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Wow the A hole falling out of ASOS this morning after that horrific trading update. Lets see how biased their reporting is today!
Tom, I think you hit the nail on the head there, exactly.
Why would a Boohoo fanboi post this? Is he worried that his fellow shareholders are going to sell their overpriced shares before the music stops?
Very, very naughty what they did there. I believe that could constitute market abuse. Very biased just really publishing the small print caveat that accompanies every trading update (Results/ Interims).
I have reported their antics to Koovs, Newgate communications & have asked the FCA to look into their behaviour.
"The going concern" bit is required by law. You will find it with many companies which raise funds.
Koovs (LON:KOOV)
Share price: 7.1p (-11%)
No. of shares: 356 million
Market cap: £25 million
Preliminary Results
This "Indian ASOS" says that current trading is in line with market expectations, and is very bullish about Q1 in the new financial year.
The results for FY 2018 are rubbish, so it's important that it has something to shout about.
In FY 2018, on sales of £6.4 million, it produced an adjusted EBITDA loss of £12.9 million. This is about as bad as it gets in terms of the companies that I cover.
The company has successfully raised lots of new money and is in partnership with Future Lifestyle Fashions, so you would think that there is no serious threat of insolvency. However, there is a rather lengthy going concern note.
Apologies for the extended excerpt, but I think this stuff is important:
"...the success of the business remains reliant on the Group achieving an adequate level of sales, driven by an appropriate level of marketing spend. During the next 12 months the forecast level of costs will be unlikely to be covered by the gross profit generated from sales. As such there is a risk that the Group's working capital may prove insufficient to cover such operating activities. In such circumstances, the Group could be obliged to seek additional funding through a placement of shares or source other funding. In the absence of additional funding the Group has the ability to reduce costs to ensure that existing cash resources together with the funding described below are sufficient to enable the Group to meet its liabilities for a minimum of 12 months from the date of this report....
The directors have concluded that the circumstances set forth above represent a material uncertainty, which may cast significant doubt about the Company's ability to continue as going concern. However, they believe that taken as a whole, the factors described above enable the Company to continue as a going concern for the foreseeable future."
It doesn't really matter to me how good Q1 at Koovs was. The risk of investing in an Indian business combined with the company's terrible financial record and the going concern note above make it uninvestable for me. Bargepole treatment.
https://www.stockopedia.com/content/small-cap-value-report-wed-17-july-2019-not-taking-profits-upgs-koov-vlg-493506/
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