Good morning! I'm back in the UK, but didn't get home until 4am this morning, due to a delayed flight, so might have to curtail this report a little, depending on how things go.

ED Investor Forum

A diary note for Wed 24 Jun (next week) - it's the next Equity Development private investor forum. The companies presenting are Staffline (LON:STAF) , Cranswick (LON:CWK) , and OptiBiotix Health (LON:OPTI) .

The hospitality is always good at these events, but on this occasion a little bird tells me that Cranswick will be bringing along samples of their products for investors to try.

It's the usual venue behind Oxford Street tube, in central London. The booking page is here.


The biggest faller of the day so far is;

Flowgroup (LON:FLOW)

Share price: 15.4p (down 37% today)
No. shares: 317.5m
Market Cap: £48.9m

Update - this company is trying to commercialise a new type of domestic boiler, which produces electricity at the same time as heating radiators. Today's announcement is really a stroke of very bad luck for the company - the European Court of Justice has ruled that the UK's lower rate of 5% VAT for energy saving products is illegal. This seems a perplexing judgement, given that one of the EU's biggest priorities has been pushing member states to improve the environment, and reduce energy consumption.

It's surprising that the stock market had apparently not noticed this announcement, despite it being reported widely in the press on, and shortly after 4 Jun 2015. Flow today says that it will have a significant negative impact on them;

557fe8632347bFLOW_VAT.JPG

This is clearly a serious blow, as the final price to consumers will now rise by 14.3%, due to VAT being charged at 20% instead of 5%. Given that the product was already more expensive than conventional boilers, this additional cost is undoubtedly going to hit sales, as the company suggests.

Although the cynic in me thinks that the company would have struggled to commercialise this technology anyway - it's so difficult to dislodge existing, tried & tested technology in any field. So maybe this VAT bombshell provides a convenient excuse for disappointing sales?

Cost reductions - Flow says that it will accelerate its focus…

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