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28/02/16
17:31
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Originally posted by Value_Hunter
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Westcoast
I don't think they are "listening" to their bankers .......the banks will be "telling" HIL what to do........this is evidenced by the march 2016 timeline .........
it is inconceivable that SG&A >22% .......a "reasonable company" is <12-15% ....a really good entity is like 6-8% ......
sadly - it is going to get quite a bit smaller ......quite quickly (imho).....
imho - the company has a couple of options:
1. identify land / buildings that the company owns, and do a sale - lease back type deals
2. indentify which parts of the business lack scale, and find a buyer (there are a few in the medi products / techo space).
3. work out if the company actually wishes to "make widgets" (aka hills hoist etc) and get back the IP / manufacturing (or control thereof) and "own the market".
4. get inventory under control ...... (eg the Masters deal means you are reliant upon a third party to manage inventory ........not ideal...)
5. remove the obvious excess layers in middle management .....and get the SG&A down to say 10-14% .......
6. renew the Board to show the market they are actually serious about shareholder wealth generation.....
if they don't do anything - it is going to get messy ....quite quickly (imho).
rgds
V_H
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Some well considered comments which likely involved consideration of more than some glib bullet points from management in their results presentation particularly when some of those actions points for 2H16 look to be more driven by the banks wanting their debt exposure to this business reduced rather than pro-active plans driven by management.