TW article just released24 May 2019 11:37
And so having promised us 2018 sales of £7.2 million and an EBITDA profit on January 29, simply to get a bailout placing away on February 8, the ghastly truth now emerges. Westminster’s (WSG) 2018 results are shite and bar an accounting fudge they would have shown the group as insolvent. Let me explain.
Sales were up from £5.4 million to just £6.7 million as half a bar of orders that loathsome pig of a chairman Tony Baldry of 3DM infamy had thought were shipped in December when issuing the 29 January trading statement were not shipped, something the ex Tory MP only fessed up to this week. So much for timely disclosure. AIM Rules are for little people eh Tone?
The promised EBITDA profit thus became a £380,000 loss. But that is bull***it earnings. The loss before tax was £1.4 million. The cashburn from operations was a stonking £1.6 million. Surely the swine Baldry knew that on January 29 but did not say it because it would have given the game away about how close to insolvency the company was. He wanted to pump the shares pre placing not to give a full and fair presentation of how bad things were.
Gross margins were down, customers took and extra 5 days to pay bills and as such we saw that the balance sheet was in tatters at the year end. Cash was just £290,000, Current assets were boosted by a massive increase in receivables which, I think, is balanced by a massive increase in deferred income on the other side of the balance sheet. But as trade payables soared ( the only thing that can happen when you have no cash) , net current assets ended the year at just £31,000. And as at December 31 the company also had debts ( on which it pays 15% interest) of c £2.3 million repayable within 12 months ( I June 2019) so that would have seen net current assets massively nebgative.
Luckily, for that in a cash burning company would be an indication of insolvency, two days ago the company announced a deferral of the repayment of those borro2wings by another year. So, hey presto, they become a long term ,liability and net current assets stayed (just) positive.
In February the company raised a bailout £500,000 gross ( call it £450,000 net). We are told Q1 revenues and orders are ahead of biudget but the fact that we are NOT given any indication on profitability makes me sure that the business is and was still burning cash. And thus I suggest that the £500,000 is almost gone or at least that, as of today, net current assets are only just positive.
A bull of the stock points out that the auditors have said that Westminster has enough working capital for 12 months. That will be based on reassurrances by the loathsome Baldry. You will note that the auditors gave the same sign off in may 2018 and within 8 months a rescue placing was needed. You can bet the ranch Westminster is itching to place again as it needs the cash.
This is the curse of Baldry. At 6.9p mid keep selling
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