Definately cash flow risk here... but possible to overcome...

Definately cash flow risk here... but possible to overcome this:

Interest per half is now $5.2 mill (or 8.0c per share - 16c annualised).

First half NPAT was 20.9c per share and anticipated 2nd half NPAT is 4c - 9c per share (or $2.58 - $5.8 mill).

Thus annualised interest bill of 16c per share and forecast NPAT of 25c - 30c per share (after interest is paid) Thus EBI and after T of between 41c - 46c.

On an operating basis will be tight and not leave much room for error or much free cashflow to repay debt burden.

Key is to reduce the items that blew the cash flow in the 1st half. ie:

Recievables increased $16 mill
Inventories increased $10 mill

Need to reverse these operational items, in particular debtor management. If Mgmt can do this then the company will survive and slowly reduce debt burden. Share price will increase accordingly... big risk, big return.

One point is that USA is screw*d. At some point USD:AUD will reverse in a big way (when/ how remains to be seen).

Good luck all.