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thanks the Bod have a lot to gain from getting the share price above £1+
2.6m options i made it
Nosugar - I have a lot of experience in transitioning companies to FRS-16 - not only do you have to show the liability in the balance sheet, but you also have to show the right of use asset and depreciate it over the period of the lease, whilst discounting the value of future payments to net present value.
my understanding is you have to show the lease property costs as a debt so kind of a prudent assumption to stop companies having huge off balance sheet debt.
"For those interested in the increase in net debt, I believe this is down to the transition to IFRS-16".
There was no increase in net debt, and net debt does not include lease liability.
For those interested in the increase in net debt, I believe this is down to the transition to IFRS-16.
when is the aa next update??
i think the £50k is more his own money than ML
so if it was going you wouldnt need to buy just let it fold. hence on balance i take it as a positive but i get you point. i would like a few more of BOd buy.
£50k is a decent chunk for most people
"it is a no lose for Raza and ML"
This is what concerns me. It's bitter-sweet in the sense that we can't really take any solace in his purchases.
it is a no lose for Raza and ML
goes into admin get it on the cheap write off £2m as nice tax loss
does well goes to £1 plus make a load of cash
no lose and first in line to take over.
mircolise want it know doubt about it in my mind.
Raza is a smart guy and knows the industry here is the opportunity to become an end state player. i bet it still bugs JW that they had to take the £2m.
JW was very clearly when they announced the £2m funded any working together was at least a couple of years away, ie when i am ready to walk out the door.
plus looking at the annual report look at rev by region and the fact they have signed an agreement is scandi.... another good opp.
I would imagine the money is irrelevant to him, it is the intellectual challenge that appeals e.g. If he calls it wrong then what does it say about his decision making.
IMO the bears cannot construct any meaningful argument that isn't already priced in. Statements such as they are crooks or they will be gone by the end of summer are not well reasoned. This makes me think the bear argument is weak.
Personally, with no debt repayments for 12 months, advantages in government assistance during this period and £1.7m in the bank I feel confident they will be OK for the next year. Of course, there could be huge fall out as a result of COVID.
"I feel inclined to write to the FD and ask for clarification."
One of us definitely should.
Be good to get clarity, but also keeps them on their toes.
"Page 73 gives the interest charges (per annum). I must admit I thought the new £1.5m loan would be cheap but it is 8%."
Yes, a pretty incredible rate given present market conditions. However, if this year proceeded as anticipated ("a year of very significant growth"), then the loan may have been well placed.
It's the intentions of Microlise that seems to be a piece of the puzzle that is more difficult to fathom. My guess is a RTO, but at what price. Are they really hoping/expecting Trak to go into Admin? Are Trakm8 and Microlise really in direct competition? What about the promised increased synergies and collaboration opportunities?
If admin, then why would Raza waste £52K of his own cash? People will say ah well, £52K is peanuts to him, but £52K is £52K and most wealthy people I know are tight with their cash.
The BOD also has an incredible amount of skin in the game for a small Co like this. Not just JFW and family, but others who aren't part of the nepotism.
Just some things that have been bugging me a little.
Perhaps they did include the unused facility in their figure of net debt, but as it wasn’t being used at the year end, that would clearly be incorrect. Surprised the auditors didn’t pick up the discrepancy.
However, overall what matters most to me is that I feel reassured, having reviewed the accounts, that the company does not need to perform particularly well in 2020/21 to keep its head above water.
A profit of some kind would be nice, of course, and in view of Covid would represent a creditable performance, but with market cap of about £10M, and net debt around £5m, gearing seems very reasonable, and does not pose a significant threat to the company's continuance.
If the company exceeds expectations by even a modest amount, this SP is back above 50p. Good Smart Breakdown numbers from the AA when they report in a month's time would certainly help...
what is the yr on yr movement in trade rec
and trade pay ???
"Looking at the 2019 accounts, the net debt figure was also overstated there: it should have been around £5.1m, not £5.6m."
I wonder if they are or were maxed out on their revolving credit facility of £.5m at the time of reporting? Or if not maxed out, just reporting a figure that includes it?
i think more widely we need to consider the wider context.
you can look have four years revenue and cost and it looks like the business is generally on a path back to growth.
then consider we have are going through the worst crisis since the second world war, yet despite this the business is not going bust from the information provided and is actually growing on a profitable basis.
the i think board costs came in at £1.7m so lets assume they can make £2 to 3m this year. If i am Raza there is £1.7m of cost to come straight out.
probably then find another 2m cost opp from a merger.
easily becomes a £5m to £10m earnings opp when you look forward to 21/22. time flies
price hilding nicely about the 20's and remember overall cash will be heading back to equities at some point.
Thanks....
Looking at the 2019 accounts, the net debt figure was also overstated there: it should have been around £5.1m, not £5.6m.
So it is true that the net debt figure was unchanged during y/e 31.3.20, but in both 2019 and 2020 it was actually lower than reported by around £0.4 or £0.5m.
dc2 - I also read it carefully, in particular to check on debt and cash.
CBILS
The rules include: “If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so”.
So Trak must have been adjudged by HSBC to be not badly enough affected by Covid to warrant a CBILS. On the face of it, a positive, but at the same time a great pity, because Trak has thereby missed out on up to a £5m loan, interest-free for 12 months.
FURLOUGH SCHEME
“There’s talk about abuse of the furlough scheme”. No more than any other company, I dare say. Just spiteful gossip.
NET DEBT
I agree that £6.9m is the total of bank loans. Net debt is after deducting cash of £1.7m, which gives a figure of £5.2m.
The Annual Report states that net debt is £5.6m, so it looks like Trak have failed to take credit for a £0.4m net debt reduction during the year. However, net debt is just a memorandum figure, ie does not appear in the B/S, so does not tie in with anything else, and is therefore easy to get wrong. I feel inclined to write to the FD and ask for clarification.
By the way, this £5.6m is not the same figure as the £5.6m under “Borrowings” in the B/S: this latter figure is the non-current portion of the loans, and furthermore is not net of any cash. So the equality of the figures is pure coincidence.
The good news is that the cash figure of £1.7m looks pukka, and is definitely not flattered by any Covid deferrals of VAT or PAYE, because the cash benefit of such deferrals would not come until after the B/S date anyway, ie at the time that these year-end liabilities would normally fall due for payment.
Thanks to KBYK for pointing the report out, a 92 page light read.....(no I did not)
I am no accountant. I was interested in the debt. It is stated that it is the same as last year. However, I see £4.5m (£4.4m), £1.5m (£0) and £0.9m (£1.8m) which looks like an increase to me (£6.9m vs stated £5.6m). Page 13. Where did I go wrong?
Page 73 gives the interest charges (per annum). I must admit I thought the new £1.5m loan would be cheap but it is 8%.
Still related to debt, in some better news they have agreed to defer all payments for HSBC and MEIF until 2021 (page 29). The upside is no loan payments to be made for the next circa 12 months. The downside is they will accrue interest.
Personally I am unsure why they did not use the CBILS loan. It is possible that this may have invalidated some of the covenants. Any ideas?
Finally, there is talk about Trakm8's abuse of the furlough scheme. Page 22 clearly states they continue to communicate and train people who are furloughed. I have checked and this is legal.
There is lots of encouraging stuff through-out and their forecasts (I know they are not giving guidance) assumes a more pessimistic view of the impact of COVID ( page 57). I.e The assumption that the attrition rate of fleet will increase from the usual 10% to 20%. (page 9)