Great analysis and really appreciated, truly. Will use historics...

Great analysis and really appreciated, truly. Will use historics as well for further review.

For the technitians re 137; items like deferred lease incentive, stepped lease liabilities are non cash and leave (LSL owing to employees with greater than 7 years service for example classified as current) along with other related entitlements, whilst current under 101 given not legally entitled to defer under 69(d) , the timing of actual cash outlays is another thing. You’d need to back these out to get a more accurate view of short term liquidity needs. (PS I suspect people pay a lot of money for this insight, hopefully you’ve enjoyed the free tuition!)

On the topic of a balance sheet that is funded by a net current deficiency in perpetuity; a study you’ll find fascinating is Buffet’s investee Moody’s corporation, which for several years has run with a deficiency in “total” net assets for years (technically potentially bust under your scenario right? (albeit total rather than current measure)) due to the fantastic sales to cash conversion of the business ie technically shareholders are rewarded by reversing equity contributions into their bank accounts in funding the business!

The key here which is difficult for you to know and which makes all the difference with the FY19 year, which is where the above analysis ends, is the impact on profitability and inventory holdings of the store closures.

GP mentioned that some 150 stores were losing money mid last year and the Chair has said the majority of loss making stores would be dealt with in the near term, which I suspect is the 2018 year. As mentioned 56 were shut in the first half and probably same if not more in the second.

The consequence of bearing pain of closures etc upfront is structural improvement in profitability, naturally.

If we were to assume sales reduce to some $600m annualised, even at a lower than average industry rate of ebitda/sales in the mid single digits (better performers earn closer to 10%) in clothing, say at 5%, you get a business that should be earning $30/40m EBITDA run rate annualized without any outperformance.

Further, if stock falls another $10m, the deficiency is dealt with using these numbers nearly in its entirety (potentially results in nil need for the facility) such is the sensitivity to closing net debt balances.

The bevy of suitors, which is now understood to include Allegro and Odyssey in the chase, know this of course. That is before contemplation of synergies in a tie up with the likes of a Noni B. They see a restructured vehicle spitting out cash at an amount near its current market cap, less net cash (net of debt), on hand.

A Buffet rule here; value a listed business as if it were a private business you’d acquire in its entirety; at some 1.5 times EBITDA (excluding net cash), is a steal. These things when they are running well sell for more than 8 times ebitda in a control transaction, Bras’n Things a timely reminder!

There is a conga line of suitors for a reason.

They haven’t turned up as novices unawares of the state of play here and blind to the concept of value, correct?