Sapan Ghai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
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Totally agree they knew about this before first results date hence the werid delay. Wasnt montioring share then but would have opened large sb. The drugs and CFO comment is the werid one.
Have to imgane sharks will want to short this so likely to bounce about but also expect this to be delisted as its going below a quid which might take a week and then he can buy it back.
Share holders get killed again by MA
it really was a can of worms RNS
"I have a theory..."
You certainly do, I have a simpler one....incompetency born of ego.
I thought The Guardian article was fair, but with out digging into the detail there are 2 very obvious red flags.
The delay and the exit of the CFO.
The buy back feels cynical. But that's the problem, and why lots of funds avoid the stock, too much control from one major shareholder.
I have read the Financial Statement in full and the Guardian is absolutely correct with their analogy.
As for the Belgium tax demand that was mentioned, almost as an afterthought, right at the end of the rambling report.
The most crucial thing is what Sports Direct did not say. They did not say that the Tax demand was outrageous and wholly without any foundation whatsoever - - - Sports Direct rather meekly say that they will enter discussions with the Tax authorities and are confident that the Penalty would not apply. They are basically admitting that they have a case to answer which does not bode well.
Also how on earth can this Tax demand (with interest and penalties) suddenly appear out of the blue--that is simply not possible and Sports Direct must have been fully aware of what was going on in the background.
I have a theory that Sports Direct knew that a Tax demand was innement and waited for it to come through before the results were posted in order to get the share price as low as possible in order to buyback shares at the lowest possible price, perhaps to go back to private ownership. As i said, it's just a theory.
Basically 200m they owe whatever.... 400m might be negoatiable... i have done research and reckon bottom about 120 to 140 monday
Again from The Guardian:
"John Colley, associate dean and professor of practice at Warwick Business School, said: “Mike Ashley’s failed bid for Debenhams may have provoked an angry response at the time, but it may have saved him and Sports Direct from themselves.”
https://www.theguardian.com/business/2019/jul/26/house-of-fraser-poses-significant-challenge-as-it-posts-546m-loss
The Guardian covers it all in one page:
Sports Direct’s annual results statement is an extraordinary document, peppered with shock financial revelations, scathing attacks on financial advisers, and stark warnings about the state of the high street. The idiosyncratic publication often descends into a rant by Mike Ashley, Sports Direct’s founder, controlling shareholder and chief executive. Here are some of the key points.
https://www.theguardian.com/business/2019/jul/26/the-state-of-sports-direct-key-points-from-results-statement
Sports Direct insisted that it would able to address the points raised by the Belgian tax authorities, but Chris Wootton, the deputy finance director, admitted that the company had to persuade its auditor Grant Thornton that was the case.
Addressing a half-empty meeting of analysts late on Friday and hours after it was scheduled to start, Mr Wootton said that the Belgian liability “comes in at the eleventh hour?.?.?.?and obviously we needed to get the auditors into that comfortable space, that we do not consider there is any probable material risk at this stage”.
"What does everyone think about these?"
Further evidence of why SPD is uninvestable. Just for a moment imagine the managerial stress of having to sort out Debenhams & House of Fraser. The House of Fraser they now wish they hadn't acquired. Then add the undoubted extra stress on the balance sheet of continually having to push cash into them. They would have got top line growth, but the profit would have gone to further hell. It's a rant, a distraction, that's only going to further unnerve institutions. I'm surprised, given the regret over HoF, they are willing to back a spurious court case. You know what they say comes before a great fall dont you? Pride, but in this case...ego. It frankly just sounded like desperation. That's not a good thing in management.
The tax bill and failure of HoF is well covered, but what was the statement about drug tests to prevent the risk of blackmail? That's got to be one of the most bizarre statements ever to come out of a company statement. Swiftly followed by the departure of the CFO? Ashley also called into question the quality of City advice they had received, can it be presumed that the due diligence reports were defective, motivated by the prospects of fat fees? Bizarre ... leaves the impression that the CFO compromised himself in some way ... and why mention drugs tests? Bizarre.
What does everyone think about these?
well done.
