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Not able to post fully (lack of time) as not back home until middle of next week so a late quickie note on net profit and revenue result.
The H1 net profit achieved by BT demolished the analysts forecasts.
SP volatility may be further in store as I don't think it's yet sunk in that if the H1 performance is replicated to the year end, then the outstanding years to come as forecast by the analysts will have to be binned and thus by increasing their own forecasts that should in turn affect sentiment. And it's sentiment that drives SP perceptions.
Net profit came in at £856m
The analysts forecast was for £738m - on the nose!
Double H1's £856m for the year end, and you can see not only will that decimate the analysts CURRENT full year forecast of only £1.4bn net profit - but also match and or exceed the next 2 years which analysts forecast as being
£1.6bn+ odd, for each of those future years - after the current year ends.
- In fact a doubling of H1's net profit not only destroys the analysts future forecasts (which their clients refer to and/or depend on) but is looking likely to match last year's ACTUAL net profit achieved of £1.7bn! Or come within spitting distance of it, not to mention maybe increase on it, and therefore to beat the hell out of future years forecasts - if left stanfing by the analysts as is.
About the 13th November should reveal by how much the analysts ( if they are sensible) increase their forecasts by, - because they've been caught with their pants down on net profit!
No two ways about it.
Revenue is a different kettle of fish (analysts spot on, with revenue) and BT must find a way of halting the relentless non stop decline in revenue and in doing so, without attracting accusations of monopolistic abuse of power by critics.
If revenue was similar in performance to net profit there would have been no catching the SP today.
All I've got time for.
Can back everything up if required, with further data when I return home to my desktop files next week but make no mistake the analysts reputation is on the line if they continue as is, and leave their current net profit forecasts standing.
They have to correct themselves in the next update and once they publish their first increases in years it should have an effect on sentiment. . . and thus the SP ( unless it is all overshadowed by the declining revenue?)
"99.12p close after settlement. Pretty unbelievable considering results. Mkt as lost it’s marbles on value"
I suspect some of the big market players are targeting BT and Telecoms in general. My personal belief, and I have no proof, is that various big market players are engaged in a sustained market shake out. The reason I think retail are being targeted in Telecom stocks, is because of the explosion of 5G IOT tech forecast to happen in coming years. I believe 5G IOT could be the next tech bubble, and rightly or wrongly, it gives me confidence in my BT and Vodafone investments over the long term.
99.12p close after settlement. Pretty unbelievable considering results. Mkt as lost it’s marbles on value
"My apologies Velo the £1,062B was profit before tax, indeed the profit after tax was £856M. Still very good though."
Pretty damn good when you add in £1.969 Billion of capital expenditure in Fixed/Mobile network and net debt reduction of £720 Million.
My apologies Velo the £1,062B was profit before tax, indeed the profit after tax was £856M. Still very good though.
" Based on Velo's expected results below......
Revenue expected £10,642B.......... Actual £10,590B......... Missed by £52M
Profit expected £738M................... Actual £1,062B........... Beat by £324M
WOW profit beat by £324M and the share price goes down. "
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Whoa there Nige!
Net profit of over £1b (£1,068m) is from last year.
- This year's H1 is £856m and thus yes it beats the market's expectations of £738m which is an exact amount to beat and not an avareging as mean and median Q2 forecasts were identical, but not by that £300m+ but by a damn serious amount anyway. Well done BT!
No time to post further but will late tonight. The good news is that the full year net profit is now on course to beat both of the next 2 years net profit. It's blown the analysts forecasts for future years (and this year's) net profit out of the water!
Which means the analysts are compelled to INCREASE the net profit forecasts at the very next updates - exactly what's been needed, an increase in analysts forecasts. Only thing is not for revenue. Revenue has more or less come in as forecast as the forecast is an amelioration of median and mean average forecasts of all the analysts.
More time later tonight.
Unfortunately, IMHO think people see BT's SP going lower with what the World news is like at the moment despite the strong news today, and will buy more sub £1 and then hold for the divi's next year and beyond - especially as everything seems to be negative sentiment and decline at the moment. Can only top up on the drops if you done your research and trust the company and hold and hope the investments that BT are making now can reap the same returns if not more like the days of the 62p SP that rose almost 10 fold in 5 years later when economy recovered from 2008 recession (despite the events being different to 2008 vs 2020). ATB.
Based on Velo's expected results below......
Revenue expected £10,642B.......... Actual £10,590B......... Missed by £52M
Profit expected £738M................... Actual £1,062B........... Beat by £324M
WOW profit beat by £324M and the share price goes down.
The full impact of COVID would have been in Q1. When there was no sports and with lockdowns etc. I was thinking the performance should be better from q1 with sports back on tv. So in my opinion this would be a buy. But let’s see what the numbers say. I would say the numbers should be good if there are no surprising write offs.
Thanks Velo as always. Cheers mate.
(Far from home currently, so little time free; should have put some figures together on 'pre tax' profits, but ran out of time before hitting the road).
Posted the below last week, but here's a quick reminder before tomorrow's reveal of both the top line and the bottom line which BT must come in no lower than, on Thursday:
H1 Revenue analysts forecast to be @ circa £10.642b
- and thus expected by the analysts to be down from last year's actual of £11,413b for H1.
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H1 Net Profit forecast as expected by analysts @ a shockingly low £738m
- down from H1 achieved last year of £1.068bn.
It's the net profit forecast I'm having a v hard time trying to accept.
For Q1, BT smashed and bettered the analysts net profit forecast but, predicitably, the media focused on it still being down on the previous year anyway.
Whatever it comes out at on Thursday, this current year should be the ultimate lowest point for net profit with both next year and the year after, forecast by the same analysts, to show an increase in net profit for both those years.
£290m is the Q2 net profit forecast in isolation, and it's that ridiculously low forecast amount, that is added to Q1 actual that makes an horrendously low H1 forecast of £738m net profit. (Over £1bn last year! )
A real low point if BT performs as low as that - which I think they won't, as demonstrated by BT's Q1 net profit performance.
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The media will be interested in pre tax profit.
They usually ignore net profit. But holders shouldn't.
To recap:
1) Top line:
Revenue must not come in less than £10.6bn.
2) Bottom line:
Net Profit under any circumstances whatsoever must NOT be allowed to come in under £738m. Not a single penny below!!