Small Cap Value Report (1 Jul 2016) - SAL, QTX
Good morning!
Mark Carney, Governor of the Bank of England, gave a speech yesterday (video link) which triggered a further fall in sterling. The key points I jotted down were;
- Economic outlook for UK has deteriorated
- More monetary easing may be needed over summer, have tools at their disposal
- Limits to what the BoE can do
Therefore, it's looking like sterling may remain low for some time. This further reinforces my current strategy of trying to buy bombed out shares where there are considerable overseas (esp. dollar) earnings. Also companies which are UK exporters. So for example I bought some Portmeirion (LON:PMP) yesterday, as it should benefit from the weaker pound.
I think this is also quite bullish for the domestic property market. Anecdotally, I've heard that some buyers are pulling out of house purchases. Although I'm also hearing that overseas buyers are steaming into the London market, seeing cheaper sterling as a buying opportunity.
Ultimately, house prices are driven by demand & supply, and the cost & availability of mortgages. The bottom line is that, with interest rates this low (and likely to stay low), then buying a house is more affordable than renting (if you can come up with a deposit). For this reason, I'm looking closely at housing-related shares which have been sold off heavily. I currently hold Persimmon (LON:PSN) . Rightly or wrongly, my current view is that any downturn in the housing market is likely to be temporary. In my lifetime, house price crashes have only happened when interest rates are so high that mortgage repayments become onerous. We couldn't be further away from that scenario now if we tried.
Indices
A lot of people expected a massive sell-off after the Brexit vote, and are now confused to see the FTSE 100 hitting a 9-month high. As mentioned before, that is mainly because the index is dominated by companies which generate earnings in dollars.
I thought it would be interesting to see how the various indices have performed over the period since Brexit. Here are the figures as of last night;
(table corrupted, so here are figures manually)
FTSE 100 +2.6%
Mid Caps (MCX) -6.1%
Small caps (SMXX) -5.9%
Aim (AXX) -2.6%
(from CoB June 23 to CoB June 30 2016)
As you can see, whilst large caps are up, mid and smaller caps are down about 6% in the last week.
AIM is a bit of an anomaly, because 5 out of its 6 largest constituents have all out-performed for company-specific reasons (Asos, GW Pharma, Abcam, James Halstead, and Fever Tree)
Furthermore, a lot of losses have been concentrated into a few sectors - e.g. retailers, recruitment, housebuilding & related. So cyclical stocks have been hammered, whilst defensive and/or dollar earnings, have done well.
This process has been extremely rapid, because a single event triggered it. Whereas normally sector moves happen gradually.
Overall though, even a 6% move down is not really a lot, considering the economic outlook has markedly deteriorated in the last week. I was discussing this with a friend, who reckons it's not surprising at all.
His argument is that there's nowhere else to put money. Cash earns nothing. Bonds are too expensive. Property is now much more uncertain than it was, and buy-to-let is endless hassle with tenants, for not very good yields. Gold, etc, are just punts. So equities have considerable attractions, despite the uncertain economic outlook.
The other consideration is that, whilst we may well have an economic downturn, it may not last long. 2008 was an aberration, and personally I don't see any reason to believe that the next downturn will be anything like that bad. There could be some external shock which triggers another crisis though - e.g. the next Eurozone crisis. Or a major bank failure - Deutsche Bank seems to be the big worry, with its gargantuan derivatives exposure.
Overall then, I think it's vital to closely monitor what's going on in the world, and to approach this market with caution. That said, there are some lovely bargains around at the moment, which I am finding irresistible.
Anchoring is a real danger though. If something has dropped say 30%, that doesn't automatically mean that it's cheap. The market is pricing in future falls in earnings. So I think it's essential to only buy things that are cheap on a revised, prudent view of future earnings.
Spaceandpeople (LON:SAL)
Share price: 39p (down 13.3% today)
No. shares: 19.5m
Market cap: £7.6m
(at the time of writing, I hold a long position in this share)
Trading update & closure of S&P+ - this is certainly a share which polarises opinions!
Today's update is in 2 distinct sections. The first section is a trading update, which is fine - in line, and all parts of the core business performing well;
The Group's UK and German retail operations are performing in line with expectations. The UK has seen an increase in venues and we have a strong pipeline of UK venues with whom we are in varying stages of discussion.
