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Nature Group – shares down more than 30%, the attempted spin working well then!

By Steve Moore | Friday 19 December 2014

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.

Taking a look at today’s “Trading Statement” from Nature Group (NGR)… “Contract win”, oh good, “conclusion of the case brought in the Gibraltar Magistrates Court by the Factories Inspectorate against the company's subsidiary… a fine of £120,000… Expects to be fully operational again during Q3 2015”, OK, “the company has seen only a marginal improvement in trading across all divisions and its financial performance has been further, adversely impacted by delays to certain expected revenues during the period”, Uh Oh…

The company accordingly expects results for 2014 “to be materially below current market expectations”, with “a loss before tax in respect of the second half of the year close to that reported for the first half of the year” (£1.01 million). Despite the attempted spin in the ordering of the announcement, the shares currently trade more than 30% lower at 11p, capitalising the company at £8.7 million.

Combining port reception services/facilities, offshore treatment services and the latest sustainable waste treatment technologies, Nature’s CEO reckons “fundamentals remain underpinned by the ongoing trend of environmental legislation and the continuing increase in the recognition of the efficacy of our unique offshore treatment technology”. Where have I heard similar sentiments before?, Oh yes…

27 May 2010 – Revenue £5.06 million, Profit £1.57 million
“The board remains confident of further progress in 2010 and beyond.”

25 May 2011 – Revenue £6.83 million, Profit £1.53 million
“Opportunities for the group are widespread. Our resources as enlarged by the acquisition of International Slop Disposal BV… The current year and beyond will be significant in fulfilling returns to our shareholders and the leadership position for our sector that we aim to establish internationally.”

06 Jun 2012 – Revenue £15.05 million, Profit £1.12 million
Commenting, Chairman Bernard Muller said: “We made great progress in the integration of our two companies and in furthering our expansion plans but saw our reported results severely impacted by the as yet unresolved insurance claim relating to the accident in Gibraltar.”

14 May 2013 – Revenue £14.30 million, Profit £146,393
Commenting Nigel Sandy, Chairman, said: “2012 was a challenging year with an ongoing squeeze on volumes and margins in the international shipping markets as well as a number of operational reorganisations but we are pleased that our volumes have held up as we continue to deliver a high level of service to our customers. However, the contracts we are now winning gives me confidence for the results this year.”

08 May 2014 – Revenue £21.78 million, Loss £11.02 million
“After consultation with our auditors and extensive discussion by the board we have decided to write off the consolidated goodwill created when Nature Group Plc merged with International Slop Disposal BV”… Commenting Nigel Sandy, Chairman, said: “There have been challenges faced in the Maritime division as we invested to meet changes in legislation, and delays in bringing operations in Gibraltar back online. However, with planning approval and the resolution of our insurance claim we can now look forward to operations in the future with confidence.”

In today’s talent share parlance, currently, for these shares, it’s a no from me!

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