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Hayward Tyler – reports “continued good progress”, what about the February profit warning?

By Steve Moore | Wednesday 12 April 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.

Hayward Tyler (HAYT) has announced £3.7 million of new order wins, emphasising these “in addition to those already announced in March as evidence of our ability to convert our strong pipeline into order intake”. Hmmm, this follows a profit warning as recently as 20th February though.

The new order wins announcement includes that “we are anticipating revenues for our financial year just completed in the range of £60-65m as previously highlighted in our announcement of 20 February 2017”. However, that announcement included news of contract delays and house broker, finnCap, was previously anticipating revenue of more than £80 million, rising to more than £82 million in the now current year.

On the 20th February profit warning, finnCap updated that now “we anticipate revenues of £63.5m for FY 2017, resulting in a loss of £4.0m at the adjusted PBT level”, with now-current year forecasts placed under review. I previously updated last month – noting also concern of the bank being able to call the shots and at what price a ‘longer-term financing structure’?

Despite all this, on 31st March “share price movement” (natch, all above board!) forced a statement that the company “is currently in the early stages of discussions with Avingtrans PLC, regarding a possible offer by Avingtrans PLC”.

Though still well down from previous levels, this helped the shares reach 58p a few days later – this comparing to a 37p prior day close. The announcement though also emphasised that “it should be noted however that discussions are at a very early stage” – and the shares are presently back below 50p.

Currently Avingtrans (AVG) is required to announce either a firm intention to make an offer or not by 5pm on 28th April – and the risks if it doesn’t see me continue to avoid.

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