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Kalibrate Technologies – interim results show how ‘bullshit earnings’ were the previously announced EBITDA

By Steve Moore | Wednesday 15 March 2017

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.

After a profit warning in January, CEO of Kalibrate Technologies (KLBT), Bob Stein, is “pleased to report our results for the six months ended 31 December 2016. Hmmm. The shares have responded lower, back below 60p.

The January warning included “first half revenues of approximately $14.0m (H1 2016: $15.9m) and EBITDA of approximately £0.1m” - with I noting it will be interesting to see the detail of the half-year results statement since EBITDA really has been bullshit earnings here.

Having stated “pleased” to report the results, the next paragraph in the statement admits “the financial performance in this first half was lower than planned”. This is with noted revenue of $14.1 million and “underlying EBITDA of $0.4 million (H1 2016: $1.4 million)”. Then depreciation+amortisation was $0.9 million (H1 2016: $0.8 million) and capex $0.7 million (H1 2016: $1.1 million) still greater than this.

Overall, cash was actually $0.9 million higher to $3.3 million – but this only after an unsustainable $2.5 million working capital inflow, though it also emphasised “we remain optimistic about the long-term growth plan of the group and we have a pipeline of potential business to support our short- and medium-term projections”.

However, it is also noted “we remain cautious about the timing of when these contracts may close” - and the recent history suggests it right to be cautious. Sell/avoid.

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