I think the concern is that GOCF doesn't consider the source of that cash and is unaudited. A large chunk of it was fed into the company from external funding of cases to bring cash forward. If WIP is not being recovered, then the company is still on the hook to pay those loans back.
However, I don't quite have the same concerns over WIP recoverability, the overall WIP unrecovered over SUM of the last 10 years is 13% which is roughly in line with the "low double digit growth" the company is experiencing. Additionally, WIP recoverability is apparently audited at least once a year (please correct me if I'm mistaken).
I do agree that WIP to Cash Conversion has been increasingly delayed due to re-orientation of the business toward Class Actions.
Very curious to see how things pan out and I suspect given the business model, these kinds of concerns will continue to dog them. Unless Shine can come out and provide some kind of evidence that puts to bed. ie. Some additional oversight of WIP.
SHJ Price at posting:
87.0¢ Sentiment: None Disclosure: Held
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