Where is this tax demand coming from....is it from the HoF business or from Sports Direct. It's hard to see how HoF was generating enough business - never mind routing it through Belgium - to create a Euro 600 million liability. This is a total balls up oy a pi55 take!! Did Boris Johnson arrange the deal??!!
Skier...... The big 4 accountancy firms are not inept far from it ... Their tax acumen is second to none ... for years they have used their knowledge to make sh*t figures look like American Tech companies and have hidden things away for a later date .... They were being paid handsomely to do this by the companies employing them ... However since the likes of CAKE CLLN and many more they have come under intense scrutiny themselves and no longer can they hide the basket case companies... The big four are now under threat f being broken up .. They now have to play the game for a while
The Belgium, French, Dutch took on a lot of extra tax staff in preparation for a hard Brexit in March, as it did not happen they have not had much to do and seem to have been giving some business a hard time. One local to me was assessed for around 15M by Belgium tax authorities, finally reduced to 300k but it cost the company an additional 70k in consultant fees to resolve.
And the CFO 'pursuing other interests'. Odd? Or was that expected?
Something like:
Hi Mike. We have a bit of a problem.
What?
We have received a tax bill from Belgium.
I see. Ok well.......... how much is it?
674 million Euros...
Bleeeeeeeeeeeeeeeeeeeeeeeeeeeeeeep. Blleeeeeeeeeeeeeeeeep. Etc.
------------------
I don't know that much about Sports Direct and I assumed this tax was to do with House Of Fraser.
But it does NOT say that as far as I can see.
It seems to be to do with How the whole Company functions. Not good.
All IMHO.
Well. Wow indeed.
So apart from the Belgian tax demand and HoF being a basket case all is good.
I don't understand this tax thing. Erics corner shop may well justifiably not have a good understanding of tax, but a company the size of Sports Direct possibly has its own tax department, or if not will take advice from professionals (probably the big four) about managing their tax liability. I can understand a relatively small claim, say for sake of argument £20m but how the **** do you get it wrong by £600m? Yes they will appeal, no they wont pay immediately (is very unlikely they are able to) but the trouble is that if you don't and the claim is upheld the interest applied is penal (it is in the UK) - forget your bank base rate, it is many percent.
Very naughty to try to hide it away, as if it wasn't going to be noticed.
I think the tax issue is a "wait and see" statement at the moment and unlikely to result in paying the headline figure...far from it ...probably just the original tax demand .... original tax could have been €220m ....plus 200% penalty of €440m , plus say €14m interest .or whatever
so..they may end up arguing down the c.€220m...and paid over 12 months ...who knows ...still..a sizable amount mind you
"The payment notice is not a formal tax assessment but a "proces verbal" whereby the Group will enter a "fiscal mediation" in order to respond to the tax authorities questions and provide them with documentation. Accordingly, there could be no immediate recovery action. "
"....at the date of signing of the financial statements, that it is less than probable that material VAT and penalties will be due in Belgium as result of the tax audit. "
Holding shares over a trading update or results day is risky business these days...any slip up and the City crushes you for it
..long list these past 2-3 years +
Buried at the bottom of the results, Sports Direct revealed that only a day earlier it had received a payment notice of €674m from Belgian authorities - including penalties and interest payments - after a tax audit.
But the group said it would enter talks with the authorities and believed it was "less than probable" that the final sum due would be "material" to its finances.
It said the sum related to "amongst other things, the tax treatment of goods being moved intra-group throughout the EU via Belgium".
https://news.sky.com/story/sports-direct-faces-605m-tax-bill-and-terminal-problems-at-house-of-fraser-11771188
might buy some at 50p
Joke of course but bloodbath on monday
Actually 1p for your shares!
Yup true, car crash on monday...I change my offer now 45 new pence for your shares
As predicted a couple weeks ago (see thread), this has got CAKE written all over it.
The newspapers, like the Wail, have been hinting at it for weeks...
The auditors here are Grant Thornton, one of the most inept companies on planet Earth. They are like them beady crows in The Omen movie, lol. If you see them, run away.
Monday is gonna be a bloodbath. This is headed for under £1. Fortunes will be lost, and won ;-)