The reinvigorated retail offer "POP Retail" has seen excellent traction so far and we are again currently hitting our internal budgets for this product. In addition, the MPK (Mobile Promotions Kiosk) has achieved its 75th installation and is on track to achieve the budgeted 80-100 installed units in the UK by the end of the year.
The Group's core UK and German promotion businesses are also trading in line with expectations and the Board is pleased with revenues being generated under the new Network Rail and British Land contracts.
That all sounds pretty good. If the announcement had stopped at this point, then the shares would probably have gone up today.
There's a however. A 51% subsidiary, called S&P+ has not worked out, and is being shut down. That means a one-off £275k hit to the balance sheet, as the inter-company debt is written off, and also an anticipated £180k profit for 2016 from S&P+ will now not happen - it will instead be a £200k loss.
So disappointing, but it's a one-off, ring-fenced issue.
The core business should generate a profit "broadly comparable" to last year.
Directorspeak - self-explanatory;
Matthew Bending, CEO of SpaceandPeople commented: "Obviously, we are very disappointed about this outcome and understand the impact this will have on the employees of S&P+, however, the core UK and German promotions and retail businesses are trading in line with our internal expectations and we are very happy with the development of the MPK programme, the rejuvenation of "POP Retail" and the strong pipeline of UK venues with whom we are in discussion about joining our service. We do not see the decision on closing S&P+ as having any negative effect on the core business."
My opinion - it's the type of profit warning that I like - i.e. a ring-fenced, one-off problem.
It sounds like the rest of the business is trading well, and with the market cap now peanuts, I like it at this level. Whilst obviously recognising that the share price performance has been very poor. That's the past, which we can't change. It's the future which matters to me.
So personally, I'm glass half full on this one, at the current valuation. Plenty of people are glass half empty on it, mind you.
I had a catch up call with the CEO this morning, and will publish that this evening on my website.
Quartix Holdings (LON:QTX)
Share price: 320p (up 3.2% today)
No. shares: 47.3m
Market cap: £151.4m
Trading update - an in line update today from this telematics company;
...The Company is pleased to report that trading to date has been good and consistent with achieving market expectations for the year as a whole.
Andy Walters, Managing Director, commented: "We continued to make progress in all markets, ending the period with 8,200 fleet customers and 79,000 vehicles under subscription. Insurance installations showed strong growth compared to the same period in 2015. We continue to invest in marketing and development initiatives to drive further growth in our core fleet markets, and remain on track to meet profit expectations for 2016."
That sounds good. Although this share is priced pretty aggressively.
My opinion - it's not a company I know well. However, with recurring, subscription revenues, and growth, it should be fairly robust in the face of a slowing economy.
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54 comments
Maybe there is some equity left in S&P+, so SAL will recover part of the loan due by the other owners? Anyway, I find the answer from the CEO to Paul way too short. He would better go into the details instead of always finding things obvious. I have the feeling that he is not doing the detailed work, this is why there are so many surprises in this company.
Surely, whichever way you cut it, SAL had an asset of £425,000 plus £50,000 and now they don't.
I may be talking to myself here but the response from the company was:
The reason that the one-off loss in the Group results will be less than the total amount of £475,000 is that part of it is eliminated on consolidation as SpaceandPeople are not 100% owners of the S&P+ subsidiary.
Does this make sense? Is this accounting gobbledygook if they are still writing off £475k?
Thanks
It a company lends 100 to another company, this shows up as an asset worth 100 on the lender's balance sheet, and as a liability worth 100 on the borrower's balance sheet (balancing the cash movement between the two). If the lender is a majority owner of the borrower, accounts are consolidated and so the liability comes back on the owner-lender's balance sheet, pro rata of ownership hence a net asset worth 49 (100 asset - 51 liability) for 51% ownership, reflecting the proportion the lender owes to itself.
The other loss is the 51% share in the subsidiary's negative results.
Thanks cig, that makes sense.
Bearing in mind the company said:
The loan of £425,000 that SpaceandPeople has provided to S&P+ will be written off as will approximately £50,000 of intercompany debts resulting in a one-off loss of approximately £275,000.
So where does the balance of the £200,000 written off show in the accounts. Does it only appear in the cashflow statement rather than the p&l?
I'm with you tiswas regarding SAL.
Here is a company making a profit of 1M so whatever the real impact on their P&L these figures are not insignificant. I still don't feel that management has given a clear explanation of the real costs to SAL. Maybe they expect the other 49% owners to cough up their share of the £425,000 loan but will they or will they just walk away?
