I am a past holder and equally as skeptical and negative on this company as most others. I am taking a moment to look at the potential recovery opportunity and have several questions that need strong answers before buying back in.
The P&L has looked terrible for several years in most part due to the large impariement losses. The carrying value of key assets should now be at a relavtively low base and the actual written down value can not go below zero so the opportunity/requirment to smash the P&L with intabagle reductions is dinimishing.
The operating cash flow should increase signifcantly all things being equal with the new Suncorp arrangments. Do we have a forecast on just how big the impact is likely to be on the operating cash flow? If it can improve at the same rate as past 12 months, that is a significant increase and outweights the negative flows in financing and Investing.
How much will the financing cash flow improve over next 12 months with reduced debt and other minor adjustments?
In summary, if they get to neutral cash flow and do not need to include massive impariement loss then it becomes a viable business to sell to expereineced operators which might include an off shore buyer or might even be a local Private Equity teaming up with one of the imfamous gurus that are already taking market share.
They also nead some new board membes and senior manager immedietly and just maybe they will remain a going concern and have a chance to fix culture and improve operating methods and strategy.
AMA Price at posting:
5.6¢ Sentiment: Buy Disclosure: Not Held
