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I see that in the SYME Audit Committee report, the FInancial Reporting Council, the U.K. top regulator for determining whether company results are in compliance with IFRS aren’t convinced that SYMEs reputed IM solution will actually work and they have seen the Big 4 accounting advice.

Awkward

Quigerrs
You don’t calculate a diluted loss per share under IFRS rules.

Lex
Results are absolutely dire.
There is a material uncertainty over going concern in basis of preparation .
Tradeflow goodwill was impaired by £800,000 - it remains loss making and sub scale so £31 million valuation was complete rubbish to spoof investors.

Napalm
Even if there is no legal repurchase requirement, I still think there are two big hurdles to overcome for SYME to recognise a sale.

One is in the IFRS Framework which basically states look at the economic substance of arrangements not the narrow legal form. In substance SYME is providing finance via the SPVs who will only ever take possession of inventory in event of seller default. The fact that SPV don’t pay normal sales price, retain a 15% cash buffer and will resale back to customer at notice further supports that view.

Second is the requirements of IFRS 15 and the hurdles required to book a sale in respect of consignment stock as set out in basis for conclusions paragraph B85. SYME own website makes it clear that customers can continue making the inventory to existing customers thus failing one of the criteria in this paragraph B85 to recognise a sale on consignment stock.

There is a reason why after 25 months of boasting about this innovative new concept it has not taken off or been copied by a rival (I don’t buy the valuable IP argument) is that it don’t it isn’t a viable solution.

Even if SYME gets past existing rules both the IASB and FASB (the accounting standard setters for most of the world) are looking closely at enhancing disclosures around supply chain given collapse of Carillion and Greensill.

That is why I have concluded SYME USP is a dead duck.

Napalm
I am of the view that SYME will never get off the ground beside the accounting issue I have highlighted there are also challenges over
Financial soundness of SYME as platform servicer what happens if runs out of money to the mangement of the SPV
Governance concerns over SYME as Board has no chair and majority of exec Directors
SYME has no scale versus rivals in adjacent space like Taulia and Eliant nor any significant financial and people resources
Poor track record of execution

In the Prospectus it states that SYME buys inventory at cost typically less a 15% discount to market value and 15% of consideration is held back by the SPV as a buffer for risk.

So day 1 the vendor gets only 85% of cost price of inventory. So interesting true sale accounting where consideration receivable is 85% of cost of product. There is also massive moral hazard in this product for customers trying to book sales to SPVs in advance of real sales. SYME also has risk that I sell it obsolete inventory at 85% of cost and then walk away. Ignoring these points for a moment.

I am prepared to believe that there are no contractual repurchase clauses. If there is SYME customer could have a lease or derivative contract depending upon the contractual terms which would appear on customers balance sheet.

A major challenge for me assuming SYME can get past the IFRS general principal that accounting transactions should reflect their economic substance rather narrow legal form (see IFRS basis for concussions) is IFRS 15 rules on when you can recognise sales on consignment stock. These require customer to have valid reasons why customer doesn’t want the inventory delivered. One of the requirements is that the customer isn’t able to sign the customer stock to another customer but holds it solely for use by SYME SPVs- For me this is where the SYME true sale fails because SYME clearly state that customers are expected to sell the inventory to normal customers. If Napalm wants to look it up it’s in IFR 15 basis for conclusions on consignment stock.around para b83 from memory

Anyone with a proper accounting qualification should be able to verify what I have cited above.

Well run companies notify investors of the day results will be published because they have analysts and investors to brief.

The lower end of Standard List and AIM typically don’t and typically drag out publication in hope that some good news turns up.

We should know in next 4 trading days whether it’s another delay or not.

Topps has served up a pretty positive update.

Strong sales growth, resilient margins and cutting store base down saving money without losing two many sales.

Next year could be tougher though

I will hold for now to recover loss position but confident that Topps will trade through tougher times

LEBC one of the larger holdings just sold a 100% sub to Tavistock TAVI for £3 million in cash payable in two instalments.

Should enable LEBC to pay back some of its BP Marsh loan.

Castle you mean the poster who has a mate with a Bloomberg screen?

I agree I think that he is trading the share and taking advantage of long term holders who don’t understand how the nature of the market at the lower end of Standard List and AIM by posting misleading statements like the long discredited broker forecast.

Castle2012
Care to explain how the day traders make money on the spread? I thought that for traders the bid offer spread was a cost and that the brokers made their money on the bid offer spread. I think you mean traders make money on share price volatility?

Ex

If SYME did insert a contractual repayment right within its sale agreement then under IFRS 15 this would trigger accounting requirements depending on the repurchase price.

Trafigura the Singapore commodity giant achieved an inventory monetisation but because of repurchase clause stated it was forced to recognise a liability for cash received.

Not having no contractual repurchase clause creates risk for the SPV if an unscrupulous company sells it inventory that is hard to sell for instance inventory which has been or is about to be superseded by an upgraded model.

Hughez87. Amazing ramping the RNS reach announcement I.e. not financial significant announcement by SYME that Tradeflow note was going to be listed on a tiny start up fund platform.

Still it help sell a few more Mercator shares I suppose.

The San Paolo stake even states multiple portfolios I.e it a nominee holding and a small one at that for a large institution.

Look at the size of Halifax stake, it’s a subsidiary of Lloyds Bank - cue more ramping LOL. I know it says Halifax share dealing and thus PIs by why let the facts get in the way of another ludicrous ramp?

Peak

Whilst Hughez87 mate is checking out the Bloomberg screen holdings I wonder if he can spot any of the new investors that you claim that Venus Capital syndicated the initial 2.77 billion and the subsequent 550 million shares to?

Perhaps there were more than 25 of them and each bought less than intesa Sanpaulo 127 million shares so it isn’t obvious who they are?

The grim reality is that the Intesa stake is an institutional nominee holding and Venus is a convertible loan note provider..

Hughez87
The figures aren’t spot on. There are simply wrong.

SYME paid £4 million in cash plus 813 million shares as initial consideration. They didn’t pay £31 million at that stage.

I hope you haven’t persuaded anybody to buy with this blatantly inaccurate ramp.

They still have deferred consideration to pay in cash or shares at SYME’s option.

Hughez87
Your calculations of Tradeflow breakeven price are completely wrong as you are deliberately ignoring the contingent consideration that is payable.

A really stupid ramp attempt.

Year end accounts and strategy update promised by end of this month.

Year end accounts should have commentary on IM and future prospects.

Holders now suggesting that there is no TR1 because it was a syndication.

Shame then that the RNS only referred to one Investor Venus and not a syndicate of investors.

I note that previous RNS where there was more than one investor referred to 5 investors.

Let’s ignore all the delays and red flags and put a positive spin on every announcement.

Are holders really thinking are to misquote Britney Spears AZ give me a sign dilute me one last time

Peak

It’s not my remit to encourage people to buy either, quite the opposite in fact.

I trust my research and you can trust yours.

Regards