SHI continue to make losses and it doesn't even get a mention in the report highlights. For the 16M spend you would expect it to make a net profit of at least 400K each half, representing a 5% return on the capital deployed. Instead that investment is producing losses. Once you accumulate the losses that have been built up SHI since the acquisition and the lost interest that would have been earned by just sticking the money into low interest bonds, the SHI investment starts to look truly awful. It will need a big turnaround if it is ever going to look like a positive investment. Extolling the standing of the brands and who uses them, will not make it a good investment.
The shares have a book value of over $4.00, but because the return on deployed capital is so ordinary, the intrinsic value is significantly less.
They are not good capital allocators.
GOW Price at posting:
$2.56 Sentiment: Hold Disclosure: Not Held
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