Hi Tumbleroll, my sentiment has not changed. If anything, the Content Manager reinforces increasing dysfunction going on; not a committed effort towards both understanding and actually cutting OPEX.
Much of the information in the ad seems to have been cut and pasted from various general statements appearing in previous website updates, ASX releases, SEEK ads, or in Annual Reports.
Checking the UK websites overnight including current UK jobs on offer, the referencing is to 5500 staff across 90 offices including 1500/18 in UK law.
At AR15, AU had 1400/67 and the UK had 3950/28, = 5350/95.
These numbers are still up 150 on Jun15 outcomes.
Looking however at local SEEK ads, the referencing has been to 1300/1300 split.
Clearly there is no real co-ordination of the information going on and no getting of the information being given out by either Investor Relations, Management or Secretariat. HR are clearly not checking on the accuracy of their information before publishing.
That said however, >75% of the currently advertised jobs in the UK and AU are for FTC positions (fixed term contracts, etc).
One of the oldest headcount reduction tricks in the world is to freeze /reduce permanent staff numbers whilst then either shifting staff to contract or replacing staff who have left with contract only positions. Overall employment numbers remain unchanged but headcount is effectively reduced in the process. Sleight of hand perhaps rather than genuine commitment to OPEX reductions.
Unfortunately, I am not yet seeing any evidence of either SGH cutting OPEX or headcount, or having in place the right checks and balances to ensure that a consistent message /facts are delivered.
Presently, SGH still have 2 weeks to formulate their plan to the banks. In my view, it is going to be tight. Westpac has already provisioned and locally, NAB has recently tightened its attitude towards lending to professional services' firms generally (not just to legal firms or lawyers). Towards SGH, NAB's exposure is primarily in the UK and towards SGS.
NAB's half year however closed off on 31 March do the timing will be very tight indeed. Absent genuine commitment and serious effort by SGH, I doubt that NAB will extend any further patience.
So, whilst I consider that SGH will meet the deadline, the question is whether they will also meet the real changes that both Westpac and NAB are after - serious OPEX and headcount reduction and serious management changes made, including non essential asset divestments (maybe) in return for an extension of the facility terms beyond 2018 and 2020.
Put simply, I doubt that Grech, Skippen or Fowlie are genuinely up to cutting loose /slimming down the businesses that they have built up.
So until I see that they are tackling these matters, my sentiment remains unchanged. SGH and its shareholders may have capitulated but neither executive management, senior management (ex Houghton) or the "old" board have capitulated. Until they do, SGH will remain in ICU on 24/7 watch. When they do, when they take the challenges before them seriously, when they take proper accountability, then my sentiment will change because then they will be serious about working 24/7 towards the survival (now) and success (future) of the firm. But for now the jury on this is still out.
SGH Price at posting:
27.5¢ Sentiment: Sell Disclosure: Not Held
