The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Its late in the day to be moving the goal posts. In particular I don't like the line "The terms of the loan notes and security are to be agreed in advance of the general meeting referred to below." Those terms could hypothetically lead to a material change in the quality of this deal. Get the feeling VLK are desperate and the buyer is starting to realise this. What next then? RNS Announcing the deal is now for a total consideration of $12 million or some other lesser figure. I hope I'm wrong but I've halved my position size and taken some healthy profits at 16.5p.
I've got high hopes for XLM. Overweight here going in to the new year. Have a feeling somethings cooking. The margins in the publishing side are fantastic and they seem to be perfecting this particular niche. My other conviction holdings in order are PAYS, RCN, VLK, CVR. I predict a game changing year ahead for all these 5
Yes indeed. Given this a lot of thought today and have decided to rebuy the half I sold. The more I think about it the more 88p seems a decent entry once again with the risk skewed to the upside. Really need to stop watching this share price as it has had me captivated for best part of a month! Happy with my holding for now. Initial target from here is 115p and will review when we approach that mark.
Cont.... Despite these adjustments the Group's restated net debt position as at these dates was not representative of the underlying position as although technically correct from an accounting perspective, there was significant stretching of creditor payments in particular around operating cost items. The average month end net debt position over the eight month period to 30 November 2016 was £42.0 million and better reflects the Group's underlying net debt position over the period. Dividend: Unsurprisingly, the Board has resolved not to pay a dividend. Bank support: Banks have given covenant waivers for prior periods, and are discussing future covenant levels. They are said to remain supportive! My opinion: I've managed to work my way through most of this announcement, but it's slow work. As I said, things get complicated in a situation like this! Even those on the inside will have found it very difficult. The RNS says that "a level of judgement has been applied" - in other words, there is no objective answer to fixing what has gone wrong. On valuation, I'm a bit perplexed as to why the market cap remains so high. The current share price gives it an enterprise value of £166 million, for a fairly mature business which made a multi-million pound operating loss last year, has only scraped a tiny statutory profit over the last six months, and is going to suffer a lot more short-term costs and headaches associated with these accounting mistakes. Even if the adjusted EBITDA was £9.1 million for the latest period, I'd have no interest in paying anything remotely resembling a normal earnings multiple for this. For me, the share price is still about double what I'd consider to be fair value. When the dust settles, perhaps it will make a good case study for clues or red flags for spotting accounting problems.
Interesting article from SCVR on Stockopedia from Dec 23rd... This technology services provider has been at the centre of an accounting misstatement issue, as discussed by Paul here. I also recommend this article by Mark Bentley at ShareSoc. Today's H1 2017 results are quite positive on the operational side The financials are a lot more mixed, however.... Accounting problems tend to affect public valuations in a dramatic way. This is largely to do with questions around integrity but also because they make the act of valuation itself far more complicated. For example, today's announcement includes restated H1 2016 figures, which need to be compared with the original figures as published here. Here's a selection from today's results: Revenue up 2.0% to £53.0m (H1 FY16 restated: £51.9m) Adjusted EBITDA* up 16.6% to £9.1m (H1 FY16 restated: £7.8m) Statutory profit before tax £0.3m (H1 FY16 restated: £2.5m loss) Net debt £34.4m (31 March 2016 restated: £37.8m) And here are the effects of the restatements for the year ended March 2016: Revenue restated at £103.3m vs £109.5m (reduction of £6.2m) Adjusted EBITDA* restated at £13.0m vs £25.8m (reduction of £12.8m) Statutory operating loss restated at £4.4m vs a profit of £8.4m (reduction of £12.8m) Statutory loss after tax restated at £5.2m vs a profit of £5.2m (reduction of £10.4m) For me, these changes make it impossible to value the company in a sensible way. We can think about applying an earnings multiple to a £5.2 million profit, but we can't do the same for a £5.2 million loss! To give credit where credit is due: despite the disastrous nature of recent events here, the company seems to have dealt with it in a very professional way. A forensic review is underway, a new CFO has been appointed, and the latest interim results have been produced, along with restated numbers, in a reasonable timeframe. An explanation of what happened: A number of accounting policies and practices, specifically those in respect of cost accrual, cost deferment and revenue recognition had been incorrectly applied and other accounting errors and misstatements had been made. To date there has been no evidence of theft and the misstatements are attributable to profit overstatement over a number of years with revenues being overstated and costs understated in broadly equal proportions. It looks as if the debt position has been manipulated: Following restatement of cash, trade creditor and trade debtor balances at 31 March 2016, net debt was £37.8 million. Net debt at 30 September 2016 was £34.4 million. Despite these adjustments the Group's restated net debt position as at these dates was not representative of the underlying position as
Yes fair comment. Just seems a lot of ifs. All the brokers have 'under review' status on RCN as they have been waiting for today's results. Be interesting to hear their considered thoughts. In my eyes all things considered and with one eye on the debt pile, the price seems about up with events for now. Need to see some evidence of an improvement in cash conversion adding further.
