$BLNX.L – Blinx – half yearly report

Internet company BLNX (Blinx) issued an RNS today (http://is.gd/vKIGP0) for their first half. I had written about them nearly a month ago (http://is.gd/eYNYCg) when I thought that they should be avoided.

The shares were up 3.6% in very early trading, but they have since dropped 2.2% to 26.9p. Revenues declined to £106.0m in H1 from $111.6m in H1 from previous year. Adjusted EBITDA was $1.0m, down from $18.2m. Loss before tax was $9.7m compared to profit of $15.2m previously. The company puts a good spin on things, but I’m not convinced.

My opinion on BLNX hasn’t changed. Its returns on capital are too low, it has been raising a lot of money, it’s listed on AIM, and too many of the directors have foreign-sounding names. Racist? Maybe, but it arouses my suspicions.

Go back a few years, and the company was trading on a PE of 35. It is now 6.7. The market has clearly changed its mind about the prospects of BLNX.

Oh well.

Update 11-Nov-2014: I see Blinx’s house broker Numis has downgraded their price target today to 33p, with a recommendation of Add. Back in April they had a target of 217p. Shares are currently 27p. Either analysts have no idea what they are talking about, or they just pluck the numbers out of thin air. Not that I haven’t  over-delivered abundantly on my quota of mistakes, mind.