I think you may be right, the company is now engaged in massive...

I think you may be right, the company is now engaged in massive big bath accounting to front load as much pain as possible this year which will likely make FY19 and FY20 sing in comparison. $130M in increased provisioning and impairments to create a massive statutory loss from an underlying profit. Same with cash flow, they have increased working capital and inventory to reduce the cash flow to almost nothing.

The stock is trading at around two times underlying earnings, the damage to licensing revenue is already evident on the latest update and not too severe. They should help the remaining loss making franchisees to close out this FY with some cash support to help them go quietly and aim for a FY19 turnaround.

This thing is priced to crash and burn but I just don't see the debt covenants being breached. It's debt coverage has been 10 - 12 since 2014 and it's going to be redirecting dividends into debt reduction this year and likely next. Looking at EBIT of around 100M in FY16 and FY17 and net debt of 261M in 1H18 I just can't see it coming that close.