My gut feel is guidance reduced to 160m ,cashflow either just neg up to 40m or slightly positive for fh16, depending on AU/UK existing business performance ytd , hearing loss starting to bring in cashflows with positive outlook that will be revenue positive moving forward, sgs performing close to as expected after some bedding down problems, other uk businesses performing ok as well as Aus. Banks happy that cashflows turning around but has asked sgh to focus on ways to reduce labour force and restructure to unlock value through better productivity. WIP will be written down a little bit to be conservative looking forward and some focus on the what ifs in relation to any potential legislative changes in UK. No need for CR with banks possibly reassessing loans if my guidance figure is much lower.SP to rise slowly at first to maybe 90 cents to 1.10 range but with further steady increase over next 18 months as increased cashflows realised and hopefully in the $3-$5 range by end of 2017.
This is purly gut feel stuff based on my research and what limited information about recently. I strongly feel that AG and co spent some time and expense doing their due diligence on sgs and i am confident they haven't got it completely wrong.
SGH Price at posting:
78.5¢ Sentiment: Buy Disclosure: Held
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