"how did you arive at BBI having a negative NTA ? Did you have a list of their properties and the the current market asset values which is the most appropriate way to assess NTA , not by using book value. Goodwill normally repesents the difference in value of the assets ongoing business or cashflows, and the price that they actually paid for the assets.I usually run a mile when I see the use of goodwill. Are you saying that their assets need to be devalued and if that were done they would have a negative balance sheet?
Hi Occam,
BBI have inherited goodwill on to their balance sheet from the acquisitions they have made and they will have to wtitre them down progressively in the coming years. If you look at thei Balance Sheet - released as part of their Annual Results you will note the following:
Current Assets $961.6m Non-Current Assets $13,226m that includes $1,369m of goodwill (refer Note 16)and $2,085m of "other intangible assest" (refer note 17) Current Liabilities $1,408m Non-current Liabilities $9,859m
Net assets are $2,919m
But if you deduct goodwill and "other intangible assets" you have a deficit of $535m.
Hope this helps clarify. If you want to read the full detail, just get their Annual Results presentation from 29th August. It is all their (97 pages long)
Regards
Coop
BBI Price at posting:
31.5¢ Sentiment: None Disclosure: Held
