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Winnings, if you're worried about the potential £10m fine, you're not seeing the wood for the trees.
Over the last 4 months the market cap of the company has declined by over £400m. I repeat £400m!
If you think that's over done, even by just a little bit, then the fine (and indeed the level of provision) pales into insignificance compared to the value on offer at the current price.
I may be entirely wrong, but in my view the word ‘provision’ as used in the 2021 accounts, does not mean the amount has been deducted from the year’s profit, but remains a provision for eventual loss of the £7.9 million case, i.e. not deducted from profit until the case is settled. But please correct me where I am wrong.
Making the provision in the 2021 accounts recognised the fine as an accounting loss in this period. However, the fine has clearly not been paid (and may never be) so the cash has not been paid. So whilst an accounting loss was recognised in 2021 the loss of cash (if it comes to be realised) has not. Another "loss" of course which hasn't been recognised is the loss in reputation and of the CEO should the appeal be unsuccessful.
GLA
I am not sure on this, but setting the money aside does not register it as a loss? Can anyone clarify?
Yes £7.9m was provided for in the 2021 accounts and reading between the lines this was against KPMG's advice and as a consequence they resigned. This should be the maximum amount of the potential fine and any successful appeal or indeed a settlement for a lesser amount will add to reported profits and improve the financial position. It's worth noting that even taking account of this provision of £7.9m reported profit improved last year. Looks to me like the fall in SP has been overdone and I'll be adding to my position.
I guess the big imponderable is the position of the CEO- he could be going for either personal reasons or as a result of the CDO. However, the business is much more than just the CEO and it should be fine without him.
I'm comfortable to stay invested and indeed add to my position at this level and see what happens in 2023.
GLA
I thought that 8 Million had already been set aside in the 2021 accounts and was there a discrepancy as to how it should be written off, hence the change in auditor. It would be beneficial for the SP that PB resigns and fecks off into the sunset.
I think the prospect of the fine was already priced in before the 40% drop in the SP on Wednesday. Also, although PB is off until the end of January the business is so much more than one person leading it. The drop in the SP was ridiculously overdone
Perhaps not quite so strange. CEO Butterfield stepping back causes uncertainty. The potential fine of £10 million hanging over the Company (of concern to Butterfield) could wipe out net profits for a whole year, thus compounded uncertainty.
I sold out quite some time ago when I felt that the £10 million fine would be unescapable, I followed my gut-feelings, although I might be proven wrong.
High risk territory here for the time being, IMHO.
The RNS imo didn't warrant a drop as it wasn't that bad so as isaid expect the 60's to be reached pretty quickly
I added more early yesterday so missed the drop into the afternoon. Problems do seem centred around the CEO and I would imagine he won’t be coming back. This is an recession proof play with a 4% divi at this level. I am going to wait and see what range it finds as the market prices in this news. But with a Mcap only just above annual sales this is clearly undervalued. Well done to all those who bought in late yesterday/early morning!
Cracking buys coming through, don’t look at the colours, only the numbers.
Thanks toffeeman, that's jolly decent of you.
There's still over 50% upside from here just to get back to Tuesdays price (ie not too late) :)
I got greedy and missed it. Good to see some folk making some money though.
And so the recovery begins.
The news yesterday was already priced in before the drop so my target is in the 60's
im in
Looking at their accounts tonight, I have no worries with my buy today, even at 12% down. The drop was overdone, if it goes any lower they will be prime for a takeover, then the fun will really begin. GLA.
Looking at the delayed trades, I'd say the drop is overdone! We're still making a profit & the bad news is behind us now, expecting a bounce tomorrow hence my 50k share buy in at the close! Glad bd
Agreed, wouldn’t be surprised if the shorts increased, keeping my powder dry until this settles
Indeed, buy low sell high. I am a definite buyer here, but being greedy I want a bit lower entry. A major error not letting PB go, unless it's a health issue in which case we wish him a speedy recovery. While the question mark hovers I think this could drift lower still.
Well I've taken a punt on a mini-recovery tomorrow with a buy today @36p
"Be greedy when others are fearful" and all that...
I'm in at 36p. Decent long -term prospects. But Peter Butterfield must not be allowed to return. Over promising and under delivering is the exact opposite of what they should have been doing, and expectations of picking up orders off the back of a recovery in the market rather than having concrete orders actually placed is again very poor form. Whoever comes in needs to be far more conservative with forecasts - and realistic.
Seems mad that around £3m sells. (probably less than £2m net) drops the Mcap b over £100m. Sadly I couldn't say hand on heart its oversold. Heading the wrong way as I type.
Have we reached the bottom yet? I am surprised it has dropped this much, 12% down trying to catch it, but I reckon the 36pis buy price was the bottom.
The possible fine is an issue. Not as much of an issue as holding uk market shares with no voting rights in a company based overseas.