The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Seeing 181p on live prices currently. :)
( Concludes Part 2 of 2 . . . )
. . . If the market doesn't like the profit declared, and should it be closer to the TTM calcs than the guidance estimates, then if received badly I'd still be looking to add cheaply than pull a face as TTM is still forecasting a decent recovery in profit.
All company noises since H1, appear to pooh-hoo my lowly £40m forecast in Net Profit.
* Dividend cover is absolutely fantastic and easily affordable, so I'm looking forward to a decent divi payment :)
* Net debt is at a record 6 year low! And backed up by negligible gearing.
* Liquidity is strangely not so hot but good enough, was expecting better.
* And broadly speaking, a host of very nice looking fundamental metrics in RCH's favour.
So, all looking good for expectations but a huge parting of the ways in net profit expectations. I need to be "wrong" on Net profit, and the triple figure net profit guidance issued for RCH needs to rule on the day.
There's been nothing but bullish noises coming out continually from the company, so not expecting net profit to disappoint.
(Part 1 of 2)
I've bought-in to the story narrative of RCH by investing. Looking to add by topping-up too.
Being new to RCH (although I've known of its existence for some years) I thought this strategy presentation on Monday was the most important thing on the agenda and firmly believe, assuming Monday goes well, significant progress can seriously get underway from Tuesday onwards with both the company and the SP.
But equally significant is the full year trading results due to be revealed simultaneously that day too.
If all you've been reading is about this jam-tomorrow strategy presentation you might be forgiven for thinking the results are going to be stellar. Not quite, but they've been well sign-posted so shouldn't come as surprise to analysts.
A lot of talk is of:
". . . But Reach has since released an encouraging H2 update, which explains that in the five months to end November, the revenue trend improved, with a 4.4% fall (better than the 6.3% H1 drop) . . . " etc., etc.,
In other words revenue will be down, but not as much as in the first half of the year etc., - usually well received by analysts.
So had to dig in the figures to see what's what, and therefore if the actuals on the day are better or worse than forecast a better handle might be obtained before the market opens on Monday after they reveal the finals, usually at 7am that day.
I want to examine what has been said to what might be expected - and the potential for reaction by the market.
Some quickie points:
Revenue is estimated to come in at circa £700m slightly down on the preceding year's £723.9m But using TTM calculating methods I'm seeing same-as condition to circa £727m+
So, it would be nice for RCH to have underestimated in that instance wouldn't it? But that figure of £727m is an estimate itself, so take that into account.
After several years of steady Net Profit circa the £60m+ and upwards area, last year turned in a huge loss at a stonking £119.6m Net Loss! All that is done and dusted though.
This year estimates are for an incredible £116.8m Net Profit (higher if pre-tax profit is all they quote on the day).
That is what the market will be looking for on the day to add credence to the future forecasts. Only one thing. Using TTM calculations which leave out the 'news' increases reported since H1 I can only come up with £40.5m Net Profit.
Good enough, after that triple figure loss the previous year. I'm hoping that difference in net profit is an error on my part as there has been some tremendous 'talk' of huge gains made since H1 - but is it huge gains that have to be yet monetised? It's the net profit I'll be looking at most on Monday morning.
If the market doesn't like the profit declared, should it be closer to the TTM calcs than the guidance estimates then if received badly I'd still be looking to add cheaply than pull a face as TTM is still forecasting a decent recovery in profit.
( Continues > > > )
Thought it was a strategy presentation only, on Monday.
But the analysts initial interest on Monday is the big reveal of the annual results.
The content of the strategy sounds very bullish so will attempt to examine the balance sheet expectations for the annual results later today and post under this header later.