Good morning, it's Paul here, with Friday's SCVR.

Today's report is now finished. Sorry, I've dropped MCB from the list, as it doesn't interest me at all, and a friend has just invited me for lunch, and the sun has come out. Thank you for your indulgence!

Here's the link for yesterday's full SCVR, which I finished off in the evening, and now covers Epwin, Speedy Hire, and Anpario, as well as earlier sections on Victoria, Saga, and Dunelm. Some interesting companies there. I've been very encouraged by quite a few interesting situations which are emerging at the moment.

Broker forecasts - opportunity

There's a really good opportunity at the moment, to work out which companies have badly wrong broker forecasts out on them. Some brokers are too optimistic (or forecasts are old & out-of-date), and some are ignoring strong current trading, hence issuing woefully pessimistic forecasts. If we spot the right ones, then there's good money to be made in some shares, I reckon. Hence it's more important than ever to closely scrutinise trading updates & outlook comments.

Lack of guidance - not acceptable

It's a really poor show that some companies are still refusing to give full year guidance, given that we're most of the way through 2020, and it's pretty clear that a gradual economic recovery is gaining traction.

Companies don't have to give precise profit or revenue forecasts, but they could give guidance on this basis:

  • Base case (i.e. management's reasonable forecast, which they will all already have internally), then an
  • Upside case, and a
  • Downside case (renewed lockdowns, etc).

Why can't they tell us (the owners of the companies!) this basic information? Failure to provide guidance at this stage is, I think, unacceptable, and investors need to start putting pressure on companies to give proper guidance - a range of possible scenarios to the market. I note that they do this when they want to raise money! And sometimes the auditors force them to reveal stress testing in audit reports (very useful). We need proper disclosure of future guidance, not the feeble excuse that it's too uncertain. They all have forecasts internally, so we need to see them too. It's wrong to keep the owners of the company in the dark.

Halfords is a great example (below) of best practice. This is an excerpt from the SCVR for 7 July…

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