Good afternoon, it's Paul here.

Today I've covered:

Crawshaw (LON:CRAW)

Proactis Holdings (LON:PHD)


Redstoneconnect (LON:REDS)

Plus brief comments on: HML Holdings (LON:HMLH) , £D4E , and Dillistone (LON:DSG)

Crawshaw (LON:CRAW)

Share price: 23.75p (down 21.5% today)
No. shares: 79.2m
Market cap: £18.8m

Final results - for the 52 weeks ended 29 Jan 2017.

This is a chain of butchers + hot takeaway food, mainly based in the North and Midlands. The company added 11 new sites in the year, taking the total to 49 sites at year end.

As is clear from the figures today, this is a roll-out that has gone wrong. We already knew that though, as a series of poor trading updates have already crashed the share price from a peak of about 95p 18 months ago, to just 24p today. It's been even lower too - I sold mine near recent lows and only got something like 16-18p for them, from memory. Poor timing, as usual on sells! It's just so difficult to decide when to sell, I'm hopeless at that aspect of investing.

A few key figures from today's results;

  • Revenue up 19.3% to £44.2m
  • Operating loss of £1.4m (prior year £0.4m loss)
  • EBITDA of £0.1m positive (prior year £1.0m positive)

So a clear deterioration in performance - which isn't what's supposed to happen when you're doing a roll-out. Each new store is supposed to bring additional profit, so clearly things are not working out very well here.

New sites - opening 11 new sites will definitely create additional pre-opening costs, and so the company does what Tasty (LON:TAST) did recently, and massages the figures to report a supposedly higher underlying EBITDA performance.

I think it's fine in principle to flag up genuine pre-opening costs (e.g. wages for staff being trained, before the site actually opens), and perhaps some Head Office costs related to new site openings. However, the same as with Tasty, I think Crawshaws has been way too aggressive with this process, and hence the numbers lack credibility.

Crawshaws says today;

*Adjusted EBITDA is defined by Group as profit/loss before tax, exceptional items, depreciation, amortisation, profit/(loss) on disposal of…

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