UTW – Utilitywise – down 38%

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:

Chart-utilitywise-3162017.png

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.

36.25p

Advertisements

About mcturra2000

Computer programmer living in Scotland.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s