In prior periods the debt facility was drawn down in the second...

In prior periods the debt facility was drawn down in the second half to repay Christmas creditors whilst leaving cash relatively unchanged.
Cash can be drawn to fund the same creditor reduction and more in current half, whilst allowing sufficient combined cash and undrawn debt facilities at 30 June.

@natnicnak

Yes, the Company can draw from their credit facility in the second half to cover their trade payables; likewise, they can use their cash balance for the same purpose.

The problem I see is that, even if they use all their cash balance (note that my definition of Working Capital does include Cash under Current Assets) and all their available credit line, because of the reduction in credit availability from June 30th they will still likely face a shortfall in DH2018, in absence of some significant Free Cash Flow generation.

Further, there is a small positive, yet not to be ignored, benefit of shutting some 100 unprofitable stores between the two balance dates; your stock hungry working capital needs reduce and ... you don’t lose money in the second half anymore!

Yes, the Company can free up positive underlying EBITDA by shutting down unprofitable shops, but they will also incur upfront costs to do that. Take into account that the current FY2018 EBITDA guidance does not include those one-off costs; therefore, unless there is a substantial positive surprise to what has been guided, I struggle to see how they are going to be able to cover their working capital deficit just out of Free Cash Flow in 2018.

Focus for the short term is offers submitted to Luminus and Board review of them

Sure, there is a distinct possibility of an offer being made. My problem is that I can’t base an investment decision (even a high-risk speculative one like SFH was for me) solely on the expectation of a takeover, unless I see the Company’s situation as being fixable on a standalone basis.

And, given the new constraints the Company is operating within (working capital deficit and reduction in credit availability), I now see the odds of that turnaround happening (without substantial dilution) as being materially worse than they were in October when I first bought in. Which is why, while I still think this can be a multi-bagger, if things eventually pan out just fine, I’ve decided to step out and wait for some evidence of balance sheet stabilisation before I can contemplate re-investing.

Cheers