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These results are disappointing but not as bad as they look on the surface. On the face of it both PBT and EPS are 55% down. However, if 2015 H2 remains flat on 2014 H2, then the yearly results will be just 25% down. It’s also worth noting that, for AEO, H1 is never as strong as H2. Dissecting the reason for the sharp fall in PBT and EPS: it is because gross profit fell 125k but admin expenses remained constant thus making the profit before tax £125k lower than ’14 H1. These poor ’15 H1 results will mean the yearly results won’t exceed 2014’s but it does appear to be a blip. It is the worst 6 month period they’ve had for ages (it’s had at least 24 months’ of improving performance). And contracts being cancelled is the sort of blip you can sort of expect with a tiddly company like AEO and, just because it has had a bad 6 months, it doesn’t mean it’s not a good & well-run company. Considering its past results the encouraging H2 outlook make it seem like a blip. Combine that with the fact it recently won industry awards (that will help it win contracts in the future) and I feel as though the market has reacted harshly to today’s news. Taking a longer term view these shares look like a bargain. An £125k drop in PBT due to an understandable blip doesn’t justify the current market valuation.
Indeed...was furiously refreshing iweb on my phone from about 7:58 and was able to hit ejector seat on the bell...consider myself very fortunate to escape with a £1.50 loss! Arguably a little unfair to do a EV/EBIT based on the half years when they've said it'll be the weaker of the two? That said the statement isn't hugely reassuring and I now reflect differently upon the lack of forward guidance in the finals. Ilustrates danger of buying into results in absence of prior indication. Receivables issue still in play I see. GL to those who are sticking it out.
management sound relaxed (which in this case I take negatively)...combination req low multiples to make this attractive again ...imv/dyor/not advice, ofc
We anticipate a stronger second half and are pleased to have added some new clients along with confirmation of our larger summer projects. During the six months we achieved a pre-tax profit of £105,316 (2014: £225,941). Operational costs were £702,238 (2014: £700,102).
Yep, not good at all. Lack of revenue visability bit hard.
Good recovery potential, RNS says second half of year should be better Target 50p to sell
@Ev/EBIT of 5-7, this would be trading close to 20p ...
Disappointing.
so decent rise ...fingers crossed for 2morrow
Interims should be outstanding. Why? Crazy summer with over 30 projects which is normally the quite period. New financial clients and preferred supplier agreements Xmas was insane that's why new brand launch is delayed to feb. No brainer IMHO a price just does not reflect progress and fundamentals
finally. HY's must be soon, 20k buy popped through I think.
goes a decent way towards (30-50%), doesn't clears the debt ( .. clearly the mismatch beteen Zam profits and US$ debt a key issue
Thanks, yes I bought in to ZAM on the day of the announcement of the possible Zamita transaction, but then sold out as it drifted. My understanding is that the sale has pretty much cleared their debts. Is that correct? Will take a closer look at SNCL.
extraordinary quantities lol ...like a cesspit (mixing metaphors) ...I like bigger more boring plays (CGS, DWHT/A, RBN, RGS, SAG, TFW, REDT, GBO)...but half those have been challenging recently lol ...have you looked at SNCL or ZAM? Both may be at bottoms, with sncl showing some signs of life and ZAM attracting decent director buys last week
For my sins it is WSG, enough to try the patience of a saint! I hold about 20 companies in total and WSG is by far the worst performer and also one of only two I hold with a market cap greater than £5m. Much prefer the tiddlers in the current climate, although as you know there is an awful lot of dross out there, more so at sub £5m mc level.
what is yr other large holding? ...just nosy lol
Make that 3rd largest. Forgot about SEV. How could I forget about them!
Good to have you on board. It looks like a few others have bought in today. I think the only thing holding this back other than a seller(s) is the earnings visibility and with no trading updates to go on and the sometimes lumpy nature of the revenue, I think there are probably quite a few on the sidelines waiting to jump in if the profitability is maintained. The problem with that strategy is that with not many shares in issue it will move quickly. Personally, I would rather be in than out and this is now my second largest holding.
@46p for results...and possibly beyond, dependant on their content! Hoping to see cashflow up (yoy) and receivables down...main clients Microsoft (and subsidiaries) and Vodaphone, so optimistic that many of these will have come through in H2.
You know even if progress had slowed Libero, which it probably hasn't, MCAP of £4m for a divi paying profit making company with at least around £1.5m in the bank, crazy. Let's see what the HY brings.
should be out tomorrow. and they should be good :D
next week?
I also bought some at 53p though! Been squirelling quite a few of these away in preparation for the results. Although everything seems to drop on results anyway....
Dan
A good summary smudge, although not sure on their policy of contract wins and whether they only disclose new ones over a certain value. There 5 year ambition is achievable if they maintain their progress. Looking at some of the stuff they do it is high quality.