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InterQuest – trading update following offer closed. What now?

By Steve Moore | Tuesday 29 August 2017

Disclosure: I own shares in one or more of the stocks mentioned. 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.

Following short-term negativity right as the executive management team were trying to buy the company, there is now a further trading update from InterQuest (ITQ). This follows the offer closing earlier this month with 58.32% acceptances (that including the 32.36% interest of founder and Chairman Gary Ashworth) and the independent director, noting the intention statements made in the offer document, having reminded that AIM cancellation requires 75% approval

The latest trading update notes “challenging” conditions, in specifically contracting, in the significant financial services market as well as that significant underperforming divisions “are taking longer than expected to turn around”. Hmmm – any of the latter attributable to management buyout distraction?

It is admitted, “better performances in its public sector, solutions and North American search market” but;

“The company today confirms that like-for-like Net Fee Income for the six months to 30 June 2017 was down 14%... Total Earnings before Interest, Tax and Amortisation before exceptional costs decreased by 19% to £1.3m… EBITA for the year to 31 December 2017, before taking into account approximately £0.5m of costs incurred in the failed defence of the bid by Chisbridge Limited, will be approximately £3.1m.”

That clearly trying to make it out that the £0.5 million of bid defence costs was in waste. However, the offer seemed to materially undervalue on a number of bases and there is currently still the stock market listing for investors.

Is this part of moves to attempt to get to AIM cancellation? We’ll see, but having admitted “solid sector fundamentals which underpin the business in the longer term”, I continue to hold and consider that the management buyout attempted robber barons can continue to sod off.

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