Plenty of talk in the market about underlying health of...

Plenty of talk in the market about underlying health of ABC
Learning's (ABS.AU) business. In particular doubts have been raised over how its
intangible assets - the childcare licenses - are valued. "My understanding is that
this balance sheet item values approximately 2,323 childcare licences at A$1.5 million
per centre and yet the company sold 49 centres during the half year at an approximate
price of A$1.0 million per centre," says Craig Connelly, Managing Director, AR
Capital Management in Melbourne. "That's a chunky discrepancy. If the company
wrote their licence value down by just 10% (ie. down A$300 million), they'd breach
their shareholder funds covenant."