re: Ann: Market Update - Revised Syndicated F... Bossdog,Their...

re: Ann: Market Update - Revised Syndicated F... Bossdog,
Their current interest cost where just under 8mil for the half at their last financial report. Currently their margins are unacceptable but alot relates to work taken under previous management and they have committed to a restucture which should shave off alot of costs.

Basically been a "bolt on business" for 5 years in that easy time they buy a new company they just bolt it on to the group now their spending the money to intergrade businesses and this is where the cost savings will come from.

The reason for so much current debt is the debt covernance was breached at their last half due to the write downs. This was waviered today and they don't have another test for this debt till next year.So while it shows as current assuming they stay within their new covernance they will ok.

Jackgreen: I happen to know the Austral Business VERY well. Austral is doing well I know 12 - 18 months ago they where struggling. Margins where thin. When coles when into to JV with city FM and started doing Refrigeration FRR where pushed into doing more installation work and with so many players they where all tackling each other for the work.

FRR took on to many projects at low cost and therefor everyone else had to, to compete. Their where 3 main Australia wide companies doing most of the Coles / Woolies work Austral, FRR and Macalpine/Hussman about 18 months ago. FRR went into VA and no longer do any and hussman stopped chasing Installation work. This ment that Austral where left the only player with the scale to take on alot of projects.

This has been successful for them and they are currently enjoying healthy margins. So it might not be such a bad time to bail out of Austral as time are good there. I believe. If some of the smaller players get bigger or another big player enter the market margins may become slim again.

The value well i heard on the grape vine Hastie believed they could raise 70 mil by selling Austral, gordon bros and heyday. That wasn't from a reliable source though. Anything about 30Mil you would have to think would be a good price.