I agree that the amount of cash spent on such a hard cost to trace as "refurbishments" has me on edge.
How do you prove the refurbishments were actually done, at least to the value of $6m without going round each outlet and assessing the outlet before and after refurbishment (which of course no one from Aus has done)? What company was contracted to provide this refurbishment work? With the new office building, you see a new building, with a warehouse - a new warehouse. Refurbishments are much harder to track. To track that the money was truly spent on refurbishments to the value of $6m is near impossible.
Of course we would not question this if the business was local. If there had never been cases of fraud from foreign operated businesses we would not question it either. But in this case I think it is something to think about, as our visibility on operations is poor and we are relying on the thoroughness of an Aus Director and CFO to provide us with validation. There is a lot of responsibility on their shoulders and I hope they are not leaving any stones un-turned. I really hope the re-investments planned for announcement in the coming months are very VISIBLE. For example a new website that we can easily validate the value of. New franchised outlets that the Director can go and view.
I would not be so worried if they had gone on to pay a dividend. Because that would be TANGIBLE. It seems strange that a company that set out expectations to shareholders to pay a dividend and then with bundles of cash on hand refuses to do so - this does not give me much confidence. It comes across as they are trying to avoid it - particularly with the insignificant token dividend in early 2014.
So much to be suspicious about.
Certainly an opportunity to buy into potentially unfounded fears. Both risk and reward have massively increased.
