Member Info for Scoobydoo321

Reuters

London, Sept 8 - Doorstep lender International
Personal Finance said on Tuesday there is a "material
uncertainty" around its ability to continue as a going concern
after posting a loss and given the upcoming maturity of a
eurobond.

The UK-listed firm, which operates primarily in Central and
Eastern Europe and Mexico, posted a pretax loss of 53.3 million
pounds ($70.05 million) in the first half of 2020 after COVID-19
hampered its ability to collect loan repayments and forced it to
significantly tighten its lending criteria.

The company said its collections have now improved and it is
implementing a strategy to rebuild its business.

However, it has near-term funding issues with a 397 million
euro ($469.13 million) eurobond due to mature in April 2021 and
a need to renegotiate the terms of some of its loans.
"The need to refinance the 2021 Eurobond and obtain covenant
amendments create a material uncertainty surrounding going
concern," the company said.

GOING CONCERN RISK

Im an accountant.

Going concern risks - From the web -
The going concern principle is the assumption that an entity will remain in business for the foreseeable future.
If there are going concern risks - this infers there is risk of the entity potentially NOT continuing as a going concern. Good luck guys!

Trading to the 31 July 2020 is ahead of last year, which has enabled the Group to absorb the increased costs and risks associated with the pandemic.

That's a very positive statement. i.e. Costs down + Sales Up, likely profits up - no signs of finding positives where positives can be found :) ...positives were evident

Last Sentence that is very relevant:

Covid-19 statement



Whilst the Company has faced a number of challenges since the outbreak of Covid-19 and has incurred significant costs associated with managing the risks associated with Covid-19, it has also found opportunity to deliver product types currently in demand by consumers, industry and Health Care providers. In particular, the Company has been able to introduce its new Pure Touch brand of hand sanitisers and hand washes, available through all channels of distribution that require and need anti-viral hygiene products; and a newly developed anti-viral alcohol-free hand cream. Trading to the 31 July 2020 is ahead of last year, which has enabled the Group to absorb the increased costs and risks associated with the pandemic.

Sorry orderbook for FY 2021 I meant below

Hats off to them and great company. What I'm mystified about is that the CEO + CFO has already mentioned on a number of times in the most recent investors' presentation that the company will be "consolidating", increasing capex. The CEO further mentioned that the orderbook, given big pharmas' attention is away from their usual drug trials, will not be as large as this FY (or words to that extent).

This indicates that the late buyers of the share on Thurs + Fri must have super confidence in the long term when the FY 2021 is expected to be somewhat subdued due to C19 impacting on the order books. Of course, this does not mean that the future is not bright, since the CEO did mention the orders would be pushed back later into FY 2022.

but
@23/218 SP 77p
@ 14/8/20 47p
No. of shares 2018 - 27mn
No. of shares AFTER recent placement 37mn
with continued dilution and
lack of FCF
how will they ever get there???

- Even Boris has come out to state 2nd National Lockdown will not happen - impact on economy too devastating.

- If regional lockdown, e.g. leicester, shops were allowed to open.
So jewelry retail suffers? Yes
Gold purchasing suffers? No - thrives more in lockdown (less employment / no furlough scheme - where do you get fast cash from? Ans - sell your gold)
Forex suffers - yes - but was only 8% of total GP in the 1st place (8% included other services including meony remittance) Pawnbroking suffers? No - thrives in lockdown
Existing Loans collection suffers? Yes likely - to what extent? On par with all other unsecured lenders.
New Loans issuance suffers? No but higher prudency
Overall, come Autumn, given higher redundancies (sadly), termination of furlough scheme, high unemployment - more people are likely to pawn their stuff and sell their gold.
Hence pawnbrokers more likely to thrive.

Not being dismissive, w.r.t FCA investigation, Simon Thompson has already commented in IC that the high interest short term loan interest element of HAT's loan portfolio is small , therefore market's reaction (late 2019) to FCA's enquiry likely to be over-reaction.

Current SP of 300-310p appears to be support level. If falls through this, it would be levels seen in late April - which is highly unlikely. DYOR.