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"however - as i said - that forecast was caveatted when made as...

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drbgt40

107 Posts.

72

05/02/19

15:03

Post #: 37336824
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Originally posted by goldbear77: ↑

the company projected cy19 cashflow b/e prior to any acquisition. why suggest it could be dependent on any new acquisition?

i havent read anyone suggest that to be the case.

it would be illogical and indefensible - company would be up for failing to meet continuous disclosure listing requirements (ie something material would have had to change in existing business projections)

however - as i said - that forecast was caveatted when made as a 'best efforts' guide from the company based on discussions with distributors. ie it effectively holds no weight.

like with Digicel, direct installs, $69.4M 3 yr income etc etc - when BUD fails to meet guidance there is no penalty except to the sp

what i said was it wouldnt surprise me if part of the attraction of an acquisition was cashflow boosting - depending on how close company gets to its cashflow b/e guidance - having added another business could either make the difference in achieving the target or alternatively hold out hope oit will do so 'not too far down track'. it muddies the waters - offers the dangerous branch of 'hope' and buys time

if you miss a major mark like that forecast and having nothing else in the hopper but business as usual - sp bites it in the a.

if for eg you miss organically but get over the line with inclusion of the bolt on - the market will probably look past the miss if they think reliably positive cashflow is on hand from there on - regardless of what was said prior.

but no ceo is ever going to tell you thats part of what they are thinking.

i grant you these are purely private conjectures around what i think would be part of whats driving the thought process. and those who remain glass half full are endemically condemned not to be able to consider these kinds of things

and remember thats just 1 of several possible considerations/motives for making an acquisition - all of which may apply to varying degree

it requires critical thinking to understand these nuances

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"however - as i said - that forecast was caveatted when made as a 'best efforts' guide from the company based on discussions with distributors. ie it effectively holds no weight."

I couldn't agree more, yet we have spent the last week analysing this to death, forecasting doom and destruction if we miss by a smidgeon, and put management on the rack.

BUD Price at posting: 9.5¢ Sentiment: Buy Disclosure: Held
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"however - as i said - that forecast was caveatted when made as...

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