When you see that in fact the company made a loss for the 12 months of 5.3 million it's quite incredible to think that MXC Capital etc got away with selling their entire holding at 180p only a few months ago. Encouraging that we are now in profit this year but it looks like a profit before tax of less than 1 million, possibly £600,000 for the 12 months to March 17.. I've decided to sell half my holding at 83.8 and book some profits. Clearly an issue converting cash into cash on the bottom line. Be very interested to see what SCSW has to say in his January newsletter. Will review remainder of my holding in new year.and the hunt begins for a new home for these profits.
Why is Profit before tax only 300,000?
Off we go! Train leaving the platform. Overhang now cleared from large seller. Should see this begin to run up and then spike higher on completion of sale of VCS. 2017 game changing for VLK
Anyone else noticed that the apparently manipulated volatilty seems to be reducing here. PAYS are using BMO Capital Markets to carry out the Buyback in a controlled anti terror strike kind of way. They will literally be picking off the shorters auto sells and taking the other side of the trade here there and everywhere. It's a great strategy in this instance and there is nothing the shorters can do about it. It tackles the shorters immoral micro autoselling strategy head on. I notice they are now beginning to reduce and I think gradual reduction will continue until they are all under the 0.5% threshold. Well done PAYS. Refreshing to see a company fight it's corner and out fox the opposition. All the charts are consolidating 350p area. Beginning to look primed for the next leg higher in the coming days/weeks.
Think about it. Redcentric was listed on the AIM Market in April 2013. It finished it's first week of trading at 85.5p. Since then it has grown exponentially and shows every sign of continuing to do so. However due to an anomaly caused by some accounting indiscretions you can currently buy the shares cheaper than you could in April 2013 at 81.5p. Always look forwards. Never look back.
Hourly, 2 hourly and 4 hourly charts now all looking primed to begin the next leg higher. If you're not in here yet now would be the time to hop on board as the train is about to leave the platform.
L2 just started looking blummin lovely again. Big buys filling it up nicely.... Here we go. Put your seat belt on!
...at these prices. Just snapped up another £2000 at 80.6p. I think if it was good enough for Coltrane at 90p+ only a week or so ago and various other II's continue to add in large swathes then can only see One Direction for RCN from here. From a charting perspective we've now pulled back to the 20dma on the hourly chart and look ready for the next kick higher as this week goes on. This will double at least in the next 12 months.
Rising star. All historical legacy issues now identified and being dealt with. 38 new sticky customers in last 6 months. Show me other companies showing such excellent growth credentials and I will show you the colour of my money.
69, 59...... tomato, tomato.
....it looks like I may have actually called the bottom. First time for everything! That deserve a gluten free Peroni!
If this were to drop sub 300p again there would be an almighty amount of buying going on. Lots of money parked and primed at the moment wondering if they'll be able to get in under the £3 mark. @GS thanks for the wise words Mr GSmiley. Haven't quite got them all in one basket, more like 5 baskets at the moment. Those being PAYS, RCN, VLK, XLM, CVR. See huge potential upside in all of these on a 12 month view. PAYS is top weight at the moment though. Percentages of my portfolio are PAYS 42% XLM 30% RCN 14% VLK 9% CVR 5%. Can only see the dollar gaining strength and approaching parity with the £ in the next 2 years which should give a good further tailwind to PAYS & XLM. God I love the stockmarket. I just need to learn to take profits. I sit there and stare at them, congratulate myself and then proceed to watch them disappear and become losses before my very eyes.
Topped up another 3k at 72.5p. Should be back at 90p soon enough once market digests recent activity and dividend hunters have moved on. I'm calling the bottom...haven't got one right yet. If MXC thought £5000000 was a good investment at 69p then 72p will do me
What makes me laugh hard and long is that people forget that BET365 is an absolutely fantastic British Company which is only going to continue to grow. 19 million customers in 200 Countries and counting... Holy Sh*t!!! http://www.igamingbusiness.com/news/bet365-we-are-not-breaking-chinese-laws-0 From Wikipedia...... Bet365 Group Ltd (styled as "bet365") is a gambling company based in the United Kingdom. Bet365 is one of the world's leading online gambling groups with over 19 million customers in almost two hundred countries. The Group employs over 3,000 people and is the largest private employer in the city of Stoke-on-Trent.[3] Speaking personally. Over all my years betting on football I have never encountered a bookie like Bet365. The mobile app is second to none. Truly global coverage of pretty much every sporting event on the planet. Put that in your pipe and smoke it Spotlight Rehash!