Good morning!

I've just added my own comments on Fishing Republic (LON:FISH) to yesterday's SCVR. Also, there are some very interesting reader comments after yesterday's article, which are well worth a read. Do I think FISH is likely to be the next big multibagger? In a word, no. Although in this mad bull market right now, anything can happen.

Let's start the day with a profit warning.


Trakm8 Holdings (LON:TRAK)

Share price: 71p (down 35.5% today)
No. shares: 32.5m
Market cap: £23.1m

Trading statement (profit warning) - it's no surprise to see another profit warning here. As I mentioned here on 7 Sep 2016, and again here on 28 Nov 2016, there were good reasons to sit this one out. Poor interims, and challenging full-year forecasts is usually a dangerous combination, giving a heightened risk of another profit warning. Which is exactly what has happened unfortunately. My commiserations to holders of the stock.

This is the key paragraph;

...revenues are now expected to be only modestly ahead of FY2016 with adjusted operating profit significantly below FY2016, with a consequent impact on cash flow and indebtedness

The main reason given is this;

new revenues being booked later in the current financial year than expected or delayed  into FY2018

Or to put it in more simple terms, the company has missed its sales targets.

The other reasons given look spurious to me, as they were already known, indeed planned, factors, nothing new;

shift in revenue model (towards more SaaS and rental revenue) continues to result in  short term revenues, cash generation and profitability being suppressed to the benefit of  the longer term

continuing, deliberate reduction in contract manufacturing for third parties, to provide  capacity for solutions demand, leading to a reduction of £2.5m in revenues this year

Cost-cutting has already been implemented;

the Board has taken steps to reduce annualised overheads by c.£1.5m and will ensure that any increases are held in line with revenues


Revised forecasts - published today make fairly shocking reading. This is a horrible profit warning. Adjusted PBT forecast for y/e 31 Mar 2017 is down from £3.8m to just £1.0m. Remember that adjusted numbers are companies putting the most favourable gloss they can on the results too!

Adjusted EPS is now forecast to be only 2.8p. That's terrible! It was only Aug 2016 when the…

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