ie: similar to how insurers are increasing competing via the various online brands /sites that they have been establishing even if it involves some self cannibalisation in the process). But it still doesn't eliminate the fact that a $10m first lump sum payment is due in <4 weeks on account of the Niwicki acquisition.