intrinsic value of vpg, page-2

The reports are showing what we all probably did know. That VALAD had to clear the desk significantly over the past year or so of accumulated junk.

The one important point I always consider is the cash flow statement. The other statements mean nothing if there is insufficient CF from ongoing operations. The other statements are all important, but the CF statement shows where MONEY is coming from. If they have to borrow or sell assets to show positive CF then we know there is an issue.

According to the CF statement released VALAD eans significant revenue from ongoing operations. More than enough to maintain operations and to cover existing debt...

Sure you can 'fluff' over the write-offs and look to the bad year just gone, but if the operations are not being earnt to pay the bills, you can revalue the assets up by a trillion dollars and it won't make a difference, a company goes broke with insufficient revenue.

VALAD is now prime for a take over IMO. If there could be a take-over the winner would receive a business that is CF positive with A$200m+ in CASH and net revenue of A$136m+

If I had a spare A$50mio I would certainly take them over now....

Alternatively, they also have cash to consider new acquisitions, possibly a take over themselves (Although unlikely at the moment, given their previous record).

Maybe an MBO since there is cash in the till to pay down the debt after they win at say 15 to 20 cents. If successful they could repay half the debt from exsiting cash and have a business that is quite profitable.

If the credit markets were sorted, I think a private equity takeover would have been a certainty, then again, VPG wouldn't probably be in this situation...

Maybe we'll hear of something in the near future now they have finally aired their dirty laundry....Scarborough can now have their go and do a Paker trick (Sell for top $$ and buy back at a fraction)...