INSIDER
Strathfield Group, which never seems to have recovered from the dotcom detonation a decade ago, has decided to do the right thing by its shareholders and delist the company.
Insider is not quite sure how that helps them. If the stock exchange approves the move, investors will lose a market for their stock that they only regained a year ago when Strathfield relisted.
The car radio and mobile phone flogger is hoping to eliminate the background noise of having its shares trading infrequently at 0.1¢ while it negotiates some sort of deal.
Only it has no deal on the table.
The application to delist Strathfield was buried towards the end of another of the ''further company update'' announcements - at the end of a paragraph beginning ''On a positive note''.
Even worse news for Strathfield seems to be that it has exited the only part of its business that was making a profit - equipment leasing - because its financiers reckoned they could no longer support it.
The business made $5.59 million last year when Strathfield emerged from administration and returned to trading under direction of the chairman, Vaz Hovanessian and his team.
The group said yesterday it expected to report a $2.12 million profit for the closed division this financial year, less than it made in the first half, and that could get worse if there are any asset writedowns or other adjustments before audited accounts emerge.
The retail business, in spite of renewing its ''premium dealer'' status with Optus last year, is expected to lose even more money this year than the $994,000 it lost in 2010.
Hovanessian and crew have been closing stores and paring back costs and say they are looking for merger options, or even selling another division.
They reckon that trying to do a deal while the market had a value on the company ($3.3 million at yesterday's close) that they felt does not represent the worth of the assets and goodwill, could mean investors would end up short changed.
Given that Strathfield has well over 3 billion shares on issue, Insider reckons dilution of equity is probably not much of a concern for long-term investors any more.
PAPER TIGER
The hopes of PaperlinX investors that the leap in the company's share price last week was the start of something good seem to have been dashed by the group's nebulous ''restructuring'' announcement.
PaperlinX did confirm, in a separate response to a price query from the stock exchange, that it suspended trading of its stock on Friday due to that ''speeding ticket''.
The group also said that it was still analysing information and preparing an announcement, presumably related to the restructuring, when the ASX asked for an explanation.
That may explain why the statement it did make has some detail on the likely impact of its restructuring, but none on how it will achieve the reforms. That suggests the group has had to go public before it was ready, which means that it would probably like to tell employees the impact on their futures.
It was probably of little comfort to PaperlinX shareholders to see that the forecast after tax loss for the last financial year will now be closer to the top end of the group's $23 million to $30 million range, which was no doubt one reason for the shares easing back 1¢ to 16.5¢ yesterday.
That is before tacking on a one-off $10 million as the cost of the restructuring - an amount that it says it can fund from its reserves.
PaperlinX estimates it will save $14 million this year, and $17 million annually, from the changes.
The other small piece of good news for investors last month was that it again declared a dividend on its ''step up'' preference shares, which means that the company is confident of its cash flows.
SPRAY AWAY
The diet spray promoter SensaSlim Australia has been put into administration, with a company spokesman blaming the move on the competition regulator freezing its bank accounts two weeks ago.
Terry Harrison, a legal adviser to SensaSlim, also said that the company plans to widen its defamation action against the La Trobe University academic Dr Ken Harvey.
Harrison said that SensaSlim's sole director, Peter O'Brien, will add himself to the action and finance it. That followed a statement from Harvey that he would be asking his lawyers to have the action struck out given the SensaSlim administration.
Insider understands that SensaSlim's administrator, John Kukulovski from Jirsch Sutherland, will most likely recommend to creditors that the company be liquidated - leaving in limbo 100-plus franchisees who are thought to have paid $60,000 each for the right to a selling territory.
That does not mean the end of the product - which retails at the phenomenal price of more than $1000 a litre - because there is also SensaSlim Sales (Australasia), which is not in administration and seems to own all the shares in the other SensaSlim.
Curiously, KMB Business Advisors last month sent a note to the Australian Securities and Investments Commission saying that it was withdrawing its permission to be the registered office of SensaSlim sales because ''we have attempted to contact this client on numerous occasions without response''.
Harrison says KMB withdrew due to the bank account freezing (Insider understands there was only $280,000 in the till), although a KMB director said he did not believe money was the issue.
SensaSlim has also recruited the barrister Geoffrey McDonald to fly to London and sort out a few things with SensaSlim International, again according to Harrison. McDonald, a former partner at Hall Chadwick who Insider believes is in the final few months of his two-year ban from acting as an insolvency practitioner, seems a perfect choice to help SensaSlim at this delicate time.
