2929 days ago
Lucian will be here soon so I thought Id better record ahead of our trip to the Conservative Club with its tempting cheap beer. On the agenda I fail to mention that Finncap are complete and utter bastards but they are. I do, however, cover Ruspetro (RPO), Gulf Keystone (GKP), SeaEnergy (SEA), Rose Petroleum (ROSE), Sierra Rutile (SRX), Burberry (BRBY), Mothercare (MTC), a couple of Paul Scott jokes - please do not tell me he has any friends in the Mothercare management community that he thinks I may be offending - as well as a word or two on Challenger Acquisitions (CHAL)
4011 days ago
Fully listed Ruspetro (RPO) is the sort of company that should be on the cesspit AIM market – in fact its track record to date would put even parts of AIM to shame. Although the company – at 39.25p – is valued by the market at £140 million it is in reality already controlled by its banks – the equity is grotesquely overvalued.
As a reminder this was the company that served up a bullish trading statement in late November only to issue a grim profits warning at 6 PM on the Friday of the week between Christmas and New Year. It then announced it would refinance its debt via a bond issue. And then said that it was not going to. It really is a laugh a minute with our comrades from Siberia.
4062 days ago
As you may have gathered, I am increasingly of the view that London’s Alternative Investment Market is, to use the technical term, buggered. It is heading the way of the old USM (younger readers please do a Google search). Those who could save the day are simply too busy instead grubbing out deals to pay their bloated wages and expense bills, to make the changes needed The situation gets worse by the day…
Less than 20% of the companies on AIM are profitable. Such is the poor quality of many of them, and so limited is their earnings visibility, that I would not bet more than a few of Evil Knievil’s increasingly worthless Ruspetro shares on many of those 200 making a profit this year!
Chatting to Nigel Wray, “Britain’s Buffett” over the weekend, he made it clear that he had not invested in any new companies on Aim for several years. That says it all. Wray, arguably the UK’s most successful small cap investor of the past thirty years, would rather invest in private companies than on stocks listed on AIM. Why is that? Because Wray is an investor not a gambler.
4076 days ago
Fully listed Russian Oil producer Ruspetro (LSE:RPO) first came to my attention when it issued a disastrous profits warning at 6.3 PM on the Friday of New Year week. It thought no-one would notice? I did. Coming just six weeks after an upbeat trading statement that RNS was a horror. Then there was the announcement of a debt for equity and debt refinancing package. But that fell through too. And today there is another shocker. Those who own shed loads of these shares like my fat friend Evil Knievil keep on telling me that things cannot get any worse. And then they do.
4097 days ago
Russian Oil producer Ruspetro (RPO) has served up another shocking statement this morning – its habit of delivering nasty surprises does not change. Having advised a short at 83.5p on January 4th I suggested on 25th of January that having refinanced its debt it was “merely one to avoid.” The shock today is that it has decided not to refinance its debt or to undertake the partial debt for equity swap announced on January 25th. This leaves its cash position looking very tricky indeed and at 50.5p the shares are once again a sell.
The announcement today is brief but shocking none the less. It reads:
4106 days ago
Russian Oil Producer Ruspetro (RPO) has announced a partial debt for equity swap and refinancing of its remaining debts. This is good news. However before those who ignored my advice to sell at 83.5p on 4th January after an almost comical well after hours profits warning start to celebrate this company still faces serious issues. The shares have bounced back to 49.5p but while they are no longer a short I would still regard them as one to avoid.
The profits warning was release, as you may remember at 6.30 PM on the Friday of New Year week when nobody was meant to be noticing. Coming less than six weeks after an upbeat trading statement it left the management team with zero credibility and it will take an awfully long time for that to change. I flagged at the time that the company had serious balance sheet and ( lack of ) free cashflow issues and the latest announcement partially solves that.
4125 days ago
I note that your esteemed editor was hoping to buy shares in Ruspetro at sub 60p on Monday following the company’s shock profits warning at 6.30 PM on Friday 3rd January. He was denied as the shares never got that low – they are now 63.25p. But I think the boss may yet get his chance… My helpful suggestion is that he declines to take it. This whole company stinks.
A reminder – On 19th November the company published a bullish trading statement saying that output was 7,853 bopd and that it was on track to hit 10,400 bopd by the calendar year end. Good news all round. Fill your boots. Congratulations to my fat accountant, Evil Knievil who was long (oops!). But then on January 3rd ( a day when few folks were working) the company announced at 6.30 PM (when even those folks were on their fifth pint at the pub) that output was actually 6,540 bopd and that it continued to “experience slower than anticipated production growth due to additional modifications required to surface field equipment and curtailed well completions in December.” It blames “technical challenges in stabilising condensate from hydrocarbons produced.”
4128 days ago
Ruspetro (RPO) has already served up a profits warning in 2013 and for its timing as much as its substance it is already in line to win an award for the biggest shock of the year. The share price at the close on Friday was 83.5p, valuing the firm at £278.4 million but given that the release went live at 6.30 PM the stock will be hit hard on Monday. At what point should you buy if at all?
6.30 PM? Yes that is not a typo. To release a profits alert on a 3 day Christmas week is band enough. After hours is poor form. But to sneak it out at 6.30 PM on a Friday when the few people who were at work last week were already onto their third after work pint is quite shocking behaviour. A management team that serves up such an announcement will need to prove itself consistently for a good period to regain the trust of investors.
What makes it worse is what the statement actually said.
