Ann: 2016 Full Year Results Presentation-DCG.AX, page-10

Really not sure why the SP is only down 5% - their operating cashflow was -23m for just 2H. They only have $6m net cash at 30 June and they're paying a dividend which will burn over $3m more. I would be highly surprised if they aren't already in a net debt situation.

When DCG had a pile of cash, you could argue it was "somewhat safe" it now needs to use debt for working capital. This is when things can get very dicey, very quickly.

From last years presentation - an interesting read. Compare what they said with what happened

• Weak H1 FY16 expected due to a number of large historical resource projects reaching completion in September 2015 – better H2 FY16 expected based on the award timing of Government opportunities in current tender pipeline

• FY16 revenue expected in the $450m to $550m range

• The rate of margin compression for construction projects has slowed, but competition and a lack of major new projects may create further pressure

• Group retains substantial balance sheet strength – no core senior debt, $59.5m in cash and quality real assets


For full disclosure I am short