Good morning!

A very quiet news day today, but I'm sure we'll find something interesting to discuss. Also, Graham has emailed me a section on Jarvis Securities (LON:JIM) results from yesterday, which I have added to this report. Thanks Graham, I know that is a stock that several readers asked us to report on.

Driver (LON:DRV)

Share price: 42.9p (down 8.7% today)
No. shares: 32.1m
Market cap: £13.8m

Results y/e 30 Sep 2016 - it's taken 4 months and 17 days to produce these accounts, and they're not even audited yet. That's a really bad start. Good companies don't deliver accounts this late.

Mind you, after just reading the first few paragraphs, it's clear that things have been in a mess at this company - with changed management, and problem levels of debt.

I last reviewed this company in May 2016, and came to the conclusion then that the bank borrowings looked worrying. Also I disliked the large receivables balance, and noted a bad debt write-off, and change in CEO.

The highlights make it sound as if the operating loss was modest, at £0.2m, but just look at all the adjusting items below. Horrible!


Balance sheet - this looks pretty dreadful too. Net assets are down sharply to £7.6m, of which £4.1m is goodwill & other intangibles. So NTAV of only £3.5m.

Given the enormous debtor book, which has risen to £20.3m, that leaves a gap on the balance sheet which has been filled by bank borrowings - net debt is £9.9m. Although it looks as if the bank has had enough, and forced the company to repair its balance sheet (see details of equity fundraising below).

Turnaround? - today's results highlight that H2 was improved against H1, costs have been cut, and the business reorganised. On current trading, the company says that H1 to date is better than last year;

First 4 months of new financial year comfortably ahead (by £1.1m at an underlying* profit before tax level) of prior year and ahead of internal forecasts

Sounds good, until you check to last year's interims, and discover that it made a £1.5m underlying loss. So this implies that the business is still marginally loss-making now. That doesn't strike me as much of a turnaround, yet.

Outlook - further comments promise improved performance…

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