UK 22:21 Friday, 23 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Warning: This podcast contains bad language throughout. I start with a quite surreal chat with the PR for TrakM8 (TRAK). Either he is on acid or I am. Anyway a follow up to yesterday's expose HERE is on the way. Then there is a detailed analysis of Fusionex (FXI) which is a red flag delight. Then it is onto the disgusting events and flagrant market abuse at Frontier Resources (FRI) and some scathing comments on the dog that is Bingo, Bongo, Bango (BGO). PeerTV (PTV) gets a lashing - I have a cunning plan for this one. Then a comment on how bad news is good news at Pearson (PSON) and finally considered words on MX Oil (MXO)
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Comments
Paul Scott
Tom,
TRAK didn’t lie about their net cash in their RNSs, it was just an administrative error. They copy/pasted previous year accounts, when there had been no debt, and nobody spotted that in the most recent accounts that cash was stated gross, not net. It was a cock up, not a lie. I picked up on the error in my blog, and thought it was odd. Mistakes in RNSs happen – it’s sloppy, but there’s no evidence whatsoever to suggest that it was a deliberate lie.
Next, your point about free cashflow – irrelevant. The company is growing fast, and hence it’s not (yet) generating that much free cashflow. There are no accounting funnies such as with Globo or Quindell, and I am perfectly happy with TRAK’s accounts. They’re clean.
Acquisitions – the historic accounting, and profitability are not really that relevant. The company is bolting on various capabilities, and shareholders either trust management to do a good job with the acquisitions, or you don’t. Time will tell if they generate shareholder value or not.
Growth – there is strong organic growth going on at TRAK, so it’s factually wrong to say that all growth is coming from acquisitions.
Management shareholdings are very high, so personally I don’t begrudge them selling some shares n 2015. They still hold multiples of the number of shares that they sold in 2015.
I assume the accounting period the company talked about re an acquisition was just management accounts. Again, why do you go completely over the top, and start calling them liars? Totally inappropriate.
Did the share price of TRAK get ahead of itself? Yes, definitely. People paying nearly 400p a few months ago were nuts. That said, I bought this week at 219p avg, and at that level I think it’s a good investment.
Interim results were excellent, and the outlook statement was also excellent. So it seems on track to meet broker forecast for this year. The accounts are clean – profit is real.
I think you’ve drawn a blank here Tom. You’re trying to create a shit storm where there really isn’t anything wrong, other than a perhaps rather toppy valuation, which has since corrected.
It’s great when you attack blatant frauds like Globo or Quindell. It’s not good at all when you wildly exaggerate largely spurious points at a good company, and scare people into selling. I suppose I should be thanking you, as you handed me an excellent entry point on a plate, and am already in profit. But I feel sorry for the poor bugger who panic sold his cheap shares to me.
This is sub-standard compared with your usual work. Targets need to be chosen more carefully, in my opinion. Suggesting wrongdoing where there isn’t wrongdoing just erodes the credibility which you built up exposing proper frauds.
Regards, Paul Scott.
Drunken Sailor
Tom, MXO was valued at £8M before this fundraising debacle. Now over 2/3rds of the company has been given away to raise £2.5M. How is that a good deal for existing shareholders? Why buy shares in a company that treats its shareholders in that way. It was not a case of we raise the money right now and have a chance or we do not raise the money and go bust tomorrow. They had a choice and they chose to screw existing shareholders. They could have said we are not prepared to give away over 2/3rds of the company, we will pull our horns in, that may mean we lose a deal, which at current oil price probably is not worth doing and we will wait until we can get a decent deal for existing shareholders and probably a better deal on assets as there will be plenty of assets going cheap as the oil price slump continues. CLNs previously convertible at 4.5p are now convertible at 0.5p so it is not just the dilution of the placing there is future dilution in there too. Overall they will end up giving away 3/4 of the company to do this one deal which is uneconomic at current oil price anyway.
Drunken Sailor
Paul,
Yep mistakes happen in RNSs. But when they are noticed, particularly important ones relating to finances, the RNS gets reissued with the correction highlighted. Why no reissue of the RNS and why is the PR man blathering on about well it depends on what you mean by net cash rather than saying, it was a cut and paste cock up, I will get a correction issued?
Does not smell right.
Too many companies use growth as the excuse for not generating cash. Sometimes it is valid but often they are overpaying for acquisitions and capitalising costs that really should not be capitalised to create the illusion of growth. Auditors just take the word of the directors for the carrying value and do not bother to check to see if they should be impaired.
I agree Tom has not yet presented conclusive evidence to fully justify his stance yet, but I suspect over time he is going to. Given that there is no need to own every share, I would be watching this one from the side lines until I see real cash generation and an end to regular fundraises.
VINES
‘‘This is sub-standard compared with your usual work.
Regards, Paul Scott.’‘
not even a kind regards just regards, what a kick in the goolies
Paul Scott
Drunken Sailor – I agree. The mistake in TRAK’s RNS over gross/net cash should have been spotted, and a corrected RNS issued. It sounds to me as if Reg (their PR guy) was caught on the hop. Bottom line is that TRAK is not some dodgy AIM PoS – it’s a quality growth company, with great management, who are trustworthy in mine & most other sensible investors’ opinions (I know a lot of smart investors who hold this stock, and have met mgt). It’s poles apart from the sort of companies that Tom usually covers.
It’s generally a good idea to be sceptical, but (as displayed in this instance), there is a tendency for people to jump to incorrect conclusions if they spot something apparently untoward.
