Tuesday 31 March 2015

Mitie (MTO) ... one of three?

Tuesday 31st March 2015

Palm to forehead (THWACK) for holders of Mitie this morning. 

U woz warned ... my Mitie concerns ... Mystery company X

I reckon somewhere below 200 pennies beckons.

Mitie share price
Source: Bloomberg
Of course the bigger reveal will be from its prelims, due to be announced on 18 May 2015. I suspect investors will recoil in horror yet again as weak cash performance is likely laid bare and the receivables shoved in to long term, down the road kind of hopefulness is shown to have grown further still.

Below is a recap of where matters stood at the half year stage. And a reminder of how Connaught's long term receivables grew.

Mitie total amounts recoverable on contracts and other trade receivables classed as non-current assets, £m
Source: Mitie annual and interim reports
Connaught's amounts recoverable on contracts classed as non-current assets, £m
Source: Connaught annual reports
Mitie's free cash flow performance on half year basis and
Bloomberg consensus implied expectation for H2 2015 (March year end), £m
Source: Mitie annual and half year reports, Bloomberg
And another thing
They do say that profit warnings come in threes. I've always found this ring true.

I'm short Mitie.

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  1. Hi Matthew

    New reader here. Do you post to let us know when you close a trade or cover a short?


  2. Hi Matthew

    Any updated forecasts given Mitie's relatively good results this morning???

    1. Hi,

      I saw nothing in the results to discourage me from my short position. Long term receivables continued to rise. Inventories also climbed higher, yet again. And I am unsure what the new £20 million fund they are setting up is required for.