I agree that the positive operating cash flow of around $24m in...

I agree that the positive operating cash flow of around $24m in the second half is encouraging. The big write-downs of forestry assets to about a third of their BV, or to a quarter of BV if other associated write-downs are also included, was a disappointment, but it seems the Board has taken a big hit now in order to avoid having to take further abnormal losses on them during FY12. Let's hope they can crawl back some of the value they have written down this year when actual sales are made.

The NAB goes down to just over $1.00/sh (after adjusting for the hybrids). The NTA has fallen substantially, to around 20c/share, but given the nature of the business (compared to other retailing conglomerates which sell for multiples of NAB) this should not be a problem.

Overall, a reasonable result given low expectations.

As we can see, forestry asset sales are necessary as there would be pressure from debt covenants without these sales. The forestry assets are clearly not producing adequate return to pay their way in the short-to-medium term.

I think we are now seeing the bottom in sp, as FY12 is projected to produce much better results. Any improvement from this point on will go to the bottom line, and to justify current sp the company just needs to earn less than $15m NPAT (ie an increase of only $10m from FY11 underlying NPAT). The cash flow is already positive.