I don’t think the bear case has produced anything of any significance whatsoever. The points raised are largely irrelevant to where the company is going, and the strong growth being reported. The profits are real – check the last interim results for yourself. The company capitalised £581k in development spend in H1, versus an amortisation charge of £282k, so the benefit to the P&L was only £0.3m – compared with £1.5m in adj PBT. So in fact, only a fifth of the profit came from the benefit for capitalising costs. The rest was real profit, on a conventional basis, for H1 only, and with the outlook statement indicating that revenues for H2 are expected to be “considerably ahead” of H1.
The market doesn’t value rapidly growing companies on free cashflow! Tom made this mistake on BOO as well – it’s nonsense. Companies like this churn out FCF once they are mature. But during the rapid growth phase, they don’t.
TRAK has issued equity in a fairly well controlled way, given how rapidly the company has expanded. The avg share count was 19.2m in 2011, and that has now risen to 34.0m. So share in issue has gone up 77% in 5 years, but during that period turnover has risen from £4m to £26m (forecast y/e 31-3-2016), and profit has risen from about £0.3m to £2.7m (forecast) this year, and £5.6m forecast next year. Those forecasts look like being hit (or even exceeded) – on 23 Nov 2015 the company actually said it expected to “modestly exceed” market expectations, on figures that had already been upgraded in Jul 2015.
I just feel the picture that is being painted of TRAK here is completely false. It doesn’t bear any relation at all to the positive trading, and rapidly growing profits that the company is reporting.
I’m hoping to arrange one of my CEO interviews (on the standard format) with TRAK, to give them a chance to respond to PI questions, in the usual way.
This bear raid seems badly misjudged to me. I can sniff out dodgy accounts from hundreds of yards, and TRAK’s accounts are fine. I agree that the accounts of Route Monkey (the latest acquisition) are totally bizarre, and clearly need to be restated. However, that’s irrelevant – TRAK didn’t prepare those accounts – pre-acquisition accounts have nothing whatever to do with an acquirer. TRAK will of course have done their due diligence before buying Route Monkey. I’d like to know more about their rationale for that deal, so the question is a valid one, but I think we should at least give the company a chance to explain, before jumping to conclusions.
@Vines – I never use “kind regards”, always just “regards”, so there’s nothing to be read into that either! I suspect you were probably just joking. Tom is robust in his articles, and is perfectly happy with my robust replies when I disagree with him on certain stocks!! (although we usually agree on most of the crap companies that he writes about. TRAK just isn’t one of them). Bull- bear debates are healthy & a good thing.
Regards, Paul Scott.
(disclosure: I hold a long position in TRAK, avg buy price 219p, after multiple purchases in last 2 days)
peter jones
Just had a quick look through Trak’s Rns can’t seem to find the regular fundraises you speak of, appears to have only been two placings in the past six years, which for an aim company is pretty good, there have been equity issues and some director dealings but nothing to suggest it’s a regular occurrence. The acquisitions appear to complement Traks core service offering to create a complete package. Is the company responsible for the toppy valuation by the market? i would say no, as we all know sentiment plays a huge part in the aim casino, the valuation appears to now have corrected slightly and chances are it’s going to do very well in the run up to the years results. No accusations of fraud or suchlike have been made, as Paul Scott points out seems to be making a shit storm over nothing when there are far more deserving companies on Aim which Mr Winnifrith could be targeting rather than a witchunt against Trak.
Bearfacts
Since you haven’t mentioned it I see Rob Terry has been trading some shares, firstly as you pointed out he bought via Quob Park Esate Ltd and himself more share in Daniel Stewart (DAN) (soon to be delisted) on 19th & 20th Jan.
Interestingly it’s been announced via Imaginatik (IMTK) RNS on Thursday that Quob Park Technoligies Ltd of whom are controlled by Quob Park Estate have sold most of their holding of which was bought off Rob Terry and Quob Park Estate on 17th Dec originally bought for 7.5p and price today 2.88p (closing) so a pretty big loss on value for Quob park technologies I would imagine. (Pardon the pun).
Did they use these sale funds from Quob park tech to buy via Quob park estates some DAN shares …mmmm
All the best…..
Drunken Sailor
Paul,
It comes down to risk appetite. You like higher risk growth stocks for the potential greater rewards. Tom like safe and sound cash generators and they are a much safer bet in the current climate and I like sitting on the fence.
It will be interesting to see how things pan out and the debate is healthy. A lot more people have now heard of TRAK and if they prove themselves may well buy shares.
TRAK does need to watch their step with announcements, now they have appeared on the radar. My advice to the CEO when you see him is get all announcements right in accordance with Financial Services Act 2012 and get a PR man that actually knows what he is talking about – being caught on the hop is no excuse he should have read Tom’s article and been properly prepared to respond. No doubt he charges the company a tidy sum for his services – he is not delivering value for money, get rid.
Paul Scott
Hi Drunken Sailor,
I agree with most of what you say there. Although I get on very well with Reg Hoare, the PR guy for TRAK, he’s one of the best & most decent PR people out there, as Tom mentioned in an audiocast earlier this week. But I agree that on this point he seems to have been too vague & not explained the mistake clearly – although neither of us was party to the telephone call, so we’re just guessing there.
To clarify, I invest mostly in value-style companies, and GARP. I see TRAK as a GARP share around my entry price (219p avg), based on it achieving forecasts for the current year, which it is on track to do so. We then need to reassess the valuation, based on those figures when they come out.
I think another aspect that has been missed, is that TRAK is a big innovator, so new products are really what should drive the upside. I like that TRAK mgt seem to be very forward-focussed, rather than just developing me-too products, in a crowded sector.
It’s all about whether you back management or not. There’s a very long video of them presenting to investors here: https://www.youtube.com/watch?v=SteJF0dm2i4 They’re not even remotely spivvy, as you can see.
Regards, Paul.