By Steve Moore | Saturday 12 August 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.
A 10:35am results announcement from Vitesse Media (VIS). Not a portend for a positive announcement I’d suggest - and then 36 minutes later a “Directorate Chg, Hldgs in Co, Proposed Fundraising” announcement. Hmmm…
With a change of financial year end, the results are for the 14 months to 31st March 2017 and show a “normalised” loss of £28,776, up from £15,731 in the prior year, despite revenue of £2.7 million, up from £2.1 million. After ‘exceptionals’ the loss was £205,560 compared to a prior year £204,046.
The company though emphasised “a strong improvement in cash from operations” - and the cash flow statement shows net cash generated from operating activities of £193,784, from a prior year £29,208. Despite though the statement also including “seeking to increase transparency”, no detail on the swing from P&L loss to the noted operating activities cash generation is provided!
I though note the balance sheet shows a £27,536 decrease in receivables, to £381,848, and a £252,189 increase in payables to £976,667. With particularly also £116,000 of cash and £147,989 of borrowings, there was a £0.62 million net tangible liabilities position. However, the company argued “we have been building on the prior year's success” and that “the business is in a much stronger position than it has been for some time”!
At that point, I’d argue it looked more like disaster ahoy - though this was followed 36 minutes later with another announcement. This informed of the appointment of co-founder and former CEO of investment bank Liberum, Simon Stilwell, as CEO with immediate effect, with Niki Baker moving “to focus on expanding the company's flourishing events business”. It also detailed some share transactions – including, at 2.5p, Stilwell acquiring £159,345 of shares and, in a personal capacity, fund manager at Liontrust Asset Management, Anthony Cross acquiring £175,345 of shares – and also that “subject to shareholder approval it is considering an issue of new ordinary shares by way of a placing to raise up to £2.0 million, the proceeds of which will be used to repay the company's current indebtedness and for working capital purposes”.
Wow – a lot can happen here in 36 minutes it would seem! I particularly remind of that time prior the company was arguing it in “a much stronger position”! The “working capital purposes” are to include “the provision of media and equity research for both institutional and private investors”, with it also added that “the company has been informed that Messrs Stilwell and Cross intend in aggregate to invest £0.5 million in the proposed fund raising. A further announcement will be made in due course”.
The net result for the shares on the day is they closing up approaching 50% at 2.75p. However, with it placing ahoy and the results having shown increased losses, for now I’ll be avoiding.
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