Take this little nugget for example:
In 2014 the Company executed its revised strategy to convert third party associates in the Philippines and Thailand into operating subsidiaries through management control. This will result in consolidation in the accounts which will show an increase in revenue in the year.
It then goes on to state:
The Company therefore expects to report revenue of RM18.25m, an increase of approximately 60% over 2013. Net profit, before exceptional costs relating to the acquisition, is expected to show growth in line with market expectations
Is that 60% growth as a result of the consolidation of accounts or not?
To not explicitly say so is slightly disingenuous which is probably why the market ignored today’s RNS and promptly reduced the value of Rapidcloud stock today by over 3%.
The only line that shareholders need to focus on is ‘growth is in line with market expectations’ which basically means that management have done nothing significant to increase shareholder value.
Shareholders will have to wait until week commencing 25 May 2015 for the preliminary results where management have the opportunity to be more forthcoming about future prospects rater than this:
…trading for the year shows both operational and financial progress with full year results expected to be broadly in line with market expectations for the second consecutive year. We look forward to continuing this progress in the current year with growing confidence
Raymond Chee, Managing Director
Still, if you believe the stated tangible book value of this company it is trading at a huge discount.
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