Then SAL says IN ADDITION TO THIS, instead of the £180,000 profit contribution expected, there will now be a loss of £200,000. Why is that? OK, I understand that S&P+ is going to be put into administration so SAL will not receive a "profit" this year but why will they also lose £200,000? And that on top of having to write off their £425,000 loan?
Hi Laughton
As I understand it the 49% shareholders were directors of the company. PLC made the full loan or a PLC sub, and so no one else is on the hook for the balance.
I have been in touch with the company seeking clarification but basically have been told to take a hike as it is an accountancy issue and they do not see it as their responsibility to explain this to a shareholder. Even though I only have a punt sized stake here that does not make me happy and so I am hoping that Paul will either know the answer or at least use his relationship with the CEO to get us one.
Not impressed!
I would add, I am not saying that the company is wrong. I would just like to understand why from an accounting perspective the loss is so much less than the amount of loan written off.
"S&P+, our London based above-the-line ("ATL") advertising support company's main goal was customer and revenue diversification. In 2014 they transacted one large project that dominated the resources of the small team. In 2015 they broadened their offer and a larger number of smaller contracts were won, further establishing this unique business model. Revenues were lower than 2014 at £2.4 million, but I view the progress made in 2015 as being a real success."
This was MB in April this year regarding an investment he has just abandoned.
'Nuff said? Good luck to holders. I'm out.
Thanks Paul for the interview with Spaceandpeople (LON:SAL) CEO , very useful , I'm not persuaded of the investment case but appreciate the background.
Thanks rhomboid1,
I like the CEO of Spaceandpeople (LON:SAL) and am happy to let him explain things as he sees them.
My agenda is to just put stuff out there that I think is interesting, and then let people make up their own minds.
At the current level, I feel that SAL has obviously disappointed, but personally I'm happy to give them the benefit of the doubt.
DYOR as usual. Others may disagree, which is fine. No big deal.
Regards, Paul.
Paul
Thanks for the SAL interview.
Can I lean on your accountancy skills? Why does the 51% ownership of S&P+ mean that the one-off loss is £275,000 rather than as you suggested £475,000 being the £425,000 loan and the £50,000 inter-company debt? They are writing off all of the £475k are they not, it is all SAL's money even though they only own 51%?
Cannot get my head around it.
Thanks and regards
Rob
Regarding SAL, there will be other assets in S&P+ which will be liquidated, so I assume there will be adjustments in addition to the 450k debt w/o that have not been disclosed to arrive at the £275k. The RNS states that: "In addition to this, S&P+ had been expected to contribute £180,000 of profit before taxation ("PBT") to the consolidated SpaceandPeople group results for 2016 which will now be a loss of approximately £200,000 instead." What does this mean? I interpreted it to mean that the loss of £200k is S&P+ loss, so that in effect the previously forecast SAL profits would now have to be reduced by: £275k (one off) plus 380k (£180 (expected S&P+ profit now £200k loss). But I have seen elsewhere this interpreted as the profit for SAL now expected to be £200k loss. What is your interpretation, Paul. Could you ask the management for clarification, please. Another point: Formed in 2012 S&P+ has a very short history. The latest Companies House report is 2014 but the directors seem to have been well paid considering the size and performance of the business. I read that the business of S&P+ is not directly related to SAL core business, but just what does it do? I have not been able to answer that question. I've not done a lot of digging to be sure, but I sense a red flag here. Incidentally, I would have thought that a company that wants to be transparent and engage with shareholders would have filed its subsidiary accounts with Companies House at the same time as it published its PLC accounts - that it has not suggests something to hide.
I am willing to be a contrarian about interest rates as it seems to me that the collapse of the pound will need to be arrested to avoid the inflation from imported fuel, food, etc.
The recession then follows as mortgages and corporate borrowing costs rise. I don't of course want this to happen but I cannot realistically see it being avoided
5% rates by December - that's my bet
I'd recommend getting some interest rates options then, you can easily become a multi-millionaire if you're right (the best quote I see pays 1700 times your stake if rates are at 5% in December).
Problem with the "collapse" of the pound is that so far it is just -10%. Such a move will get you something like 3% inflation worst case, as domestic inputs are unlikely to move. Doubt the BoE will react at all to that kind of move in a likely recessionary environment.
We are only a week into the change and I don't believe that people yet understand that the EU's desire to take over the city has almost no chance of being stopped or even negotiated. This will very quickly collapse the UK tax revenues (and house prices) requiring far more robust action than is yet being discussed.
