Good morning from Paul & Graham!
Apologies for the lack of a podcast this weekend, the creative juices dried up I'm afraid.
Agenda
Paul's Section:
Fulcrum Utility Services (LON:FCRM) - a disastrous convertible loan refinancing, which effectively means the shares are now worth 0.5p or less. The market price of 3.4p should therefore require an immediate ditching of this share, for anyone holding. I'm reporting on this, because it's a warning of what might happen at other companies which need funding at a time when the market is not interested in funding anything that isn't performing well.
Equals (LON:EQLS) - another positive trading update, from this forex services business, with FY 12/2022 forecasts now likely to be beaten c.10% at the revenues line, which could have a nice operationally geared boost to profits. Although I question the adjustments to profit, and large capitalised development spending, so this area needs further research. Overall though, looks well worth a closer look.
RBG Holdings (LON:RBGP) - a profit warning, but from a specific division called LionFish. The core business is performing well. So should we look through this warning as an isolated problem (the best type of profit warning)? Possibly, but a £20m loan on RBGP's balance sheet seems to be specifically linked to LionFish, and it might take time to wind down this operation, which sounds like it's on the cards. Overall, it's difficult to assess risk:reward without more information. So I'm neutral for now, but will keep an eye on it, as there's a possibility of a recovery.
Graham's Section:
A G Barr (LON:BAG) (£560m) - Barr’s announces a £20m acquisition, possibly rising to £32m in two years. It picks up a small Leeds-based drinks company, Boost, that includes the well-known Boost Energy drink. Although the RNS doesn’t tell us the exact conditions required in order for the full £32m to get paid, this still strikes me as a good deal for Barr’s, whose strong balance sheet enables them to use their own cash to fund the deal.
Lindsell Train Investment Trust (LON:LTI) (£213m) - this trust confirms that H1 was a difficult period. It outperformed the MSCI World Index in terms of total return, with the help of a dividend, but its major holding (Lindsell Train Limited, the fund management company) continued to suffer outflows and a reduction…
