Well, I hardly know where to begin on the accounts to December 2015 published by Watchstone (WTG) today. But the first thing that stands out is that the North American investments, Hymex and ingenie, are not bust. Far from it – there is no mention whatsoever of any concerns on this front. What are they worth? I do not know but I suspect that in relation to book value in these accounts it is substantial despite write downs of goodwill, possibly 100p per share.
Meanwhile, Nav is declared by WTG as 297p which admittedly includes intangibles of 78p per share.
However, nowhere (by that I mean absolutely nowhere) is there any reference to adverse noises coming out of the Slater and Gordon debacle. Indeed, there is the statement “No claims have been received from Slater and Gordon at this stage.” That is not equivocal. The market in recent months has been constantly depressed by the fear of a claim from that company. In addition to which there is a further £50m or 108p a share cash held in escrow where WTG is “….confident that the £50m will be released in November 2016.” That’s another 108p per share which has yet to be credited to WTG’s reserves.
I do not know what this all adds up to but it is comfortably in excess of 400p or 500p. I paid 245p this morning.