Far be it from me to hold a grudge but I thought I’d take a look back at one of the worst businesses that an investor could ever hope to plough money into: Savannah Resources (LSE: SAV).
The last time I had a look at this value destroying entity the share price had plummeted over 15% in one day.
But that is small fry when you consider Savannah’s previous misdemeanors:
- an operating loss of £1,917,190 as well as a ‘comprehensive loss’ of £2,191,872 due to the write down of an investment into another mining outfit Alecto Minerals Plc for the period end 31 December 2015
- capitalising as an intangible asset £18,643 of directors’ remuneration in relation to the provision of specific technical services
- and very many placings to dilute the equity nicely for existing shareholders
Interim results released 30 September 2015 for the six months ended 30 June 2015 show more of the same and worse since administrative expenses are more than the previous year as is the near 100% increase in operating loss:
Turning to the balance sheet we can see that Savannah is still up to it’s old tricks: intangible assets have ballooned and current assets have shrunk from the previous period making the balance sheet noticeably weaker.
For example cash and equivalents are down from £1,778,338 at 31 December 2014 to £396,547 by 30 June 2015 – that is an impressive cash burn especially for a business that still does not generate ANY revenue.
With the share price now at all time lows of 1.5p I’m kicking myself for not shorting this tedious little stock at 4p when the rampers where at full steam pouncing on the Rio Tinto JV.
Hopefully you had the good sense to do so.