MEDIA REPORTS, page-1404

Justdoit,

Ebit is money left after revenue and costs. They could use most if prudent. There is more than 200m in provisions also, I do not know the classes.

Some may relate to afl were reductions are, some maybe relating to the sold property. If so, some may move from debts to pl.

Either way they are around 400m debt with 240m ebit per annum. on the proviso things are stable.

There is even the possability of increased ebit with costs cut.

They have 1.4b revenue. I'm sure there are savings of atleast 20 to 30m per annum if one hacked all unnecessary costs. Ie parried back fringe benefits is one area outside core. We replaced real flowers delivered daily with plastic ones and an air freshener change, across 50 sites, 500k saved pa. Just a silly example. But if you look you can save.

If I was them I'd divest the papers, print media is finished, it's 9% return, use that to pay down debt. I don't know what it's worth is, but say 75m, if so we are close to 300m debt and that's without using ebit spun off.

I mean 240m ebit pa with sub 400m debt is not a problem, profit is very healthy. Many business don't have that ratio.

The banks will rollover there debts next year if ebit holds and debts are down more. Its not in the banks interest not to as they get 50m pa in interest and the coverage is 5x with 240m ebit.

Keep the studios, selling them to me is crazy as it's core and produces there content. A prime merger would utalize the studios, so it could be expanded.

I've never liked the idea of outsourcing core functions to save money, because if a business is run properly it should match the outsources costs.

Without the studios swm is just a delivery service, not a media company per say.

Merge with prime, synergies of 30m on costs, plus 2b revenue, buyout a producer of content to enlarge the studios.

Looking at swm, I don't see any urgency or firesales.

The annual is due next month, we will know there condition then. The issue is they removed guidance.

That created uncertainty. So I expect irratic trade until investors know we're they stand.