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EXCLUSIVE: Daniel Stewart reveals all (unintentionally of course!)

By Cynical Bear | Wednesday 11 April 2018


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.


I had to laugh at the basket case that is the stockbroker Daniel Stewart as it finally came out with the accounts for its trading subsidiary, Daniel Stewart & Co (DSAC), for the year to 31 March 2016, not just as it shows how worthless Rob Terry’s holding is but also, being such a quality outfit, it accidentally provided much more information than it intended to. It is worth taking a look before Daniel Stewart corrects it.

The accounts have been filed at Companies House and can be accessed HERE. Any followers of this stock (see HERE for this website’s detailed coverage) will be well aware of the struggles that Daniel Stewart has been through evidenced by these accounts that show that in the year to 31 March 2016 revenues dropped from £3.8 million to £2.1 million and the operating loss increased slightly from £1.1 million to £1.2 million.

The business has been supported by Epsilon Investments who lent it £1.74 million but most of that has now been converted into equity and Epsilon is now the 90% owner of DSAC with the former listed entity, Daniel Stewart Securities plc a mere 10% holder. This means that Rob Terry as well as all the other poor holders have had their interests decimated literally.

The issue though is that 31 March 2016 is such a long time ago and what everyone wants to know obviously is what has been happening since then. Well, your luck’s in! I’m assuming unintentionally, someone at Daniel Stewart has been kind enough to attach two pages of recent management accounts to the back of the filed statutory accounts which is ever so helpful, including both P&L and balance sheet information and a few handwritten scribbles too. People always say that the best information is at the back of the accounts.

We can see that in the year to 31 March 2017 the revenues dropped further to £1.6 million leading to a bottom line loss of £1.4 million. It also includes a month by month performance for the year to 31 March 2018 with actuals through to 31 January 2018 and a forecast for the last two months of the year. Interestingly revenue remains about the same level of £1.6 million although that includes a £500,000 forecast for February and March which seems unlikely; however, assuming that is the case, the business still loses £530,000 so at least there has been some cost-cutting but that’s about all one can say.

Turning to the balance sheet, it shows the actual position as at 31 January 2018 with cash down to £32,000 and a net current liability position of £184,000. So the business is clearly in need of urgent further support from Epsilon and the directors have satisfied themselves that such support shall be forthcoming apparently. Perhaps someone else could support? Interestingly, there is reference to an old loan of £750,000 from a certain Nadazhda Obolentseva, whoever she might be – perhaps she can help out again.

Poor old Rob Terry though, he’s going to get diluted even further!


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