RE: Buy- Hold - Sell28 Feb 2021 13:51
Danl, i do not accept EBITDA as a true measure of a companies worth. It is an accounting measure used to gloss up the books. A better measure is pure profit. Without getting too intricate with the numbers, CFs profits have been falling steadily for the last 5 years or so from £100m+ in 2015/16, down to just over £50m pre covid. The SP has fallen at an even more dramatic rate from a high of @400,down to @100 just before Covid hit. It then plummeted like most shares did hitting a low of 22p. It has hovered generally in the range 35-50 for most of the pandemic. Various highs & lows. There is lots of talk about where the SP may go in the future but there is really no reason why the pre covid trend will not continue, (trend is your friend as the saying goes!). As Scorpion has stated a lot of business has been swallowed up by online competition & there will be the large debt & lease liabilities to deal with. These factors will have not escaped the attention of the bankers/backers & i would expect part of their negotiations would be a restructure of the business moving forward. Sunak's business grants may provide short term relief for sure but will not replace the need for refinancing. It will be interesting where they decide to go here but i suspect a decision will only be announced when new CEO comes in which is 8th March i believe.