You will probably not have heard of BigDish plc (DISH) unless you have read my exposes. It is a small and insignificant Standard Listed tech company. It is really only of interest because of the outrageous behaviour of its CEO. On May 30th he claimed via RNS that his company was “fully funded” and that it serviced more than 150 restaurants. A week later came the placing which was rather startling in light of his previous comments. What was more shocking was, a few months later, the publication of annual results showing massive cashburn and a paper thin balance sheet with net current liabilities. The auditors made it abundantly clear that without the period end placing this would not have been classed as a going concern.
On 17 October 2019 the CEO told Proactive that there was still “a lot of restaurant acquisition”, i.e. more venues coming on as customers. So how many sites does it now have? Er 140. Less than in May. Again that statement seems, if not a lie, downright misleading. Okay it was not made via RNS but it was made and investors may well have been misled. It all rather begs the question can you believe a word issued by a London listed company either via RNS or elsewhere? As ever the regulators appear to do absolutely nothing about what seems to be an open and shut case of breaching the rules. It is why we bears are so important in the financial eco-system. Without us to point out such matters investors would be none the wiser.
From highs of well over 600p to now a suspension price of below 140p both myself and Lucian Miers have been perma bears of PureCircle (PURE), the producer of artificial sugars. The shares are now suspended as the company cannot get its accounts out on time as it needs to establish the size of a write off against the carrying value of its inventory. This will be the third such write-off but this latest one seems to be the largest and has come as a real shock.
Not to you dear readers. We have pointed out that for years the carrying value of inventory (that is raw materials or semi-finished and finished product) in current assets has been well over a year’s sales. Think about it – that just cannot be right, still less when this is a perishable good and some of the inventory refers to product which is more or less obsolescent. PureCircle says that has been “no fraud or impropriety”. Hmmmmmm. I reckon getting a placing away at 280p earlier this year when the inventory level was obviously wrong is pretty naughty. Especially as the long overdue write-down will almost certainly leave the company breaching its banking covenants. I sense those who ponied up at 280p would not have done so had they known all about this and might feel defrauded as a result. But in a market where lying is not a crime I guess nothing is a crime.
This article first appeared on the N50 website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next share tip from Tom & Steve and a new shorting piece this week click HERE
Filed under: BigDish, PureCircle, Tern, i3 Energy, Next, ConvaTec, Nostrum Oil & Gas, N50 website
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