The Evil Diaries: “Feast upon the cadavre”

4 mins. to read
The Evil Diaries: “Feast upon the cadavre”

I have very recently commented on the big unravel coming at Mitie (MTO) and was surprised that the stock recovered to 281p at COB last Friday. Anyway, Saturday’s DMail finance section leads on delays now being encountered at Mitie on paying up arrears of pay where Mitie had underpaid in the sense of below the minimum wage. Apparently, or so the DMail commented, HMRC staff are on holiday for Easter wekeend and cannot sign off the extra payable (just how much is in point?) and, which is even more telling, decide how much of a fine should be levied for breach of the law.

(When the law came in (1998), a chum of mine was running a limited liability company, owned entirely by himself and losing money. He therefore paid himself nothing. HMRC, as it then wasn’t known, advised he was in breach of the law in not paying himself what he couldn’t afford anyway to pay. Kafka was starting to rear his head. In those days, Kafka was merely playing at playing the bloody fool: now he is worshipped for doing just that full time in the regulatory world.)

Anyway, all this is just the taster at Mitie. It’s easy and economic to borrow stock. Feast upon the cadavre.


I got hold of Robert Corden, who used to broke at Charles Stanley and is now retired but, unlike many stockbrokers, is in fact interested in investments. I asked him to comment on Tyratech (TYR and TYRU – my preference is to buy TYR and convert to TYRU) and he very kindly offers the following:

This is an update on a previous recommendation following various announcements, meetings with management and publication of major notes from both the house brokers.

When considering investment in early stage companies (those that are pre-profitable) there are a number of factors to take into account. Does the company have products which could generate sufficient sales and profits to justify a much higher share price; does it have the management capable of delivering those; does it have sufficient cash and lastly have you got the timing right? So I must start with an apology as I certainly got my short-term timing very wrong. That said, I am still convinced that points one and two will be proved correct over time and, if the brokers estimates are correct, there is a reasonable possibility that it has enough cash. If those statements are accurate, then a purchase now could prove very timely.

Turning to the numbers, revenues for 2014 are going to be well below earlier estimates. There are really three reasons for that: the acquisition of Novartis led to lower than anticipated sales; there were stocking problems in the UK and a major contract in the US, which was expected in December has slipped possible to March. These led to a decline in anticipated product revenues in 2014 from $4.0m to $2.8m.

However, both the brokers are projecting product sales of approximately $9m in 2015.  In recent meetings management indicated that they would normally expect 60% of revenues to be generated in H2 and that 90% of product sales would come from the Vamousse range and that 80% of revenues would be from the US. This year, I guess that second half weighting may be more extreme and my number is 70% in H2. If that, and the broker’s projections, is correct product revenues will have grown as follows. For 2014 and 2015 respectively, the half yearly breakdown would be, $0.9m and $1.9m and 2.8m and $6.2m. That is real growth and the other products could kick in 2016 and thereafter. Furthermore, both brokers are projecting net cash of around $1.5m at December 2015 and over $2m at the end of 2016.

Both brokers are projecting sales of approximately $14m for 2016 and both projecting the company will be profitable with EPS of just under 0.5p. Those EPS give a 2016 PER of under 10, which in my view would be too low for a growth company.  That is why, I and my family still own shares.”

Robert issued this note six weeks ago but nothing has occurred since then to cause an amendment to his comments.


I watched BBC2’s The Fixer Revisits on Friday evening. It centres on Alex Polizzi who is Rocco Forte’s niece and, as I have noted here before, really quite attractive.

She visits small businesses which, typically, have succession problems and, in the absence of their solution, are deteriorating. She is really good at cutting to the chase. This means identifying who is prepared to and can do something and then inspiring them to rise to the challenge.

When I was tramping the streets as a practising chartered accountant some thirty+ years ago this style of wise analysis struck me as really worthwhile to the buyer and, for me, as vendor, immensely satisfying.

I think Ms Polizzi does it better than I did since she thinks on a broad front – i.e. she is not by disposition confined to figures. Not merely does she understand the people, she has a very strong grasp of what needs to be done and done properly and, typically, straightaway. I wish I could meet her: I’ll try to worm my way into her presence.

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