Member Info for Velo

Erratum.

Had to happen. Small adding up error. Just trying to post an easy to remember number for next Thursday morning and realised although the amounts are correct, I typed the total incorrectly.
Q3 forecasts are exactly that for the third quarter forecast in isolation. However it's a convention that BT only ever reports the running totals, so just want to restate and round them off.

The brokerage houses analysts Q3 NET PROFIT added to H1 Net Profit comes to a full 9 months running total of £1,525m in other words £1.525B
- (I had added incorrectly posted down there of £1.4275B)

So all anyone has to remember is that if BT shows just £1,500m+odd Net Profit, then they've met market expectations and no dirty surprises. And that would be all good and acceptable.

The achievements in Q1 + Q2 (H1) so far by BT, suggests to me, they may well come in with much higher (added that correctly at least :) and that is circa £1,621m (£1.6B+odd) Net Profit.

And there it is:
£1,500m+odd Net Profit to not upset the market; the analysts forecast for 9 months running total.

- but I think BT will smash it and bring in £1,600m+odd Net Profit, which should start to get noticed.

Anyway - enough of my down beat you can't win cos' they won't let you, ranting. Trading update next week - I'm looking forward to it :) I think some media analysts might break from the herd with a more encouraging outlook after the results are bandied about a bit. Would bring more balance in to play.

Thanks Healy'.

Also there were numerous further foreign business sell off's, some in latin America I think, mid year to raide cash to reduce debt, before I logged off after posting on H1.

So if loss making, that would immediately cause the increase in net profit from being absorbed by speculatrive loss making ventures abroad. It's a possible reason for net profit flowering year after future year without fail whilst all around decreases. Maybe the analysts think what happens when there's no loss making drains upon the net profit to sell off any more?

That would be a cause to ignore the gallant net profit in the future years trouncing this years and all previoius years net profit.

Concludes -

It's very telling that a mistake has been made in the Q4 folder in that link and future years are deleted all but for next year - but not in the Dec 13th Q3 folder, which shows net profit increasing at an astonishing rate for several years to come and into the future.

I can list all the future years up for you but would encourage you to mosey around the forecasts and get a feel for them, rather than rely on a poster who might make a mistake.

In other words: I smell a rat. Bias - or worse!
Terrible low forecasts easily beaten by BT - yet no reward by "the market" ie., the analysts - What the hell is going on?

I'm open to reasonable innocent explanations to myconundrum.

Hi Aus,
Yes, I think we are both on the same page but you threw me for a moment there with your first para.

By "quarter on quarter" I hope you meant quarter after quarter etc.,

Also by "not corrected themselves" sort of. They're allowed to be within say 5% or so of error in accuracy without apologising, after all no one is Nostradamus or has the power of prophecy - but they defo should be in the same ballpark as a weather forecaster, forecasting rain etc., if they can't do that they're failing in their core job.

I don't think they are failing; if this 3rd quarter goes the same way and BT destroys them, then IMO some sort bias is afoot.

Usually and you'll know this next bit, should a company BEAT the analysts forecasts the stock price gets rewarded with an upgrade in the SP. AND nothing is more important than earnings - it's the core metric to every stock market successful system by every well known guru of legend who's ever lived. Twice BT's earnings have exceeded the forecasts this current year - but nothing in the SP!

You could say yes but with continued decline year after year in revenue there's a compromise to be made plus heavy pension deficit to make up and new on the scene this year a big jump in debt. I can buy in to that. What I can't buy into is catching them out with their full 12 months net profit forecast!

I too started with a full years forecast and broke it down to even quarters. So, I'm looking for and expect BT to deliver over £2B++ and the past 2 quarters gives me every confidence BT is on course to deliver that.

Now look at the analysts quarterly forecasts. Early last year they were showing £1.9B for the full year which would be a catastrophe for BT as that would be every meaningful metric down the Shute to last year.

So if you divide that by 4 yes you're going to get sub £500m net profit forecasts. So all in accord there. But shock! Horror! Look at their full year forecast for the current year that ends in a few months time. They're showing £2.039B mean and £2.020 median so /by 2 and that's a quotable £2.0295B

Now given that as their forecast why-O-why have they produced (now 3) forecasts all well below sub £500m in the £400m's? Why would you do that to burden yourself with a Guinness book of records finish in the Q4 to deliver £2b+?

Just doesn't make sense, particularly as I checked (a year or two only) and BT is non-cyclical and produces even quarters performances. Where is the record breaking Q4 performance going to come from?

It's very telling that a mistake has been made in the Q4 folder in that link and future years are deleted - but not in the Dec 13th Q3 folder, which shows net profit increasing at an astonishing rate for several years to come. I can list all the future years up for you but would encourage you to mosey around the forecasts and get a feel for them, rather than rely on a poster who might make a mistake CONTINUES>>>

"...For that £2B to happen they HAVE to forecast over £600m just to meet their full year forecast. Unlikely IMO..."

For full clarification that part would be improved if I'd added " in Q4" ie.,

"...For that £2B to happen they HAVE to forecast over £600m IN Q4 just to meet their full year forecast. Unlikely IMO.."

