Ann: Full Year Results FY21, page-6

notes on a couple of things

In relation to building brilliance

Its quite objectionable imo that they associate the cost of this program as a significant item and then write it back to present a higher " underlying profit".

Its a multi year program

reality is costs are up across the board, so clearly it isn't yielding savings to date

Underlying profit should exclude this item imo - so many BS things in so many sets of accounts.




so 80628 less 22695 if you want to present a real underlying

so 57931 is truer reflection of underlying just on that transaction imo

108 to 58 ,(underlying adjusted for reality 2020 vs 2021)  drop of underlying then approx 46%, adjusted for building brilliance costs


Its a bit like all the one off significant items you see in accounts, then you see them the next year for the same thing


NOW in relation to the one off significant wrtiedown - non cash   349 296 000


DID you spot it?

sure but you will see how much CASH was actually spent this year acquiring the asset impaired and how much last year

THEY SAID THIS on the 20th AUG - 6 days AGO! said max 300M, but delivered a writedown of 350M

the Company expects to incur a non-cash impairment in the range of A$250 million to A$300 million in its financial results for the year ended 30 June 2021 due for release on 26 August 2021

not only did you see writedowns - today they were delivered 49,296   MILLLLLION over what was guided less than a week ago




Above you will see this financial year reported 62.176M of CASH WAS spent...but the writedown at end of year was after so its non cash.

So just rough excluding costs etc 842M cash spent on Atlantic acquisition and approx 349M written off

So roughly 41% of the capital spent to buy the project - written off

At the very least boys, deduct the cash spent in the reporting period from the overall significant item for a truer picture of your underlying

But of course they wouldn't do that at Underlying with building brilliance costs reclassified as significant items for writeback, (spend 22 M and watch costs increase- errrrr)

So for fun lets look at a more realistic underlying, the metric presented by most companies whi present bad results and think this metric will put the lipstick back on the pig

80 (underlying reported by them)

-22 (add back the building brilliance costs incurred in a multi year program to reduce costs)
-62 (add back of the cash component spent in the same reporting period the year end adjustment writeoof put through )

= a loss



ANyhoooo, more about BS reports and chopping them back to reality

these two items imo are worth a look imo

write back of building brilliance costs because its considered a significant item, when its multi year in the underlying profit calculation

Second related to monster writedown, but most importantly the MASSIVE difference over and above what was guided just six days ago...

guide 250-300M 6 days ago then deliver 350M - WTF

hence my thoughts SBM needs some new management and it remains a sell for me...

but each to their own - good luck guys