don't give up your day job, page-2

Romatique, if it's comedy you're after you don't have long to wait. The results announcement is tomorrow.

On a more serious note, here are some points to expect in tomorrow's announcement (all IMO, guesswork, and with no inside information). As I know I am not the most popular poster on this site, here is a promise: if I am wrong on more than 50% of these, then I will call it quits, for good.

Board - expect one or more changes to the Board, if not immediately then within 4/6 weeks, once the institutions have had a chance to digest the results. This could be the appointment of a new NED, one of the existing ones deciding they have had enough, one of the Execs being asked to bow out, or the appointment of a new Exec (eg the former manager who has been helping out in Europe, possibly as a replacement for somebody else).

UK - expect it not to live up to the commitment given by the person who has been running it for a number of years to return to profit in H2 of FY13. Whether anybody will do the honourable thing and fall on his sword is another matter

PIGS analyst - expect him to be embarrassed by his hopelessly optimistic forecasts for H2. The major differences will be revenues (where his H2 predictions will prove far too high for each of the business, especially EU) and profit (where EU H2 will be 2x to 3x the loss he has predicted).

Hybrid - expect either no news on this (in defiance of the promise to form a committee and work with hybrid holders to find a solution) or a buy-out offer at a value which most hybrid holders will consider derisory.

Diversification - Expect this to go no more than 10% of the way towards filling the hole left by declining revenues in the core paper business.

Disposals - in spite of promises to sell, fix or exit the loss-making EU businesses (especially Germany, Netherlands and UK), expect no announcement of any disposal of these businesses. Instead, expect a replay of the claim that they can be fixed and are worth more retained than sold.

Bottom line - expect the total loss (after interest, tax, write-offs, impairments, etc) to be around $100m to $120M, or worse if there are more big write-offs (this is a calculated guess). This is what has allowed there to be no announcement, because it is better than (and therefore not more than 15% worse than) last year's $270m. But at the level that really matters (trading / operations) expect it to be more than double last year's $19.2m loss. I would guess somewhere in the region of $40 to $50m loss, which is about $10m to $15m profit each for Canada and Oz, then about $15-20m cost in centre and about $50m loss in Europe.

ASIC - probably cannot be expected to show an interest in why no announcement was made about the likelihood of a significantly worse loss than last year, for the reason mentioned above.

Fall guy - pre-ordained destiny of being the fall guy when it all goes wrong may be fulfilled and may be sacrificed for the sake of appearing to take action.

PIGS - will be furious and the next webinar will be a riot. Expect increased action to be attempted to make changes to the Board, the RE, or to get some movement on the hybrid. To no avail, because in the final analysis PXUPA has no wepaons at its disposal because the nature of the instrument leaves them virtually powerless.

Press - expect them to be scathing in thei reporting of the results, end of the honeymoon, concerns about cash and survival, etc, which can only serve to make matters worse in terms of confidence of trading partners and morale of management and staff.

I think that is enough predictions for now. As stated above, if I am wrong in more than 50% of these, I promise to call it a day.