(Concludes)

Now here's the kicker and what this post has been leading up to. Guess what the consensus analysts forecast is for the full year? Only £2.0295B !
- Yet all last year and now their Q3, they've been putting out £400m and odd.
For that £2B to happen they HAVE to forecast over £600m just to meet their full year forecast. Unlikely IMO.

So, the question remains, why have they kept on underestimating for the past 2 quarters and look highly likely to do the same for Q3 whilst my early last year of looking for a £2B+ Net profit is agreed by them in their full 12 month forecast ???

One has to ask what motivation have they to continually underestimate in the face of BT continually delivering seriously higher net profits each quarter?

Is Net profit not following the bearish 'narrative' imposed (planned) upon it?

PS. I have the full year Net Profit as £2.175B which is an INCREASE on last year's Net Profit of £2.159B. Just say that comes in near enough, how will the market spin that? Bearishly based on current experience.

PPS. For the next 2 years even those under-estimating analysts are showing Y-O-Y INCREASES in Net Profit. What's going on? Why aren't the media analysts picking up on that as a side bar mention?

I'll start with the how I really want to end (About Net Profit forecasts)..

In house broker's analysts latest consensus is for Q3 Net Profit is to come in with a paltry £457m (That's the mean and the median added and divided by 2 to get a single figure (an average of the averages if you like :)

It's all on BT's site right now, right here, the very latest Q3 forecast (Ignore Q4 it's a Q3 double post by them) -

https://www.btplc.com/Sharesandperformance/Financialreportingandnews/Latestconsensus/Modules/Archive/Q32019-20/BTGroupconsensus131219.pdf

----------------------------------------
(Part 1 of 2) I'm looking towards almost triple figures higher than theirs at circa £553m in NET PROFIT.

This current quest I'm on, goes way back to before Q1 and that infamous £1 forecast by a media analyst after the consensus forecast was released and subsequently drove the SP down to intraday at 157/158 closing at 160p area last year.

I had much different expectations but was uneasy as FCFlow had taken a hit so long termers may recall me requesting analysts links on anything FCF mentioned on BT and one from the US site Alpha made it all clear. But since those days BT's FCF is once again magnificent so all media analysts forecasts based on the low net profit forecasts AND a ruined FCF are now null and void. So all that remains is the wilfully, obviously under estimated net profit forecasts.

Recap:

Q1 Net profit forecast by Consensus analysts (21 of them) was for £445m

They were well under as BT reported £505m

Q2 Net profit forecast by Consensus analysts (21 of them) was £486m

Again analysts were seriously underestimating as BT reported £563m !!!

H1 reported by BT was those 2 actuals of £1.068B

Which meant I felt back on track for £2B+plus in Net Profit, as analysts consensus was at that time showing as £1.9b odd.

Now after 2 serious misses by the analysts which fed through to the media with consequences for the SP don't you think they would now have a better handle on net profit expectations and offer a more realistic forecast for next Thursdays Q3 results? Well, let's see:

Analysts consensus forecast for Q3 is, yet another lousy "4" starting figure of £457m. (BT is not cyclical; there are no seasons, quarters are much of a muchness over the years).

So you have actual audited H1 NET PROFIT in the bag of £1.068B
Now add on the analysts forecast to get the 9 month figure (as that is what BT will report) and they are saying for 9 months expect £1.427.5B next Thursday.

Here's mine - H1 + Q3 of £553M = 9 months Net Profit to come in circa £1.621B
(For reference, Last year's 9 months Net Profit was £1.646B )

Now here's the kicker and what this post has been leading up to. Guess what the consensus analysts forecast is for the full year? Only £2.0295B !
- Yet all last year and now their Q3, they've been putting out £400m and odd.
For that £2B to happen they HAVE to forecast over £600m just to meet their full

Start at - Oh where's that "h" gone? Just a mo' bash it back on the keyboard and type the heasding again

"especially Velo who would burn the midnight oil producing 3 pages worth notes in an attempt to.."

Ha! Exactly what I'm on right now LOL! :)

Deciding on what to omit (it's all in me head at the mo') to make this year, a year of more shorter, succinct posts.

Poor Analysts consesus released on 4th Dec '19 and 13th Dec '19 appertaining to expected Q3. I think they're well underestimated yet again - for the third time!

Now they've jumped ahead and have the Q4 out - released on the 13th Jan, and once again poor. That's what's been gping on behind the scenes whilst the SP goes on one of it's charecteristic visits into oversold territory.

Thing is - the consensus analysts forecast for the full 12 months bears no resemblance to to each of their Qtrly releases but instead the full year fits in nicely with what I've posted all last year (+£2b net profit for full year)
(Q1 they underestimated, Q2 they underestimated by a massive 15%
- remember?)

My problem is in deciding what to leave out in the cause of attempting more succinctness. Will post MY personal expectations of the the Q3 which has been 100% mnore accurate than the analystys all last year.

Going for 3 out of 3 as I'm convinced they've got Q3 forecasts round their knickers again. We'll see next Thursday.

If what I post over the next few days proves closer to actuals once again than the analysts who are universes way more experienced than I am, then you have to wonder just what the he'll's going on.

