Some interesting figures for punters to think about:
1. Operating cashflow is $15m. Total liability is $282m. Finance cost is $6.8m per annum.
2. WIP has ballooned out to $246m.
3. Free cashflow has only been positive twice in the last 5 years, which is $4m in 2007 and $10m in 2010.
4. Since 2007, revenue has consistently lagged WIP added, with trend accelerating over last 3 years.
To tie it all together, the revenue figure is not the total of the law firm's invoices issued. It is also not the total of the law firm's invoices paid. The revenue is merely the director's "guesswork" of how much work has been done on a file that the firm is legally entitled to charge for. So for example is 50% of the work is done on a $2000 file, then $1000 will be added to WIP.
Now, as everyone can see, the revenue recognition is total nonsense for class action speculative work where S & G is the litigation funder.
Obviously, judging by the price action, Mr Market thinks I am sprouting nonsense.
SGH Price at posting:
$1.93 Sentiment: LT Buy Disclosure: Not Held
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