potential write down on goodwill comming

Having a quick look through the last few years balance sheet good will on the balance sheet has increased from $10m odd in 2007 to $240 million in 2010. This has been through acquisitions.

The consequence of this (in addition to a dilutive capital raising) has seen ROE decline from 16% to 7%. A totally unacceptable situation (ROE is nearly the same as a interest on a term deposit).

Unless PRG can rapidly restore margins, i foresee a 'restructuring' comming, especially if there is a new CEO. A large hit to the future P&L will occur to write down goodwill and for 'other' restructuring charges.