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54.5¢ slater & gordon limited

Lenders force SGH to restructure, page-105

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31/01/16

18:07

Post #: 16908223
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Originally posted by bergo33 ↑

Slaters cash flow was $40m last year and $50m the year before. Cash flow is restrained at the moment but will be set free when the NIHL cases resolve. If they don't resolve $100m to $200m will be paid in warranty to cover these negative cash flows they are experiencing at the moment. The money is held in eshrow by watchstone. The media like to quote the $700m debt figure when in fact it is $600- GUARANTEED $100m (if not $200m) so the real debt is $400m to $500m minus the cash flows for this year which will most likely be in excess of $100m as the business is now twice as large. That means debt could be under $400m by next year with cashflows of $100m per year. What kind of idiot banker would shut that business down?

The company is not going broke, there will be no capital raising. The business is being optimised, it was always a turn around story. If you have the means pick up some cheap legal firm shares due to the panic. You will be laughing in years to come at how cheaply you bought them.

Panic creates wonderful buying opportunities.

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My FCF calc is operating cash flow + Dep & Amort - Capital Exp (Plant & Equip , Software Dev.).....hence <$30m.

I think they will be very lucky to reach $100m OP Cash Flow and the FCF will be significantly less probably AUD$60m (max.)

SGH Price at posting: 60.0¢ Sentiment: Hold Disclosure: Not Held
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0 Great analysis

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Lenders force SGH to restructure, page-105

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