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54.5¢ slater & gordon limited

My apologies Mighty, I did mean to infer it was you who shut...

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Mick111

31 Posts.

26/11/15

21:53

Post #: 16488881
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Originally posted by Mightyatom ↑

Mick, I ignored at first but then felt compelled. I didn't shut anyone down who had a reasonable argument, and even then if they had no argument other than it is going to $2 I just gave a different opinion based on normal metrics.

The one person who has consistently posted an opposite view is Grant62 - I respect Grant and actually said I believe him to be one of the best posters on HC. We don't always agree but it is always respectful. I like that kind of debate.

Where I have perhaps got a little on the sarcastic side is where posts clearly demonstrate little knowledge of the business or its industry but make grand statements based on its SP. They will say they are right - and as a matter of fact they are - but that has little to do with judgement, the SP could have gone anywhere and that is clear to see in how silent the naysayers were in the brief run up to AGM. Then the SP suggested all was well in the camp so it was well. Now the SP says all is doomed so it is doomed. Yet the business carries on doing what it does, nothing has changed from prior to AGM through to today. Yes cash flow shock but it is full year that counts and assuming management speak the truth they will know what matters are to complete and they confidently restate guidance.

In fact now I think about, if there was any attempt to shut down it probably came from the other direction. I faced far more ridicule posts aimed presumably designed to shut me up.

No drama though I am big enough and ugly enough to handle it.

The company is clearly under pressure now. My quick back of the packet [not my firm view] looks like a reduction in the UK market of RTA PI injury costs from 2.5bn to 1.5bn - S&G roughly have a 12% share of the market so approx impact A$240m to revenue - but then there will undoubtedly be a large number of PI lawyers drop out so Slater might pick up some residual work. To hard to know with any sense of accuracy and Slater said that.

Whatever happens it is not an impact this FY but in the future years. However, with markets forward looking that is what will impact the SP now.

Risk
1. Reassess intangibles for a lower expected return for RTA business could impair ( though the annual report suggests plenty of headroom for lower performance based on what is booked)
2. If impair it increases pressure on need to reduce debt to keep equity/debt in <40% requirement
3. The business strategy is focused on fast track quick turnaround that part of the business will need a fresh outlook FY17

Optimism
1. History of facing up to similar regulatory challenge
2. It will impact the whole industry, possible Slater have the scale to absorb better than others - diverse business able to change its strategy to demand
3. Slater are working on good relations with government and insurers - no matter what changes a cooperative environment with stakeholders is vital - they all need each other

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My apologies Mighty, I did mean to infer it was you who shut others down - indeed you are much more considered than that. I was referring to other, shall I say, less informed.
Good to hear from you and have read and enjoyed your articulate and informed post.

SGH Price at posting: 94.0¢ Sentiment: Hold Disclosure: Held
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