I appreciate your suggestion and will look into an area I have no current experience with.
So far I have been using Stockopedia to look very closely at any stocks that have significant sterling debt as well as those that have significant non-sterling income. There appear to still be opportunities in these areas.
Betting on rates via stocks is not very efficient. Here's the product I was looking at:
https://www.theice.com/products/37650331/Options-On-Three-Month-Short-Sterling-Future
Losing out on finance is possible, though I suspect it won't be that bad because people are sticky, so even in the worst case deal, it's likely that financial institutions would move legal entities and some key regulated functions, but would keep some London staff working "remotely" as moving/replacing everyone is a pain and many finance jobs can be done from anywhere (see India). Also on the plus side the London may get some "offshore" style business that wasn't previously possible.
That may still result in lower tax revenues, but that's deflationary, as this means the state spending less, thus newly unemployed people (direct staffers or contractors) competing for fewer jobs and likely taking a pay cut.
It's hard to guess if that results in lower house prices, but if it does that's also deflationary.
So the only thing that could produce inflation is a further massive decline in the exchange rate, not offset by recessionary conditions. Seems somewhat far fetched to me, even if the City was indeed obliterated.
Can't see interest rates going up this year.
Sounds like HYP style investment is in vogue.
There are some strong tides working in favour of housebuilders. There is unanimity that more homes are needed, quelling planning risks, the companies have huge consented landbanks, most are not highly geared, and the immigration thing will continue even in the worst case Brexit outcome, just increasingly from the third world rather than EU.
Rental yields underpin the valuations of finished units to a large extent, and interest rates are keeping things semi affordable.
I am now heavily long housebuilders post Brexit and hope the jitters cease, because a return to normal valuations would be awesome. I'm reminded about Ben Bailey back in the day, where our gracious host made good cash backing an undervalued builder...
We need to select shares that have a good dividend payout and are rising on an upward trend.The theory is if the company pays out a decent dividend, it must be making a good profit.
With rates predicted to go lower, interesting stocks to look at could be defensive companies with strong branding (to reduce risks), a debt heavy capital structure and high overseas revenue.
Paul, I'm not sure interest rates caused the crash in house prices. 2007 mortgage rates were about 7%, ok thats high compared with todays rates but it was not excessive back then. Also when I bought my first house in 1984 mortgage rates went from 10% to 15%, over the next 3 years house prices went 50% in my region (East Anglia). In London they went up 76%. I don't really correlate rates with house prices. In my opinion its more about the economy, if you have very low rates thats a sign the economy is struggling as in recession or close to it. If you are losing your job you won't be buying a new house certainly not a more expensive one. Demand will fall. Share prices have fallen because of recession fears. So it will depend if there is a recession and if there is how long and how bad it will be. You may want to look at Builders shares price around 2008.
To be honest I'm not bothered about house prices because I'm not planning to move, even if I do its all relative, my house goes down so do the others.
Over the last forty years the chronic housing shortage in this country hasn't changed, but I've seen three house price crashes. It's not always just about supply and demand.
In the mix of things to think about are affordability (good, if interest rates drop further), confidence (poor, if we start seeing job losses), a potential reverse in immigration if nervous EU immigrants decide to return home, a flow of financial services jobs out of London to the continent (unlikely to be a flood, but even a trickle can have an effect, if it's of high earners), a hiatus in inward investment until the post-Brexit settlement become clear and a number of campaigns from EU cities to tempt UK entrepreneurs to move (I've already seen one of these this week, signs of things to come).
Personally my home gives me more than enough exposure to UK property without taking on additional uncertainty in the sector. In any case I think there are plenty of other opportunities looking at companies that will be natural beneficiaries of a lower pound both in the UK and overseas. An added benefit of the latter is that the devaluation of sterling makes some of our more advanced companies look pretty cheap to someone looking for acquisitions.
timarr
It's not different this time. http://mhanson.com/2242-2/ (US but relevant).
"“Shadow Demand” is simply unorthodox, or non-traditional demand – as opposed to end-user, shelter buyer demand – with access to cheap and easy credit and liquidity that becomes the dominant driver of both incremental demand and prices."
The UK housing market has nothing to do with owner occupiers, hence the detachment from wages.
