Fulcrum Utility Services

Monday, Jul 15 2019 by
3

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.

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6 Posts on this Thread show/hide all

simoan 15th Jul 1 of 6
2

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

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Magicmerve 15th Jul 2 of 6

That is exactly my thought...........I read somewhere that there could be an accounting error of up to 10%. Short term that worries me, however I can't help but feel from the figures that long term there are prospects for the company.

The CEO and new CFO seem to have a good track record, but that is only my opinion. Best buckle up for an interesting ride.

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back2value 16th Jul 3 of 6

A screen threw this up recentlx. If the results contain no shocks, I may be tempted.

B2V

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jjis 16th Jul 4 of 6
1

RNS today probably explains the delay & maybe th eFD leaving too?

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simoan 16th Jul 5 of 6

In reply to post #492981

Strange share price reaction to the update from Fulcrum Utility Services (LON:FCRM) this morning. However, you always get bottom feeders coming in in these situations. At least it's now clear why the CFO had to go as the accounting treatment of tangible assets and the income generated from them looks like it was a complete mess. For holders sake, let's hope it isn't Grant Thornton doing the cleaning up...

Si

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andrea34l 16th Jul 6 of 6

I see no merit in buying this company at the present time, they have had one disaster after another and the CFO departing is often a bad sign and today's update doesn't read well to me

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