Have you noticed how the directors keep topping up the shares?...

Have you noticed how the directors keep topping up the shares? Richard Poole now owns 15% of the company and there is another shareholder who has been there for years with even more.

Richard has been buying stock heavily lately at prices below 4 cents. My read of it is that they are gearing up for a privatisation.

For those who have been following the receivables drama you would know they have written the value down to $1m so they have written off $4m. According to the company, Andrew Kelly is off in the US with some new start-up business and basically doesnt have any money. Barring a miracle, they are never going to get that cash which they could have used to pay down their large debt facility.

Thankfully GE are willing to extend working capital to these guys but if they are going to crank up sales they are going to need an even bigger facility. The key for SRA will be to not get crunched by GE pulling back on the facility.

Most likely, the Directors will try and privatise this thing at about 4.2 cents and long term holders wont see the upside from the turnaround. They've moved premises and saving on head office costs as well as franchising stores to save a few bucks. Franchising seems to be going a little slowly given they have 90+ stores and only 20 odd franchised.

If anyone has any thoughts on any of my ramblings, glad to hear them.