Cavendish Financial Share Discussion Threads

[fenners66] 16/7/2024 13:06

No.
The excerts above ARE from the P&L account
Whilst we generally know that purchased goodwill - positive - is capitalised , added to the Balance Sheet and arguably ignored until and auditor comes along and says , justify why it's still on the balance sheet , and if not write some or all of it off ....
this is the reverse situation , negative goodwill being used as a credit to the P&L account - immediatly.

So if you pay £100 for a £50 note , £50 goodwill , er because it looks pretty , capitalise it and maybe write off the difference one day.
But if you pay £50 for two £50 notes , then leave the "negative" goodwill off the balance sheet and take the £50 gain straight to the P&L

[disc0dave46] 16/7/2024 10:52

Thanks, I know the reason for the negative goodwill but that wasn’t really my question.
The goodwill element will be on the BS not the P&L, yes?

[fenners66] 16/7/2024 10:42

The negative goodwill was basically paying less for Cenkos than it was "worth"

[fenners66] 16/7/2024 10:41

Page 6 Consolidated Income statement

Line 5 - Non-recurring items (52k)

Page 5
Non-recurring costs

Negative goodwill (5,771)
Onerous contracts 2,563
Group restructuring costs 2,026
Transaction costs 1,234

Total non-recurring items 52

[disc0dave46] 16/7/2024 07:50

Wouldn't the goodwill be on the BS not the P&L?

[fenners66] 16/7/2024 07:28

But tha £4.3m of loss effectively does NOT include the non-recurring costs as they also had a non-recurring credit of
£5.77m of negative goodwill.
So even with £3.5m estimate of savings to come that would still leave a loss making company.

There have already been 2 years of "non-recurring" costs , would not be surprised to see more .

Is threee years of non-recurring really non-recurring ?

[disc0dave46] 15/7/2024 13:30

At first glance, a pbt loss of £4.3m doesn't look good. It if I've interpreted correctly the merger hit H2 numbers (from Sept) so there's £3.8m of non-recurring costs associated with the merger, plus they've said on an annualised basis savings of £7m pa. so I'm assuming that means about £3.5m of savings for this FY?.Although staff costs seems high it's only +4% more of income which seems reasonable given the need to hold on to better staff and the rate of inflation.

[boonkoh] 15/7/2024 13:07

I've just added to my position. The dip down to 11p-ish was too irresistible.Comp ratio was 73% for FY24. But was only 68% in H2.Historically, it is 60%. Management have already guided that this comp ratio will normalise in FY25.I see 3p EPS possible for FY25, combination of single digit revenue growth as well as this comp ratio normalising. Very achievable.

[fenners66] 15/7/2024 12:57

Funny you should mention about ".if you are a backwards looking/ hind-sight sort of person, this is no place for you and you should sell now and invest elsewhere."

However if I was a forward looking , read and understand the detail kind of person, I would already have sold a long while back (at a much higher share price) and invested elsewhere.....

It's actually one of those two options I took.

Clue its not option 1....

[boonkoh] 15/7/2024 08:41

Why are the results so short?Surely as a company broker, they should aim to use their results as a showcase of best practice, and publish insightful, lots of data financial reports.For example, Outlook statement should include concrete range of guidance revenue, profits, etc.(I hold in the Boon Fund)

[fenners66] 15/7/2024 08:29

"With Cash of £21million vs £9m, Cavendish are in a healthy position with the merger now bedded in."

So cash up £11,357 k

Except that cash came from :-

"Acquisition of Cavendish Securities plc £11,576 k"

they lost cash at the operating level and their trade and other payables rose over £7.5m, oh and raised £1.54m from the sale of shares.

So the P&L was awful and the cash flow was awful and we do not yet see the details of staff and directors' remuneration.....

[fenners66] 15/7/2024 07:22

Looking at these results , it appears to be a very good example of a company run for the benefit of its staff.
Revenue up.... 46% for the year

But Admin costs up 50% with employee costs 73% of revenue.

Of course they continue to lose money £4.3m before tax and the token Dividend announced , but no real explanation
of how that is actually going to come from future profits rather just burning what is left of reserves.

[adamb1978] 14/7/2024 20:22

Been on my watch list for a while and finally start to go through the numbers. Interested in views on what level margins CAV could get to when at scale.

When I've looked back at the two predecessor entities, 15%-20% EBIT margin looks like was the peak, however PEEL generate margins way in excess of that, sometimes north of 50%.

What's the difference in business composition etc which drives that? Or is it just scale?
Thanks

Adam

[nigelmoat] 05/7/2024 18:19

Good buying interest here the last couple of days. Still think well undervalued.

[big7ime] 24/5/2024 12:47

The corp finance mkt appears to be booming again.
E.g. PEN fundraise today which used Cavendish