go forward, page-2

Don't underestimate how crippled this company still is. What they have managed to achieve has given them an opportunity to exist and that is all.

Based on their calculation of current portion of the bank bill (approx $1.8m), it seems they are perhaps forecasting EBIT around $5m. Looking at last years revenue and results, this seems a fairly challenging figure, but not outside the bounds of reality. However, taking into account the substantial debt, at current price, AMA is trading on an EV/EBIT multiple of about 9.0. This is at the high end for a business of this type.

In addition, growing the business is going to be constrained by the need to divest cashflows to banks and vendors over the next 5 years.

Meanwhile, the business still remains in a position where the gain in value will benefit the banks more than the shareholders by providing them greater security against the remaining loan facilities. It is possible that an improvement in AMA asset backing will provide more rather than less incentive for the banks to press for administration. Though it would be hoped that the covenants have been set to avoid any such unpleasantness.