7:29 cut – WEY, FUL

Wey Education – FY Statement

Wey report FY to 31st August 2019 revenues at over £6.0m vs a broker forecast of £5.0m, which they recognise is “significantly ahead” of expectations.

In my last piece on Wey I speculated that revenue was likely to be tracking significantly ahead of expectations and that this may precipitate an early trading update. When this did not transpire I re-confirmed by assumptions to be for turnover of £5.45m. Since I have no reason to believe that Wey did not consult their Nomad as the requirement to update the market earlier, I will be re-examining my assumptions here.

On profitability they merely say that “adjusted” profit will be at least in line with market expectations despite higher advertising spend. This implies that they acknowledge that advertising is an ongoing requirement and will not again be treated as an exceptional cost thereby flattering reported profits. Perhaps because the profit is close to expectations they did not feel the need to update the market earlier?

The revenue outlook for FY 2020 is surprisingly downbeat. My projections showed them likely to beat them even from a FY 2019 base of £5.4m. With additional money than previous budgeted being funnelled into advertising and some early anecdotal evidence that their current advertising strategy is working, they now look sure to beat both WH Ireland revenue projections of £6.7m and my earlier projection of £6.8m.

Conclusion: Of course this is a great update and I will be attempting to buy more first thing this morning. It is currently my largest position.

Fulham Shore – AGM Statement

I am at their AGM today and will comment further later.

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