Well if was a London property buyer from overseas... salivating at the non stop rising trend in housing prices since 2008, looking at that chart and knowing that I am going to make money with my London property purchase......It would be disconcerting to see that this chart no longer seems to be going up (measured in home currency). It may raise doubts as to whether the steadily rising prices will continue forever.
Just a thought.
Agree, Paul - I'm bullish on house builders. I think while perception will be that demand will decrease, there is more than enough demand and we have a significant shortage of house already before looking 3 years down the line. The weaker pound as you say will make property investment more appealing to foreign buyers. I like Berkeley Group (LON:BKG) in this regard as their property exposure to London is quite high. Lower interest rates will encourage more lending also, which is a further positive. With the dividend you get from house builders, I think it's a buy and hold for long time - but that's just me!
I'm not invested in any builders. It's been an autumn buy and a spring sale for me based on their market cycle. If I was looking to invest now then exposure to the high end of the London market is something I would want to minimise. Those blocks in Nine Elms aren't selling very well. The Singapore banks have stopped lending. That's where the bubble is and that's why the hedgies have done well from shorting Berkeley Group (LON:BKG). http://www.standard.co.uk/business/hedge-funds-up-bets-against-luxury-london-property-a3219296.html
At the affordable end of the market selling to owner-occupiers there is still a lot of demand.
One Singapore bank has stopped lending, not all of them. The two other major banks are still lending as the article confirms. While one has stopped lending, the BBC article does at least confirm there is certainly a healthy intent for foreign investment in UK property.
Seasonality is true, but I don't think we will see prices as low as the post-Brexit prices, which is when I picked up my shares having sold most of my holdings before the referendum. To be honest, with the dividend, I am more than happy to sit back and hold on to them.
I have to say that I agree with you. I have been making an assessment of my shares that fell after the Brexit vote and Berkeley Group (LON:BKG) is one that I have averaged down. I did discuss on a thread here the option of diversifying a little and buying a different builder but I just think that the management of Berkeley Group (LON:BKG) are so on top of the market. Before anyone said anything about there being any value in builders this week and when the share prices were plummeting, they were buying a serious number of their own shares (see RNS). I read on another bulletin board someone saying they thought they were trying to support the share price. As if. They were buying in my opinion because they know their business and they are the only ones that can see their order book - I even read a quote from Tony P which I recall said they hadn't lost a single London sale. That may have changed by now of course. The management could be wrong but the people that shorted this share have certainly had their fingers well and truly burnt after a 5% rise on Friday alone. It's a sad fact that many Europhiles I know now think the UK is the last place on earth they want to support or live but London hasn't changed as a physical attraction and with the fall in the pound it just got a whole lot cheaper for many buyers. At the end of the day, no one knows but given the improvement in the EPS (and sentiment) from the buyback at the recent bottom of the market and the substantial divi, I'm prepared to take the risk.
I just read on a Hargreaves Lansdown market report the following:
Interest rates have been at 0.5% for more than seven years after being cut during the UK's downturn and financial crisis.
Nomura's UK economists expect a 25 basis points (bps) rate cut in August, followed by another 25 bps cut in November. "The MPC may ultimately conclude it can go slightly negative, or it may prefer to keep a marginally positive rate."
Is it REALLY feasible to end up with a zero interest base rate, and how is that going to help? Surely all those people with savings are going to be very fed up!!
I agree. Negative interest rates don't help, they make things much worse. They wreck the ability of banks to make a profit. To be fair, Mark Carney has made the point that there's only so much that monetary policy can achieve.
They could introduce further QE without cutting rates, but I think today's announcement from Osborne that he's abandoning his deficit reduction target is an acknowledgement of Carney's point.
Of course we could let the market do it's job without all this interference..
"Of course we could let the market do it's job without all this interference.."
That's what tried by the Fed in 1930's. It didn't end well.
Savings and bond rates are going to be incredibly low.
While a lot of shares will be looking like providing much better returns. But as Paul says their earnings may not be sustainable
Thats why I think we will see and already are a flight to quality shares that have proven their long term returns over decades including some smaller family run shares.
I need to cash in some shares to meet a personal event in September. My strategy over the next 3 months will be to cash in the shares I see as lower quality and hold 25 to 50% in cash. I will retain the shares with good cash backing long term proven returns and also in sectors or countries/international focus I see as favourable. I would not be surprised to see autumn turbulence and want to be positioned to meet that event.
Yes its perfectly feasible to have negative interest rates. The ECB has already set them and some German bunds already are.
