Increasing bad debts have been reported for some time, last 2 to 3 years, they usually include a graph showing the same and have for some time now. This is due to the Gogetta brand which is growing by relaxing the credit approval process for new customers (easy to do). There will be a fair bit of bad debt in their Go Getta book which they have hinted to. The preliminary audit obviously picked this up reading between the lines - and the "business update" was confession time. Essentially they are now going back to the strategy they were on a few years ago which was grow the silver chef business (thats what they do well) in Aus, NZ, Canada and other markets. Important to watch the pcp % increase in operating cash flow vs net profit. op c/flow growing at a slower rate than what the headline numbers report for income. While gogetta grows the topline - at what cost? and how can it be sustained? (they are already hinting that it cant). Dividend increases will slow as we saw in the mid year figures - only 6% up pcp. Good to see focus back on silver chef and less bravado with the gogetta brand long term that is where the business needs to be.
SIV Price at posting:
$9.76 Sentiment: Hold Disclosure: Held
