interim results p/e 31/12/08.

Here's my anaylsis of the key results which were released after close of mkt 23/2/09:

Rather than do a cap raising to help pay down debt like many other co's in recent days have done NHR have decided to reduce their stake in their major key asset the Coates group from 47.15% to 46.0% and transfer this 1.15% stake in Coates group to the management at a cost of just over $4.5m.

For whatever reasons?,interestingly, this wasn't ever put to the stakeholders to vote on nor did other options in cap raising to alleviate the pressures on the 'off' balance sheet as a result of their stake in the Coates group be raised or put to other interested parties.

I don't really understand why they couldn't have just worked out an arrangement like most co's, where they could raise funds to help the pay down debt associated with their stake in the Coates group and then issue new shares.

A net redution in their Coates group stake would have been the same, but be on more fairer terms and allow participation in any equity raising accessable by the whole market rather than just keep it in house.

I note, the Cash a/c has reduced by a similiar amount to that supposedly received in recognition of the transfer of reduced stake in the Coates group to mgmt(surprise ! surprise!)and one wonders just who did pay for the transfer of 1.15% stake in NHR key asset(its controlling interest in the Coates group) stakeholders or mgmt?.

As if the results weren't bad enough, mgmt have decided in their wisdom to preserve capital and not pay a divi in light of the current economic financial enviroment and taking into account the now reduced earnings capacity within NHR where most of all NPAT dollars(excluding their 46.0% stake in the Coates group) are from the ALLIGHT business .

However,i note that they they have ample franking credits on the balance sheet and there was capacity to pay a 0.50cent to 1.00cent interim divi or a 'special' divi for the last half(p/e 31/12/08) backed by the secure income now flowing from (their now reduced stake) in the Coates group approximately $12m a half and NPAT earnings from their main business ALLIGHT which increased to $3m NPAT for the last half.