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Yeah but easy enough to roll forward the working capital position from 31st Dec to 3rd Jan I think - extra £300m cash which still leaves a net current liability position. Paid off short term bank debt but that just nets off within working capital.
I just noticed in the notes, however, that they also received a "further working capital cash adjustment" as part of the sale, but can't see a value. Hopefully that will have addressed my concerns!
Clearer picture tomorrow morning I guess, GLA
The balance sheet is not the most up todate. Its upto 31/12/19 and in the hy results released in march they detail events post results.
So it is pointless imo as by 3/1 its out of date.
GL for tomorrow. hope its a decent update. I only have a small position and im Yet to decide on adding more, it looks very cheap but i will wait on tomorrow's read.
Wouldn't say it's pointless - it's the most up-to-date info we have on their financial position! And that was pre-covid.
They paid off their bank debt yes, but still had significant trade creditors which were not covered by trade debtors and the admittedly large cash balance.
We have to hope that they got their short term liquidity / working capital under control, otherwise the 100m cash balance people will need topped up somehow!
Pretty Pointless looking at half year report to 31/12/19 and quoting liabilities. On 3/1/20 they paid off net debts. They are now debt free with no covenants.
Yeah after saying some people are overly-optimistic, my post perhaps came across as overly-pessimistic!
I still feel the sp is undervalued (hence why it's my biggest investment) but I'm thinking 150-175p is a more realistic target in the medium term.
Hopefully you're right about month end cash balances re liquidity. Perhaps much of the current liabilities at 31 December were related to sale and hence non-recurring. That's what I'm hoping for anyway ??
DaKen, I don't think the picture is as dark as you paint it. The end of month cash balance captures the current asset/liability equation better than a twice a year balance sheet snapshot.
With all the movements around the 'demerger' I found the Dec 31st balance sheet tough to interpret, and I'm normally pretty good with that stuff. Sadly, I don't expect an update on the balance sheet in tomorrow's update. But we should get an estimation of the average month end balance. Did they manage >£100m they guided for the last 6 months? What will they forecast for the next 6-12 months? Key is that it remains positive.
CV19 impacts?
I'd guess they'll update on the order book too, but forecasts of year end revenues and margins will probably be withheld under cover of CV19 uncertainties.
I'm not currently invested here but keen to check out tomorrow's update.
*exceed current assets
Doh!
Hello all.
This is my single biggest investment but I do think there is a lot of over-optimism on here, caused largely by misconceptions on the value of having 100m cash and the fact the cash balance is roughly same as market cap.
100m in cash doesn't mean much if overall current liabilities exceed current liabilities - it's effectively our creditor's cash not ours. I think Londoner has made this point before - cash balance only worth writing home about if it's EXCESS cash.
In latest balance sheet, current assets were £645m and current liabilities were £972m (does not include housing business, such assets and liabilities are shown separately on the BS). Even after the £300m cash received for sale of housing business, there is still a net current liability position - which is very precarious.
Net assets at 31 December £700m, of which £1bn was housing business subsequently sold. £400m sale proceeds went to the company (rest to shareholders) so net assets after the sale would be around £100m - largely made up of goodwill and investments.
This is just my understanding and I could be wrong - happy to be corrected if I'm missing something!
It will be 7am.
Yep, GL all holders. Reckon it’ll be a 7am or 4pm RNS?
Let’s see what tomorrow brings, personally I think it will be alright, cash in bank £100m+ contracts + completed contracts, with profit margins £130m+ in bank:)))
Trading update, will imagine it will effect the SP either way.
Why Wednesday ?
Honestly feels like Groundhog Day watching this every day. Every morning it’s up, then slowly decreases to end the day in the red. Rapidly losing interest with this share. Same old **** every day.
Wednesday is will probably be the day where we finally see movement. But it’s just so repetitive every day.