Member Info for KnockinOnHeavens

Alwayswrong

Let's wait and see, not enough info re nature and level of materiality to draw any meaningful conclusions. CFO's sudden sickness is suspicious, the Treasury guy was probably told what to do. Uncertainty in the coming period may be more damaging than the report itself.

KOH

Tinatots

"suppliers to companies owned by the Related Parties were paid by certain credit facility providers and, while those companies are responsible for settling the amounts payable to the credit facility providers, the contractual obligation rests with NMC, which has also provided a guarantee in the event of non-payment or default."

The NMC simply provided a contractual guarantee in case of non-payment or default in case companies owed by related parties weren't able to meet their contractual obligations to credit providers. These balances were approx $335m at the end of the year. Nothing unusual if you think about it, companies do it all the time. The only problem is that this hasn't been approved by the board and contingent liability as they call it disclosed in the notes to the accounts. Normally those disclosures give the users of the accounts an estimate of the potential financial effect and better understanding of any associated risks. This doesn't, by any means, mean that the company owes $335m. As long as the entities owed by the related parties pay their debts there is basically no financial impact. The facilities will also "no longer be made available for further supplier financing" so no future impact possible.
It could be as simple as a guarantee and support for the smaller entities with no sufficient credit rating & cash flow available in order to enable them to grow quicker & operate on the higher level. There is no mention of any defaults & inability to pay obligations by those businesses. They may as well be operating successfully and running at a profit. Obviously the guarantees should have been approved by the board & disclosed in accordance with the Listing Rules.

KOH

Mrahman20

Nope, no clue. Nobody knows. All I know is that If it drops I will consider it temporary overreaction. No real reason to panic based on content of the RNS alone and all the bad news are already included in the price IMO. All large and complex accounts have some discrepancies, nobody accounts for every penny where there are billions involved. Time consuming and pointless. That's why you have the concept of materiality. Unfortunately during the detailed reviews things like that emerge and can contribute to panic but until we know the nature and level of materiality there is really nothing to worry about. The deck is being cleared and heads are rolling which I consider a very good sign. Had to be done and there is no nice way to do it. The sooner the better. IMO.

KOH

No probs, pione3r

KOH

This was a ftse100 company that has mislead investors. Aren't the auditors supposed to give confidence in the accounts? Are they not liable here now that the truth is coming out?
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They are not. Read my post at 20:22 today.

KOH

It has everything to do with p&l. It's likely we have a debt to put on balance sheet and a cost to put in p&l to balance it. Also you conveniently forgot in an earlier post to mention that cash is screwed and the treasury idiots have been deliberately misposting the bank balance.
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There is no double entry for contingent liabilities, genius. There is simply a missing disclosure note in the notes to the accounts normally giving the users an estimate of the potential financial effect. Not enough info regarding any associated cost to P&L(if any) either. You have no clue about the nature and level of materiality of the discrepancies between the ledger and cash balances, you are speculating.

KOH

FIN has been caught in the middle of the perfect storm. That's it. Cyber attack, NMC, coronavirus, share pledge news. Everything in a few weeks period. Now cyber attack is gone, NMC is being sorted, coronavirus is temporary. Share pledges are nothing unusual in today's business. If anything, Shetty will lose (or already lost) personally, not the company. If the books are not cooked (and why would they be) and 183m EBITDA figure in the first 9 months is correct, this has to re-rate at some point. Huge buying opportunities at these levels IMO.

KOH

Cash position issue is very worrying, it will be a triple whammy if debt is much higher than stated, cash much lower than stated and profits much lower than stated. All hell will break loose from many angles
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You are confusing balance sheet and profit & loss items. Debt & cash has nothing to do with profits.

KOH

The Committee and the Review Advisers are investigating these matters and seeking to determine the materiality of the discrepancies." How the company's auditors did not pick this us is amazing!
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Auditors don't guarantee that the financial statements are 100% correct & error / fraud free, they provide a certain level of assurance based on the samples tested. They don't check every transaction. The key word in that sentence is "materiality", this is noting unusual to have discrepancies in the accounts especially in the large companies. Again, materiality is the key. If if it's less than 1-2% of the total assets, 0.5%-1% of total revenue or 5-10% of profit before tax it would be considered immaterial and auditor's opinion wouldn't even have to be modified. That 335m is not automatically owed, it was just a guarantee in case of non-payment, and "the facilities will no longer be made available for further supplier financing with the aim that the relevant balances should be unwound in line with existing terms". CEO got sacked, clearing the deck continues. Heads have to roll. Good. The sooner the better. This can only be a good thing in the long run. Accounts have to be delayed by default, and trust me when they are published they will be correct. All that nonsense is already included in the price anyway. Market may overreact as it always does but this won't last forever.

KOH

Last year accounts gave the "true and fair view" according to Ernst Young auditors. FIN drop is hugely overdone. It should never have dropped below 100p even including all the factors. Market overreacted. Shetty knows he needs to clear his name. Employed professionals, employed Freeh, NMC clearing the board. That's exactly what they should be doing. The sooner the better. Whatever it takes. Extended uncertainty creates much more damage than the bad news. In the meantime Travelex is back and running. Coronavirus is temporary. All the viruses are. Seasonal like flu and subside in the summer. Media add to panic instead of informing that the vast majority fully recovers and those who die are either really old or already had respiratory problems. Meanwhile at FIN 183m EBITDA in the first 9 months and almost guaranteed solid results in the last quarter (cyber attack & coronavirus happend after Christmas) + expanding brands. Full accounts around mid April. All the extremely negative scenarios are basically included in the current price. Amazing buying opportunities at these levels if one's willing to wait a while.

KOH

Let's not jump to conclusions. This actually can be a good sign. The sooner this will be cleared it up, the better. I'd rather have that now and the governance issues sorted asap than constant suspicions & damaging period of never ending uncertainty. That's exactly what they should be doing.

KOH

Yup, Saudi market is booming. Plenty of money around, young population. Great place to be for a digital payment provider.

KOH

Finablr network brand BayanPay – a Saudi based digital payments firm – has been awarded a payment services provider licence by the Saudi Arabian Monetary Authority (SAMA), allowing it to offer digital wallets, e-commerce and SME business payment products in the kingdom.

https://www.arabianbusiness.com/banking-finance/441229-finablr-eyes-saudi-expansion-after-bayanpay-licence-announcement

KOH

The whole FTSE is panicking today - coronavirus saga continues.....Great buying opportunities everywhere.

KOH

Yup, I've seen it. Great news.

KOH

whether*

no real reason for a strong rise
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No real reason for a fall either. Wether in 70s or 80s it is still hugely undervalued. Should never have dropped below 100p, really. It will fly on news & more clarity.

KOH

Top riser in the whole FTSE250 today - up over 5% while the whole index is 3% down.
Well done Finablr.

KOH

500p haha what a load of.....Clearly doing their best to drag it down, bringing some old scandals etc. If you search long enough you can connect just about anything and anybody...

KOH

Who are 'they'?

KOH