Ann: Appendix 4D & Interim Financial Report 31 December 2017, page-36

Wrt to offending, no problem. Heaven knows I've done more than my share of offending, rightly or wrongly, knowingly and otherwise. A little cry to mummy and I quickly get over it.


"Money can be made from all ki[n]ds of business..."

That's why I'm here. Though I suspect not all businesses. If a business can be expected to generate more capital than it consumes over time (even if it generates a poor return on its capital), then I wholeheartedly agree. However, I would need some convincing as to why a capital sink is worth more than zero (and no, I'm not making any reference here to SRS).

But the crucial word here is price.


"...you haven’t gone into much detail about the extent of asset value hidden the property portfolio..."

I'm here to get some answers, and rebuttals, from those that think their interests lie in the business being presented with its best foot forward. What better why to test my own opinions, assumptions and understanding? Don't you think that if you are going to part with your precious cash the the burden of proof should be on those that seek to emphasise all that hidden value?


Ultimately my opinion counts for little. The fortunes of SRS will, I suspect, be determined by whether or not a material improvement in margins in the domestic operations can be achieved, without recourse to all that surplus cash. This will, I suspect, be contingent on whether or not SRS can continue to re-direct its existing infrastructure/capacity outside of the sectors in decline, and that it can do so at sufficient pace to overcome the rate of decline. But to think this will be easy, given the industry as a whole will be attempting the same, is I believe naive.

I fully believe that shareholders have a powerful ally in the form of a board with properly aligned incentives, and an understanding of how to allocate capital, and I suspect a high degree of integrity too. This will give a high likelihood of SRS not doing really stupid things, and will vastly minimise agency risk. Which is a huge plus. It will not however change what they have to work with or the industry that they find themselves in.

As such, for me, it comes down to how much of a safety margin one seeks. There are, I suspect, many speed bumps on this path. The next bump may well make it seem that all is going to hell in a basket. At that point, the margin may look appealing to me.