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SpaceandPeople – half-year results suggest it’ll be profit warning ahoy!

By Steve Moore & Tom Winnifrith | Monday 26 September 2016

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.

Shares in shopping centre and other high footfall venue promotional and retail company SpaceandPeople (SAL) currently trade approaching 30% lower, at well below 30p, on the back of its results for the first half of 2016.

The results include “loss before taxation from continuing operations £174k (2015: profit £62k)” on “consolidated net revenue £4.65m (2015: £4.77m)”. After particularly also a £0.3 million loss from the now discontinued (“due to insufficient prospects”) S&P+ mass media advertising support business and £0.43 million of dividends paid, there was a £1.15 million swing to a £0.42 million net debt position.

Although, due to the seasonal nature of the retail sector the company is second half weighted, this is already set to see the dividend axed – though the company reckoning “this is intended to be a one year pause with dividends recommencing during the 2017 financial period”.

However, it also states “trading across the group in the period since the half year end has been more subdued than we had anticipated. We will need to perform strongly over the remainder of the year in order to meet our expectations”.

Hmmm. Profit warning ahoy? And with also a CEO who refused to return Tom’s calls when times were better, we stand by our Nifty Fifty call in July to bail on this bad tip at 38p. We doubt we’ll be recommending this one again anytime soon.

TW Note. When times were good the CEO felt he did not need to show a basic level of courtesy. Now he needs friends. Rating this tool a 0/10 on his people skills, the weedy balance sheet and complete lack of earnoings visibility makes this a bargepole stock. 

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