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gap with DQE India widens still further
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Are you looking at group 31/3 figures?
is the measure most commonly used in valuation because it takes into account the full capital base supporting the business ..in simple terms: equity plus debt (but not the working capital that goes with the business) ..complicated by provisions and pension deficits etc etc (but not relevant here) ...the MCAP has collapsed but the value of the business has not cos the debt has risen
EV?
but EV is £25-30m and hasn't fallen much at all ...the debt and limited/negative FCF would pose v v serious problems for company in UK, I would imagine ...but this is India
£5.9m - bonkers!
down here through that false floor
Thanks for your discussion on the differences between here and India. It is an amazing sp difference. Just looked again after that 10% Indian fall yesterday: India 1month Level 0% 12months Up 256 % London 1 month Down - 19% 12 months Down - 9% I think, like you, that the cultural differences with relaxed attitude to payment and loyalty to the company must be playing a huge part.
Jolly, agree. The impression i get is one of a family foundation rather than a hard nosed business... Where the creative aspects far exceed the leadership and direction/expertise to drive the practical side of the business.. It could be that the greater % of shares in India are held by Friends, acquaintances and family therefore the market for the shares in India are more tightly held....IMO ...... You will find that even here among businesses owned and run by Indians......they support one an other and are very close knit in my experience among family and friends and within the community, It is also one of the reasons that many are successful.....but in this case they are lacking some of the expertise and disciplines required, which are possible external to the circles they are familiar with....if that makes sense and it is a subjective opinion. Definitely there is a cultural aspect, not just in POV...
RW, my gut feel is there is a huge cultural difference in PoV...that Indian businesses and investors are more relaxed about precarious finances...but it is only a gut feel ...I'd love to be able to sell DQE India/ buy DQE just as an experiment...what could go wrong??
Jolly that is strange.....have you noticed the impact of exchange rates on revenue and profits, this will also be reflected in the order book.....Revenues up slightly, profits up, order book down.....but profits have a high % exchange rate gain from what i can see compared to the previous year...The order book is also supposed to include a higher % of ex Indian orders going forward.... Therefore collection timing is critical.....unless they have Bill of exchange backed by Irrevocable letter of credits to mitigate some of the impact....Which they may have...IMO
fallen 10% today in India...still some way to catch down though
has the debts..I've had a look & reckon (as expected) that there can be little indebtedness at holdco level ...but grateful for others' confirmation
if I were money & talking with DQE, I'd look to buy control
is that right?..surely the debt is secured on the receivables @ operating company level (DQE)? ...on the whole lenders go down the hold co structure to op cos and security...and equity holders go up to ultimate holdco
In answer to jolly speculator, maybe it's because DQ India does not have 50% of it's turnover as long term debt. We were all pleased and happy to see that the CEO was getting business at Cannes, and plenty of smiles, when maybe he should have been knocking on doors and getting money in. They will obviously need to raise plenty of cash to produce orders gained, and pay their bills. I fear debt will sink them. The six month trading statement last year was not overly concerned with debt, and there have been no RNS announcements since that time to inform shareholders of the grave situation. Extremely peed off.
bizarre...why not sell there; buy here? or is arbitrage impossible?
Just another healthy diversity! India: Today - up 3.5% 12 months - Up 306.25% London: Today - Down 31% 12 months - down 1% Some differences of opinion there!
Agreed - Jolly healthy! In all serious, I get the point about the sales ledger. I can fully understand why that would put people off and people are right to vote with their feet if it concerns them.
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I'm definitely still here. It's a matter of time for me in my opinion. I am not sure there is a revenue recognition issue here - that side of the business (as it is for all businesses) is now a significant risk area for auditors. As such it will have been audited to death, mark my words. To value this company at £7m is daft - I have topped up this morning. Quite good news that they have delayed the dividend and also better news that they are looking for other ways to finance the business. In my view, this will not be a dilution as they have already done that once before and Tapaas won't want his own holding diluted. Don't forget he bought more at 25p so he will be hurting too. For me this is just another AIM company whose sp doesn't correlate to the value of the firm. Best of luck all!
Sold 30k @ 12.3p ... debt at approx 1x revenue , although receivables are higher ... smallish amount of receivables declared bad + talk of "refinance the business" in financial reveiw section of latest full year resuilts. oops!
Riding - thanks for thoughts and hopes for the long-distant future. Jolly - I'm not saying the reaction was incorrect, just that it has had a terrible effect on the sp. Anyway, sorry to hear that people are heading for the exit. I'll hold.
Hi Pablo....The management do seem to have the ability to raise funds, the business does have a product. I hope that, one day, you mentioned comes soon....Hidden within the mess is what looks like it could be a good business. The problem is if they continue the way they are, they risk running out of time as the problems are not just financial as that is a symptom. GL...Hope it comes good for you