Where is Denbo?, page-46

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Tumberoll

Repair over  several years.  In  18 months I think you will  find that  SGH  has:

1. Scaled  back to reduce capital tied up in WIP
2. Processed 95%  of HL  cases and pointing at the profits and the reduced borrowing.
3. Has sidestepped cases with long process.

But   wont know  that  SGH UK has

begun  to nibble away  at other segments of the legal profession  and generating  profits thereby.

I guess  that the balance sheet  at July 17  will kook very different from the Dec 15 balance sheet. Odd if it isnt.
I also guess that  with  lower gearing and chunky profits and clear cash generation,  the market will warm to the profitability
and EPS  growth clearly on its way.

In short  I dont think it will take years.  If it looks profitable  and the finance is clearly affordable, why wouldn't it have what other profitable  well financed service companies have, namely a respectable PE?   Peer group Redde plc is over 21.

If the FD  is sensible the SGH  reporting will  treat HL  as  Extraordinary  and  show finance costs associated  as a separate cost. Debt associated with HL  WIP could be shown separately too.
That will help clarify  the financing and profitable nature of the rest of the ongoing group and  save the less bright the trouble of matching  some  debt to the temporary HL case WIP.

Mel  ( getting even warmer)