There is little point in re quoting previous Board comments- up till now the Board have had little credibility- mainly due to the RT factor (someone who is not so much economical with the truth as downright parsimonious). However this set of results and associated announcement will be the first since the Board change, you have KPMG (and their insurers) taking a particular interst, a NOMAD who was rocked by their incompetence on the Listing and thus keen to "get this right". This weeks statement will be life-defining for the company. redleaf- the new PR- must ensure that whatever is said is supportable, measured, believable. No need to over hype. If forecasts come down so-be-it, the stock is so cheap there can be a downgrade and the price will still rise if we have credible numbers. So don't get bothered if the statement is less bullish than hoped for- what matters is credibility.
Most of the bad news, the concerns about corporate governance, the previously overly aggressive accounting is in the share price. The company have not been a paragon of all the virtues- far from it. But if the new non-exec, backed by M&G, are getting the company into a shape where (notwithstanding previous misdeeds) the company is once more a sensible investment proposition for main stream funds, the price will only go one way. I am optimistic that the statement will be more balanced than the past, less waffle, more about delivery and cash generation- in short "more grown up". If it is, and if there are further moves to strengthen the Board with quality NEDs, a bit of institutional buying will power the price.
The Guerilla piece makes interesting reasoning. While I have continued to buy the shares my guess is that at least some of what is written is right. RT is no saint. Corporate Governance at the Company has been appalling. I quite believe they have sailed too close to the wind in the past, and may still be engaging in aggressive accounting. However, even if a good half of what is written is correct (and this is why we will never see libel actions from RT), that doesn't destroy the investment case. As long as the company isn't a total house of cards then the shares are, even with a huge "corporate governance" discount just too cheap. David Currie has been on board for a few weeks now- if the whole company were a sh@t house he would have walked by now. The company does have issues, but with a new approach to doing things the right way, there is good reason to believe the company can prosper. You don't have to fall into the "RT is a genius who can do no wrong", or the "company is a total fraud" camps- I am between the two. RT is not my CEO of choice, the company has major problems, but notwithstanding that the shares are still a raging buy.
Interim Results. Whether or not KPMG sign off the interim results, David Currie will have made darned sure they have reviewed the statement thoroughly, he will not want the first set of numbers he has responsibility for to be in any way deficient. This may mean some negative news (as a more conservative view is taken) but is fundamental to establishing credibility. All the advisers, and non-executives, know they are in the spot-light on these results. So don't expect outlandish good news: do expect a more thought out approach to be taken seriously.
If the Company are listening to their new PR advisers and Brokers they wil produce a results statement which is long on plain, simple english and short on waffle, self-aggrandisement, and management double-speak. The results need to concentrate on cash-generation, short-term guidance, cash-generation, contract wins (and the status of the RAC contract) and cash-generation. The company needs to get in the mind set of under-promising and over-delivering. It can be a quite boring statement as long as it is credible for the rating, and share price, to improve substantially. As commented before the key to getting the price to a sensible level is to make the company investible for Instituions (beyond Gervais Williams, Fidelity, and Tom Dobel at M&G. A few instituional buyers will see the price rise. I bought shares much higher up, some more quite a bit higher up, some more a little higher up- but proving there is nothing like an old fool have just bought more. The price is either going to zero or is going to be a multiple of where it is now in 12 months- the risk/ reward looks encouraging
Shorters short. We should all get used to it and stop moaning for Mummy (sorry the FCA) to come and tell them off. So far they have been right, and those (like me) who have bought higher up have been wrong. One of two things will happen- either the real sceptics of the story will be shown to have been right and our shares will be worth as much as a used condom on Brighton Beach, or the story comes good, proper instituions buy, and the price rockets. I remain of the view the latter is more likely- so this is another great opportunity to average down. the risk/rward ratio greatly favours reward- so back in to the market I go.
The emergency RNS yesterday perhaps stopped an even worse fall in the price, but we cannot expect to see any stability until the results are out in two weeks, the company can get out and see institutions to create buyers, and perhaps the Board put money where their mouths are and buy serious amounts of stock. Until the results expect the price to be very volatile- don't be surprised if it tests 150p,, and equally don't get too enthusiastic if it rises to 180p. The short positions have made money- and they will continue to be active until they are no longer making money, that requires the price to rise and for that institutional buyers to appear. The company and their over-paid brokers better have a great road-show lined up post results to make buyers.
The company must, through their new PR firm, and their over-paid brokers, be aware of some of the specific negative comments that are going around. Assuming they are monitoring this discussion- which they will be- can they please get their respective fingers out and notify the market if they know of any reason for the recent share price weakness? If they know of no reason then they should say so, and the price may stabilise- otherwise negative sentiment will get the upper hand. And they should by now be able to give an update on the first half numbers (accepting that the formal release won't come for a couple of weeks). Like most on this Board I am nursing a painful loss- and for the company to do nothing is pretty poor form. And it isn't the case that waitng for the good news will be enough by itself- as we have seen the price falls quickly and rises slowly- the Board and their advisers need to be pro-active,
Re Broncomaniac. The new NED is there effectively at the request of M&G. I would be surprised if he bought shares in his own right. More importnaty is seeing whether M&G will buy more- and whether more than Tom D-B buys. And yes- given the announcement of the results on August 21 the whole Board are insiders at the moment,
Interims. I doubt the interims will be audited. BUT there is no way that David Currie, the newly appointed NED, will allow them to go out without a thorough review both internally and by the auditor ( not formal audit, but still "challenging").