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Wednesday, 11 June 2008

ScS shares fall 38%. Will it survive?

The news today that ScS has had credit insurance withdrawn by an unnamed trade insurer led to a 38% fall in shares today. This is seriously bad news for the company, suppliers won't want to supply stock on invoices that are not insured, could this cause the company a serious cashflow problem.

Could be that a restructure of bank debt will be required, or a rights issue or worse. Not a great time for the company or its shareholders.

With house sales down dramatically and estate agents failing daily, the general public is aware that times are getting harder. So it is probable that big ticket sales like sofa's will be postponed by punters. "Do we need a new sofa, or put petrol in the cars"? Easy decision!

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