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 e-procurement software provider, EU Supply (EUSP) are currently a further more than 17% higher, at 17p, on the back of a “Framework agreement signed” announcement. Hmmm, a framework agreement – so no specific financials then?
Er, nope – it is stated that this is a 3 year agreement (with a customer option for a further year) “with an existing customer for additional services” and with “a total value of up to €3.6m” (i.e. it could be materially less). Discussions on specific orders to be delivered in 2017 and 2018 are noted to be “ongoing”.
Hmmm. Results for 2016 showed a pre-tax loss of more than £1 million on revenue of £3.4 million, net current assets reduced to just £0.34 million and a net liabilities position of £0.80 million.
Broker to the company, Stockdale, is currently forecasting loss reducing to £0.1 million on revenue of £4.3 million for the current year and “see risks on the upside to our sales forecasts”, including noting additional sales traction likely with EU directives on e-procurement to come into force by November 2018.
However, this compares to a current market cap of £11.5 million – which already looks to discount significant future progress. Admittedly, my previous caution here has seen significant gains eschewed in the last year but I remain of that view and currently continue to avoid.
Never miss a story.
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Comments are turned off for this article.
Search ShareProphets |
Stock market news |
Recent Comments |