Whether its wise or healthy is another matter.
The idea is precisely to get people with savings to be fed up and spend, so as to get the economy running.
I thought it was to reduce borrowings so they had more money to spend.
People with savings often want income from them, so they will look for other ways of investing such as shares.
Prices fell 20% after the financial crash in 2008 without interest rates changing at all. The falls were only arrested by quite unprecedented intervention in the market by both the Bank of England and the Government.
This story: http://www.bbc.co.uk/news/business-36670075 rather scotches the myth of the cash rich, overseas buyer filling his/her boots with London property. These "cash" buyers have been nothing of the sort. They've simply borrowed money in their home countries and used it to buy London property. The lending banks have just been reminded what happens when they have security over assets denominated in a different currency and the exchange rate moves heavily against them. With Mark Carney talking about dropping interest rates and starting the printing presses again they ought to be worried about the exchange rate moving against them a bit more.
The UK property market is a massive ponzi scheme that is running out of people willing to put money into it.
On the one hand I suppose SAL has dropped a lot and some might consider it is now good value.
However, if the core business is supposed to be trading well, then why is it only able to expect a profit "broadly comparable" to last year? On that basis, it would need to do a LOT better to generate growing and meaningful returns... wouldn't it?
Worth checking out the Richard Beddard article on QTX to understand the basic company model.
apad
Its interesting that Spaceandpeople (LON:SAL) went as low as 33.75p this morning, before now recovering to 41.50p.
It goes to show that the market right now is very jittery - the slightest bad news can shares tumbling massively, before they then recover some of the losses.
There looks like there has been some insider dealing over the last few weeks, as the SP has been drifting before this announcement.
so with interest rates looking to stay at a low in the UK and the drop in sterling, does anyone here buy bonds. shouldn't all this help bonds in the UK to increase?
There will risks to conventional bonds from the expected higher inflation fed by the fall in the pound plus the danger of an overseas buyers strike if they think the UK - EU negotiations are going badly. Added to which of course the government has just abandoned its fiscal targets for this parliament. If the fall in sterling turns into a rout, the BoE will have to raise rates against the interests of the UK economy.
As with equities, there is a great deal of uncertainty.
I buy index linked bonds as a (succesful so far) way to reduce volatility in my overall portfolio. I like ISHARES ? IND-LINKED GILTS UCITS ETF (LON:INXG) ETF and £NG1Q as well as Treasury T2HI and T30I.
Hi Paul
Have you sold out of Spaceandpeople?
Tads,
Sorry, sorry, sorry! Rushing for a train to London, and forgot the disclosure on SAL.
Have added it now. Thx for the prompt.
Regards, Paul.
"This further reinforces my current strategy of trying to buy bombed out shares where there are considerable overseas (esp. dollar) earnings. Also companies which are UK exporters."
Can anyone suggest a good way to screen for these sorts of companies?
Unless you have access to a Bloomberg terminal or something similar I think it will be the old fashioned way I am afraid! If anyone does have a way though I would also be interested in this!
Hi jimmygee,
Good question, I spent a while trying to do this on Sharescope, and failed. Perhaps Paul could forward to Ed who might show us a way on Stockopedia?
If he could, that would be really useful!
From the RNS:
"The loan of £425,000 that SpaceandPeople has provided to S&P+ will be written off as will approximately £50,000 of intercompany debts resulting in a one-off loss of approximately £275,000."
Isn't that a £475,000 loss?
SAL only owns 51% of S&P+, so the hit to its P&L is £275k (half of £425k + £50k).
P.
But "the loan of £425,000 that SpaceandPeople has provided... will be written off" is surely a 100% loss of that £425,000? It doesn't mention anything about a JV partner being liable for any part of that loan. Is that not the loan, sat in full, on SAL's balance sheet under "Other debtors" (note 16 in the Finals)?
I look forward to an update on your call with SAL Paul. I have contacted the company to try and understand why the loss is not the full amount of the loan written off but I am still confused.
Also, S&P+ had negative shareholders funds at the time of the last accounts (12/14) so I am surprised they were in there for that much money unsecured. Group directors were also on the board.
Regards
I'm not an accountant - but I read it (on third attempt) as a £275,000 hit to the Balance Sheet PLUS a £200,000 loss on the P & L. As that was expected to be a £180,000 profit then I guess you could say it's costing SAL a total of £655,000 on what was "expected" perhaps??