Sorry to correct you, but I actually did not say it is worth zero. What I did say is that if you assume it is worth AUD 30 MM the company would have to put the cash they receive from a sale of homeground into working capital and therefore in that case you cannot think of it as an additional asset on top of the construction business.
Why do I think that? The roads they built for the government require DCG to maintain a qualification. One of the conditions of the qualification is that current assets > current liabilities. If they violate that condition they loose the qualification and will be ineligible to bid for new projects. Currently the way DCG satisfies the ratio is by using an accounting rule that says you can put long term assets into current assets if you want to sell in the near future. In other words without homeground the business would be undercapitalized and therefore a portion of the proceeds from a sale will need to stay in the business and can't be regarded as available for distribution to shareholders.
DCG Price at posting:
46.0¢ Sentiment: Sell Disclosure: Not Held