PS. Their Q4 is underestimated too, IMO :)

Intend having a punt this time when O/Sold starts to lift out as it always does eventually.

Suddenly out of the picture for some time. Won't be posting on the results for some days or weeks even.
Tied up elsewhere. (An emergency).

In that case I'm out of options/excuses. Might as well go down with the ship, if the trading update shows net profit as increasing over the comparable period to last year, as my methodology is suggesting maybe not.

As the market brokers in-house analysts are of a consensus that profits in general will be up, and thus my opinion shown to be incorrect I will just have to take it on the chin and learn more. Tomorrow it is then.

Yes, JD is one of those companies that prefers not to reveal net profit in updates. Some do, others don't.
-------------------

I wonder if this bit:
" ....the Competition and Markets Authority which has issued the Group with an enforcement order WHICH OBLIGES US TO OPERATE the Footasylum business SEPERATELY UNTIL they have completed their review. "

taken from the Competition and Markets Authority review currently in force, turns out to be the miscalculation in the forecast of net profit being less than last year's comparable period, if all comes in to full market expectations on the day?

RE:
" I have the net profit as probaly coming in just a little less than last year's comparative period, a guesstimate as H1 was marginally down on the preceeding H1 period. "

Despite what I think and for balance - the market forecasts for net profit, as best as I can make out, are some 24/25% higher than my 'probably a little less than last year'. That's huge difference.

So THE MARKET is looking for damn good healthy increases in "profit".

I can't get on the same page as them. So I NEED to see this update to figure out why I'm out so much out of kilter to them.

"I understand we're looking for £422m profit for this past year."

Depends on what you mean by "profit". That's massively high to me. So do you mean Pre tax profit? (Probably)
Operating profit? (Unlikely)
or Gross profit? (Highly unlikely).
Net Profit? Then; no way!

As a PI, I'm only interested in NET PROFIT - which you will almost certainly never read of it, in analysts reviews - they've all been brain washed to be pre-tax profit mad as the answer to all ills. I have no time for pre tax profit. Just show me the money once everyone with their hand out, has been paid off fully. Net profit is what you get to keep, no further tax deductions.

So other than that, when all the shouting and dancing has died down and after the crowd has departed, I want to see what's left on the table - to keep!

I have the net profit as probaly coming in just a little less than last year's comparative period, a guessitimate as H1 was marginally down on the preceeding H1 period.

So a stonking Chrismas period needed to correct it. (Looking forward to the update).

The update is the Q3 period only, isn't it? Your figure almost certasinly appertains to a full 12 months comparison trading, yes?

Nothing anywhere is looking like £422m profit to me, for either Q3 or the potential full year when complete. Be interested to hear where you obtained that figure from - and what exact type of profit heading it refers to. If you have a net profit figure from the same source I'm all ears, as analysts never discuss nor publish either in magazines or online, "net profit" - and it winds me up!

Nope! That's a UT trade.

- Google : 'Uncrossing Trade'.

Mikey - a little mantra I read on a traders site, you can check if it has any relevance:

"The price in the mornings is what the PI's think, and the price by close is what the institutions think".

A good summation link provided there TL.

So, in essence:
Sort out the 3 main loss making areas by shutting down India,
selling off Spain and Italy
(or turn Italy around if possible) but only Italy out of the 3 is potentially viable to turn around. After which it would be Bob's your uncle and a case of singing:
Hi hi, hi ho, it's off to work we go, with a fiddle and a pick, and a walking stick, hi ho, hi ho...... But whatever India has to be closed down as soon as, and take the hit - unless the Indian govt talks subsidies of some sort beforehand.

The CEO is not specifically responsible for shareholder's concerns on a falling SP. Only the BOD is directly and specifically responsible for shareholders concerns - it forms part of their job description - so a letter to the Chairman (the BOD's appointed representative) is the one to complain to, when trying to hold the BOD accountable. It's said that no one ever bothers the CFO and on average they are usually more responsive to shareholders communications due to rare communications from shareholders. I've read of CFO's actually taking phone calls from shareholders!

Did say yesterday I wanted to add more today if able to, but got too much on the go and tiredness has caught up, so that will have to wait some days/weeks, as will my posting in general too.

Discovered that Pentland, via the family that own it, are on record as saying they will never drop below 50% holding in JD. Very  pleasing to read that after that big sale.
They have the controlling stake in JD and quite rightly the owner Andy Rubin (private now, no longer a listed company on the stock market) is, as you may know, on the board of JD as well, as a NED - and specifically overlooks the governance of JD by the directors. So he does actively work in the industry at the coalface to ensure his investment is protected.

Don't wish to add more 'new' notes that I have on the low net profit of H1 as too many posts on that subject can look like deramping. (One division in H1 reported not just losses but increased losses; wasn't expecting that).
- And on that subject I'm really keen to see the trading update soon, approx round about 13th January.

The SP today hits another 52 week high this month, and that's all anyone needs to know about the market's response to my concerns. New 52 week highs continue in the SP as they did in yesteryears.  More and more it's looking like little of Finish Line's revenue and profit was in H1 with perhaps the major bulk of that contribution to be added in H2.