Why so bad19 Mar 2024 11:30
On the face of it the original company rns seemed to be saying we have a few short term issues with claims but we'll recover because most of those are spurious. But having read and re-read what the company said in totality this share price fall cannot just be down to that. So what is the problem and what is the market pricing in here? My view is that the company is saying it cannot grow its business charging what it charges at present. (Customer number history bears that out)That in order to grow the business it needs to be more competitive (ie charge lower rates of interest, thereby affecting it's annual income) and then increase its customer numbers (ie obtain a greater market share) to get profit back to where it was or better. The market does not know if that can be done and if not there is not really a business here because the overhead is quite high looking at it. The share price has been falling reasonable consistently for years and was at one point over £20 and is now less than 50 pence. The company mentions consensus estimates averaged out, but they are market estimates not its own and have been not very accurate in the past. What does materially lower mean in practice? We don't know. What does the company expect profit to be in 2024 and 2025? We don't know. Does it expect to make a profit? Will the company successfully increase its market share? We don't know. Too may unknowns, outcome uncertain future uncertain is my take. Happy to be shot down in flames if I've got this wrong in part or in whole, Wondering what the forum thinks?
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