Doomed Business - Nah - it would take an extended period of losses before viability became an issue for this group. Last 6 months report has 13 times interest coverage. 60% Capital Adequacy. Net current assets are $47m. When / If the company turnover declines, the NCA will decrease producing cash for the company to reduce / clear debt. This is one of the positives for the management - in the boom, while a lot of their peers geared up buying substandard assets, ZGL was very conservative and only used free surplus cashflow for the new investments. Now in the CAPEX bust, a lot of the peers are in major trouble, with way too much debt and ZGL is sitting pretty - on a balance sheet basis anyway. In relation to the P & L - worst case i would think would be a loss of circa $3m -$5m after deprecation of say $6m. Sustainable in the medium term until your CAPEX starts being an issue.
ZGL Price at posting:
15.0¢ Sentiment: None Disclosure: Held
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