Ann: 2020 Annual Report, page-18

Sure. I was being intentionally nice/charitable to Slater in my post (it was for the Slater board) but I think what I said is fair.

On the subject of debt and financial arrangements it's worth noting what the debt was for. Slater's debt was taken on to prevent the ship from sinking and bail the company out after the fallout of a disastrous acquisition in the UK (the result of management hubris). Shine's debt has been taken out to expand the company. Now all of this is in the rear view mirror but the debt and finance costs remain.

Looking forward however Slater will get the same terms on any new debt taken out? It depends. Remember it received those favourable terms in exchange for screwing over the shareholders. Slaters current management are cut-throat corporate raiders who bought into SGH to carve it up and maximise (their own) profit. If the further debt is needed to bail the company out again then the non-controlling shareholders will be thrown under the buss again. That said it does appear that this is currently an unlikely scenario. Shine's management aren't perfect but by comparison they're exponentially more trustworthy.

If Slater wanted debt to expand it's business (eventually this will happen) then any further debt it takes on will be at similar costs to Shine - but that's a long way off. In practical terms Shine can expand by acquisition and Slater can't. If Shine's management is smart enough to pick it's targets (and learn the lesson of what happened to SGH) then this is a huge advantage to Shine.

The key is that management needs to ensure that acquisitions add to Shareholder value. Expanding can harm as well as it can help and can often be more beneficial to the acquired company than it is to the purchaser. Everything depends on the price paid.

It's not the goal to have the biggest company - the goal is to have the most profitable company relative to shareholder equity.