Well The positive case is there. 1. NIHL cash flow looked to me...

Well

The positive case is there.

1. NIHL cash flow looked to me at deal time as if it was 18 months - 2 years away.
2. There appears to be $900m T/O with potential $126 m EBIT ......in theory all the management have to do is get fixed and variable costs in line for that level of turnover
3. Of course if new SSAP means you cannot value most of WIP as an asset ...then there is a material actual asset which isn't being valued in the BSheet. ( Which is misleading see note 4 below)
4. In the USA there are corporate lawyers on zillions paygrade in clusters ( New York etc.) There has been recent legislation to ensure the "gazillions legal eagles" can no longer hide profits in WIP which is not valued in the balance sheet ( Thus saving big tax bill). In this light the near cash valuation imposed in the new SSAP ( Drafted by accountants who also like to save on tax) seems odd. It certainly distorts P/L in the period while moving from WIP valued and present in BS to unvalued. Of course after all the adjustments to comply with the new SSAP then Profits should reappear for subsequent periods.
5. The perfect storm we are in is to do with cash flow - and it will be really interesting to hera what the directors have to say.

Now I dont know ....and I concede SGH may be skooshed and they can not get cash flow moving in right direction ( I had been hoping for $30 -40 N +ve cash flow ) ......but neck in back of collar I do believe it likely that it isnt skooshed. I concede too that $200-300M new capital might be needed to right the ship, and that SGH may have overpaid for the new profit stream in SGS, but :

I do believe in 9 figure ongoing profitability and that good management can bring about $40-$60 M ongoing +ve cash flow. Now the directors must know the sitrep. It is about time they told us about the situation and what to expect in the future.

You never know.....eating our heads against a brick wall may be about to stop. The old adage about selling on the news may just not apply for SGH next week if the directors have any good news. Certainly I have hope.

DYOR

Mel ( looking out the blue paint )