Ann: Letter to Eligible Shareholders - Entitlement Issue, page-5

That would be nice – back to the mid-2000s when SRH was making that sort of money.
However, EBIT is ‘earnings before interest and tax’. So for the last two quarters SRH has more than covered all its costs, apart from interest payments on its debt.
They’ve got about $5 million in debt, and last financial year they paid an average of $135 000 a quarter in interest on that debt.
On the plus side, they had about $1.3 million in cash at the end of last financial year. And a sizeable excess of receivables over payables. So, if they can keep generating positive EBIT, there shouldn’t be much upward pressure on debt levels (all other things being equal).
The rights issue will hopefully wipe out about a quarter of the debt, and the interest bill should come down by a similar proportion (assuming interest rates don’t go up).
That will make it easier for the company to generate profits (after interest and tax).
All up, the company looks to be getting back into a reasonably secure financial position. If it can maintain upward momentum on its profitability, and use some of the profits to reduce debt even further, hopefully it’ll be just a matter of time before dividends can resume. It all hinges on business conditions and how well the company performs (as is the case with any company). But the rights issue should help – I think it is a prudent move — and hopefully those who participate in it will be well rewarded over the next few years.