HI Cam,
Mea Culpa,
I stuffed up on Millenium Services Group (MIL) on a recent show. They have an “emphasis of matter in relation to going concern” in the their audit report. IE, they have a qualified Audit. Thanks for picking that up and I should have earlier, too. This means they should not be on the Top Scorer’s list.
I didn’t read the audit report when I was preparing the Stock Pull Apart on MIL on our recent show. I did a deep dive into their Balance Sheet and Cashflow Statement as well as a quarterly statement.
Regardless of that, I did not pick it up a few months ago when it was added to the Top Scorer’s list and I should have. Apologies to everyone for that, but again, it highlisghts that doing your own research is an imperative.
Now that the confession is out the way, the share price han’t done to badly since it went onto the Top Scorer’s list.
It looks like the empahsis of matter wa raised due to Current Liabilities exceeding Current Assets, however, it also looks like circe $20m of long term debt was transferred to Current Liabilities due to an accounting rule that long term debt is classified as short term debt in the year that it falls due. As we know from the Stock Pull Apart, a large amount of debt has been paid down this year.
MIL is in our Dummy Portfolio and I will be watching its sentiment and waiting for results before taking any action on this one. It is up 3.5% since we bought it at the start of July. Let’s see if I can make a silk purse out of a sow’s ear, or whether I need to invoke Rule 1.
I wouldn’t begrudge anyone from Selling this share given the discovery of the Qualified Audit.
Maybe James Oliver could shed some light for us on the Audit Report for this one.