Ann: FY16 Earnings Guidance-SGH.AX, page-70

After reading the Ann a bit more in detail, I think their performance is within my expectation. Although I don't like the 2h loss, but you need more info from the financials to see what caused it, most likely the restructure cost, and accounting adjustments and asset provision (which I have no idea what asset requires provisioning for, hence more details requires).

What I liked about the Ann is that the full year EBITAW after adjusting for one off expenses such as restructuring and and accounting adjustments equates to $36.6m. Here is why I think it's good:
1. First half EBITAW was a loss of 58.3m, to get to a full year positive 36.6m you need EBITAW of $94.9 in the second half. (The 2 H 8.9m EBITAW is after adjustment for one offs mentioned above).
2. Say next year normalizes, 94.9m in one half x2 will give you EBITAW of 199.8m in 2017. Divided by the number of shares, this equates to EBITAW of approx 52c per share. Normal sp is about 13-15 times EP, the current price is 1x EPS which still present a significant bargain given now they are a definite going concern.
3. Bonus! Above calc probably excludes NIHL, which was not mentioned in the guidance. Hence another big chuck of cash coming in under the radar. (NIHL is off balance sheet)
4. Bonus 2! GBP fx movement means less EBITAW when translated into AUD, even with bad fx rate, SGH still managed to pull in approx EBITAW of 200m from BAU, if fx reverses, there will be a 10% gain for them to just be sitting on their asses and doing nothing.
5. Thoughts on debt, they don't need to repay all debt, I don't think doom Sayers can find a good company free of debt. Banks would love to lend you money in such low interest rate environment, there is basically no place to get returns otherwise. With such low interest rate it's a win win for shareholders and banks. You get more Umph for you money as a shareholder, all SGH have to do is to bring down debt to a manageable level. I'm no expert but many others suggest a 200m reduction is sufficient to make the debt ratios look good.
6. Bonus 3. Although I'm not so sure at this point. UK tax law changed in July 2015, basically the impact is banning good will write downs from an business acquisition as a deductible item. But if you acquire the assets pre July 2015, you can still use the write down as a deduction (SGH acquired SGS as an asset acquisition from Quindell, is qualified for the deduction). So basically with the 800m ish write off, you are looking at a 160m saving in tax with UK 20% tax rate. Reason I'm not so sure about this one is because SGH appear to still be paying tax in the guidance note, so will need to see the details financials to confirm this.

Hopefully detailed financials will confirm my analysis above. GLTA.