I have been a holder of Fulcrum for about 3 months and its been a difficult ride so far........but why? Below is how I see it, but would be interested in your views as sometimes you just can't see the wood for the trees.
Revenue has increased every year since 2015, and the 2020 forecast suggests it will have doubled in 5 years. Net profit tells a similar story with the same forecasts hinting at a 3 times increase. EPS will also have doubled by then, although the free cashflow figures could do with being a lot healthier than they are.
Brokers target is 45p, a 91% increase at time of writing this (15/07/19.........if you are reading this in the future did we ever get driverless cars off the ground?). Intrinsic value based on the Graham formula is currently 88.94p, with my own calculation being around the 100p mark. Added to the fact they have made some, in my opinion, decent accusations.
The CFO announced she was leaving in May and a search was put in place to find a replacement, which has just been announced. Should I be worried that the CFO wants to leave around the same time the company announces there will be a delay in announcing preliminary results?
"Fulcrum Utility Services Limited, the UK's market leading independent multi-utility infrastructure and services provider, will announce its final results for the year ended 31 March 2019 by early July 2019.
This delay to the original timetable is as a result of an increasing scope and complexity of the enlarged group and the financial reporting framework compared to previous years. In particular, work is ongoing on certain non-cash items which the Board believes will not affect the trading results and prospects for the Company.
The Board confirms there is currently no change to the guidance it gave in the Trading Update of 28 March 2019*.
* "…revenue for the financial year ending 31 March 2019 is expected to be approximately £57.0 million (2018: £44.6 million) and adjusted EBITDA for the same period is expected to be approximately £11.0 million (2018: £8.4 million)."
Look forward to reading your views on this.
My only comment would be to question what they meant in saying "by early July". It is 16th July tomorrow. I'd call that mid July and still there is no sign of the FY results. They didn't say by the end of July, did they? The CFO has resigned. Personally, I would be very worried that someone has got their sums wrong if I held...
All the best, SI
