We would love to hear your thoughts about our site and services, please take our survey here.
The intangibles can be ignored. PE is irrelevant as it includes amortisation of said intangibles. I think growth in tangible equity is the best measure to value this company, although cashflow is obviously very important too. Cash flow was a shock this morning but it is stated that cash has increased since the end of H1. Liquidity isn't an issue as I see it but it probably rules out an acquisition which might be no bad thing. If the cash position hits the £9m forecast for the end of FY24, SWG is very cheap.
The overriding takeaway here seems to be that management ran the company to the brink of insolvency and are now profiting from that very mismanagement. Can you really trust them going forward? Existing shareholders might decide to suck it up but would you really want to make a new investment here, now?
Actually, I agree with you, it's too complicated for me. I sold out at the end of August as I didn't like them not including the derivatives in the profit figures and I don't regret doing so as I'm still marginally better off for it. Buffett's Olympic diving quote seems applicable here. Best of luck
If only the company talked about FCF, instead they talk of 'Adjusted cash flow from operations', which conveniently ignores certain 'exceptional' cash costs, which crop up every year.
There are so many notes to this company's financials, I wonder if anyone outside of the boardroom truly understands what's going on. P&L and balance sheets always seem to get restated. The word 'restated' appears 12 times in Tuesday's results.
£5m of Derivative financial instruments is under 'current liabilities' on the balance sheet, which means due within 12m
There is a section 'Derivative financial instruments' in yesterday's results. Changes within the business have meant that they have had to change the way some derivatives are accounted for. It's incredibly complicated and I'm not suggesting they are doing anything untoward but the headline numbers at the top of the announcement certainly don't paint the full picture and flatter what's actually going on IMO
If you have an open FX position with a CFD/spread bet provider and it is over £6m quid in the red, do you consider it 'non-cash' or is that just what you tell your wife? Sooner or later you need to pay up.
They are losing a fortune (of real money) on derivatives and the are not including them in the numbers. It's deliberately misleading IMO. Compare the loss figure in the 2021 preliminary results to the figure in the annual report and tell me it's not a bit fishy...
Worth pointing out that the buyback has reduced the share count by 7.2%. This means that despite the dividend per share being increased from 0.75p to 0.80p, the company will actually pay out less than last year. Buying back stock at this point in the economic cycle actually makes a lot of sense and is preferable to dividend payments IMO