Ann: AGM Chairman's Address and Managing Director's Presentation, page-30

I happened to notice that interestingly Slater and Gordon currently has a higher market cap than Shine (SGH = $186M vs SHJ = $135M). There are high negative emotions around Slaters (esp from burned investors) which I would have expected to suppress it's price which makes the above differential very strange.

Based on that I thought it might be interesting to do a comparison of the businesses based on FY2018 reports and to view in this as objective and fair a manner as possible (though level of detail is somewhat 'back of a napkin'). i.e. Is there anything about the post restructure Slater that would make the company more valuable than Shine?

Obviously the new Slater is still stabilizing and the analysis below avoids Slater's one off costs and excludes their discontinued business. 

The per share price numbers are perhaps the best comparison here... i.e. these show how much each dollar invested will buy you for each company. (i.e. $1 will buy $1.94 in WIP assets if invested in SHJ and $2.23 if invested in SGH).

Here's some observations:

*Slater has three times the debt however interestingly their 2018 cash financing costs were one third LOWER than Shine's due to special rates Slater has been given. Slater must still pay back the money but the cheap interest rates it's paying on debt are an advantage it has.

*This actually highlights that when viewing op cash-flow Slater's business is much weaker comparatively to Shine in spite of Shine's higher finance cost (i.e Shine is handicapped by comparison) but still comes out well on top.

*It's not appaerent from above numbers but Slater's debt is ballooning - and while Shine's debt is also increasing its at a much more sane rate and the borrowings are being used to expand the business whereas  Slater's debt is being used to stem the bleeding.

So why does the market think Slater and Gordon is worth more than Shine??

Conclusion: The market is crazy and anyone who believes in efficient market theory should be fired into the sun