SGF Discussion Materials

Happy new year!

2016 has been one of the most difficult years of my life so far. It was my first year in the deep end out of all education structures and finding my place and direction in terms of my career and life was monumentally difficult.

2016 was a year of setbacks. I lost a lot of confidence in myself after getting knocked back over and over from some great job opportunities in banking and consulting. I had no choice but to settle for a standard processing and admin job in the fleet leasing and equipment finance space, and looking back I think it was a humbling experience to start from scratch, to know that I still have a long way to go, instead of having everything from the get go.

Whilst working in the dead end, I decided it would be worthwhile to make a power play and to demonstrate my skills and passions for corporate finance and strategy to management for fun and to test whether anything would come from it.

Prior to my employment, the company was engaging in significant M&A activity as the industry was undergoing consolidation. I wanted to learn how to model an acquisition and show it to the managers. However, I discovered that most of the small players in fleet leasing are privately held which makes information impossible to find. Due to time constraints I ended up practicing an equity valuation analysis with DCF and comps.

Issues that arose:

The group went through a complete restructure which reset some balance sheet accounts…

Due to the number of settled and unsettled acquisitions, accounting was a bit ambiguous with revenues/net profits, goodwill and acquisition funding.

The three financial statements were difficult to understand, as line items were not split between current and non-current, meaning cash operating activities came from both current and non-current portions which doesn’t really make sense to me.

Due to the announced acquisition of Motiva, a small UK novated player within my financial modelling period, this was not accounted for in my analysis, although in my opinion the effects would be negligible (purchase price around $21M).

I gave my materials to HR, who promised to show it to upper management. I pranced out of the meeting quite confidently that I would hear back from one of them. 2 weeks later I received the most standard email along the lines of “sorry you’re not experienced enough to work in accounting”. If only I approached one of the directors directly because I know not one of them saw it, and I would think they may have found it insightful.

I left the group shortly after after receiving an offer from a bank in risk and operations, so that’s where I’ll be heading in 2017. I’ll also be studying my MFin on the side. Busy year ahead!

Check the deck out here: sgf-draft1

 

Quick update – since Sirtex got crushed, I have taken a hiatus from daily market watching. it’s been liberating to say the least. I took a peek at half year announcement, and it wasn’t too bad.

I also have never held any stock in sgf.

Instead I have been binge watching TV shows. If you haven’t seen Westworld it’s my 2016 favourite. Mr Robot is pretty good. Archer for some cartoon comedy. Designated survivor for mindless action. Currently exploring Atlanta coz they won the Golden Globe.

Peace,

Daniel

 

All content is general, and not specified financial advice.

 

 

 

 

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