Fulcrum Utility Services... Investors - FCRM

Fulcrum Utility Services... Investors - FCRM

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Stock Name Stock Symbol Market Stock Type
Fulcrum Utility Services Ld FCRM London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
-0.25 -0.96% 25.75 13:15:17
Open Price Low Price High Price Close Price Previous Close
26.00 25.75 26.00 25.75 26.00
more quote information »
Industry Sector

Top Investor Posts

jl5006: Carp not for investors at higher SPs - but helpful.
jl5006: Ivan They dont have the cash. As an investor have you had anything asking you to accept their offer??
topvest: Chris Mills is a brilliant opportunistic investor. Best to back him in NASCIT and Oryx, like I do. It’s obviously a low ball bid, but not massively at undervalue given the shambolic position Fulcrum are in. He always buys low and sells high, which is what we all try to do, but unfortunately not as successfully as him. He won’t be paying up but trying to take control on the cheap. To be fair, management at Fulcrum have gone from one disaster to another, and probably deserve what they are now getting!
jl5006: R & M discretionary clients - Bayford - local investors - IMO Wrong - why?
jl5006: As an investor from 2012 at 14p and 19p I hope that the faith is restored. TV 3 bagger must have been in before I have invested and invested and will hold. Sorry I'm not a day trader - stick with it - read the COY data -not assumptions.
pireric: Can't see it myrl. 50-70% from here would be 38 - 43.5p on the share price That would be 25 - 29x 2020 P/E, which won't happen. Especially as I think investors will probably discount deliverability of the 2021 numbers, but even still that would be 14 - 16x 2021 P/E
magic: FROM INVESTORS CHAMPION "These issues could relate to the acquisition of Dunamis, whose growth potential has been stunted by changes in the capacity market. The EU has suspended bidding in the market (which lets energy generators bid for contracts to provide back-up power to the UK grid in peak times) after receiving complaints that it favours fossil fuel companies. This means Dunamis might not be worth as much as management expected when the acquisition was completed which would force the company to write-down some of the goodwill on the acquisition." hxxps://www.investorschampion.com/channel/blog/aim-star-to-ominous-accounting-whats-gone-wrong-at-fulcrum ------------------------------------------------------------------------------------------------- On the goodwill side of things, it looks like this was £23.5 million from the Dunamis acquisition. Fulcrum assets were listed as £75 million, liabilities £36 million Overall Equity £36 million in the Annual Report. If for instance, half of the goodwill, £12 million was written off, then equity would be down by 1/3. If all £23.5 million were written off, then that would be 2/3. ---------------------------------------------------------------------------------------------------- KPMG AS AUDITOR, PAGE 29 OF ANNUAL REPORT NEW RISK Valuation of acquired intangible assets. ---------------------------------------------------------------------------------------------------- I guess, if the Balance Sheet were to be so much weakened, the company could - do a shares capital fundraising - reduce/ eliminate dividend to preserve capital ------------------------------------------------------------------------- Interestingly, Martin Harrison around 10 years ago, at KPMG described his work as: "Completed acquisition due diligence on a diverse UK and multi-national client base and market sectors including FMCG, manufacturing, retail, IT and engineering." hxxps://www.linkedin.com/in/martin-harrison-676b724/ --------------------------------------------------------------------------- 2018 ANNUAL REPORT, PAGE 50 "The goodwill is attributable to the skills and technical talent of Dunamis’ workforce and the synergies expected to be achieved from integrating the companies into the Group’s existing business. Measurement of fair value The relief-from-royalty method and multi-period excess earning method have been used when establishing the fair value of the intangible assets. The relief-from-royalty method considers the discounted estimated royalty payments that are expected to be avoided as a result of the brands being owned. The multi-period excess earnings method considers the present value of the net cash flows expected to be generated by the customer relationships, by excluding any cash flows relating to contributory assets. The fair value of Dunamis’ intangible assets (brands and customer relationships) has been measured provisionally, pending completion of an independent valuation. If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition identifies adjustments to the above amounts, or any additional provisions that existed at that date of acquisition, then the accounting for the acquisition will be revised." hxxps://www.fulcrumutilityserviceslimited.co.uk/~/media/Files/F/Fulcrum/documents/fulcrum-utility-services-limited-annual-report-and-accounts-2018.pdf
topvest: Yes, I've read as well. A good article. I suspect that some sort of write-down or restatement is coming, but doesn't look like its fundamentally changing the trading position. Not quite on the same scale as some others. I liken this more to the Air Partner mess-up, rather than a really serious issue but time will tell. They have again reiterated the current expectation of unchanged headline numbers, which they definitely wouldn't have done if it was a much bigger mess. Time will tell. One thing for sure, is that they need to get more transparent on adopted assets accounting. It doesn't massively impact the headline numbers, but mixing an asset operator / construction company with an asset owner can create question marks over one side doing business for the other. It also impacts the cash flow because they are effectively building assets in the contractor side (£4.2m revenue in 18) for capitalisation in the pipeline side (£3.5m in 18). What fair value is used and is the profit reversed out? "Adoption of utility assets: Revenue relating to following the adoption of utility assets (included in Infrastructure revenue) is recognised at the point the assets is "adopted", which is when the performance obligation is satisfied. The value at which the revenue is recognised is the fair value of the asset held with the corresponding entry to tangible assets." This is all a bit unfortunate and should be better explained. The pipeline assets are actually very valuable assets, but the way the results are presented is making investors nervous on cash generation in the contracting side of the business, because the message is not being articulated as clearly as it could.
george stobbart: Investors attack Labour’s renationalisation plans https://www.ft.com/content/2ec4e042-7e30-11e9-81d2-f785092ab560
pictureframe: After Fridays fall P/e now just 6 Taken from https://uk.finance.yahoo.com/news/closer-look-fulcrum-utility-services-074238474.html One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. We'll use ROE to examine Fulcrum Utility Services Limited (LON:FCRM), by way of a worked example. Over the last twelve months Fulcrum Utility Services has recorded a ROE of 19%. Another way to think of that is that for every £1 worth of equity in the company, it was able to earn £0.19. Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card! View our latest analysis for Fulcrum Utility Services How Do I Calculate ROE? The formula for ROE is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Fulcrum Utility Services: 19% = UK£7.8m ÷ UK£40m (Based on the trailing twelve months to September 2018.) It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is all earnings retained by the company, plus any capital paid in by shareholders. You can calculate shareholders' equity by subtracting the company's total liabilities from its total assets. What Does ROE Signify? Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else equal, investors should like a high ROE. Clearly, then, one can use ROE to compare different companies. Does Fulcrum Utility Services Have A Good Return On Equity? By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. Pleasingly, Fulcrum Utility Services has a superior ROE than the average (8.3%) company in the Gas Utilities industry. That's what I like to see. In my book, a high ROE almost always warrants a closer look. For example, I often check if insiders have been buying shares . How Does Debt Impact Return On Equity? Most companies need money -- from somewhere -- to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. That will make the ROE look better than if no debt was used. Fulcrum Utility Services's Debt And Its 19% ROE Shareholders will be pleased to learn that Fulcrum Utility Services has not one iota of net debt! Its solid ROE indicates a good business, especially when you consider it is not using leverage. After all, with cash on the balance sheet, a company has a lot more optionality in good times and bad. But It's Just One Metric Return on equity is one way we can compare the business quality of different companies. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have the same ROE, then I would generally prefer the one with less debt.
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