Good morning/afternoon, it's Paul here.

I hope everyone has had a smashing Christmas break.

As you would expect, there's very little news today. A couple of items caught my eye.




DFS Furniture (LON:DFS)

Share price: 198.25p
No. shares: 211.7m
Market cap: £419.7m

Acquisition - this is only of passing interest. DFS has bought 8 stores, and the intellectual property of MultiYork, a smaller competitor which went bust not long ago.

This sector is looking quite interesting, as there are several up and coming new entrants. Plus, Harveys & Bensons Beds are reported to be in financial trouble, due to a reduction in trade credit insurance. People often forget that it's not just banks which extend credit to many companies, but also trade credit insurers can be even more important. If the trade credit insurers lose confidence in a company, and refuse to insure its suppliers against bad debts, then that can kill a business, as supplies dry up. An example was the original Game Group (now in a new incarnation of Game Digital), which went bust in Mar 2012, when suppliers refused to supply products due to withdrawal of credit insurance.

For me, its awful balance sheet rules out DFS as an investment, even though it is a decently cash generative business.




Halosource Inc (LON:HAL)

Share price: 3.0p
No. shares: 338.0m

Market cap: £10.1m

Trading update (profit warning)

HaloSource, Inc. ("HaloSource" or "the Company") (HAL.LN, HALO.LN) the clean water technology company, today provides an update on trading ahead of the year ending 31 December 2017.


Looking at the market price of this share, the bid price today is 1.0p, and the offer price is 5.0p - so valuing the company at the 3.0p mid price is pretty meaningless.

Today's profit warning is caused by a temporary regional shutdown in China, ordered by the government, for pollution mitigation reasons.

2017 revenues are now forecast to be between $2.6m to $3.0m, resulting in a net loss of between $5.0m to $5.5m. So an absolutely horrendous performance, worse even than the $4.16m net loss showing on Stockopedia's broker consensus forecast figures.

Amazingly, the company has found investors prepared to refinance it, with a $2.8m fundraising apparently in progress. That was priced at…

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