ABS a.b.c. learning centres limited

cash position

  1. 5 Posts.
    Is it really the US result that dragged the company ?? Aust result doesnt look so great either.

    Total cash & cash equivalent $134m, first half burn $74m after net proceeds of debt and equity issue of $468m.

    Stated Capex and acquisitions in pipeline of $380m less asset sales of $250m = $130m cash needed here.

    they cannot raise new equity, cant get more debt have negative operating cashflow and significant capex requirements.

    That doesnt sound like a business I would want to own!

    Childcare should be a simple business but they loaded up on "cheap & easy" debt and took on the world. Loaded up goodwill and intangibles and now its all coming home to roost. All the property is in a property trust ASX:AEU so more gearing here too - btw it seems to have held up pretty well today considering its main tenant is in difficulty.

    Someone will do well out of this business but its probably not the current owners!

    I have been short a month from $4.40 and got out yesterday real nicely but cant see a lot of upside with this sort of cash position and presumably now pressure on directors from margin calls and worrying about takeover defence and keeping debt banks at bay.

    TPI reports Wednesday, has a lot of similarities so will be interesting to see if its next.
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