UTW (Utilitywise) issued two regulatory statements today, advising of a trading update, and the early adoption of IFRS 15, send the shares down 38% to 36.25p as of writing. Not all news services seem to be carrying these announcements, though.
I had written a technical analysis on the chart a month or two ago, but it seems to have been lost in the ether. Even before today, the chart was pretty clear that there was something awry with the company:
The chart was saying it all.
I am sure Paul Scott will write about this company over on Stockopedia in his Small Cap Report, so I am going to be lazy today and not even look at the company-issued statements. They are sure to be bad. It seems that UTW will have to hand back a large chunk of money to the utility companies, having over-estimated the amount of electricity that customers would consume.
Leon Boros undoubtedly sums it all up in a nutshell: “Utilitywise’s negative reserves of £11.9m to 2017 means under IFRS 15 accounting it has never made a profit.” That’s all I need to know.
The usual moral of not investing in companies with a shady business model applies here. Another one is: just because Neil Woodford invests in it, doesn’t mean that you should.
I hope nobody became burnt too seriously.