Monday, September 5, 2016

When A Company Issues A Press Release At 11:40 P.M., It's Usually Not Good News (Rocket Internet: RKET)

The company priced its IPO at 42.50 euros on October 1, 2014.
€17.54 last.

From FT Alphaville, Sept. 2:

Participants in this session were: Paul Murphy and Bryce Elder...
       ...PM So, finance wise
PM Rather than starting in the UK
PM Can we go directly to Germany
BE Oh, here we go.
PM Well…
PM Rocket
PM We were wondering why it was going up each day
PM And now it’s not!
PM Stick trading at just over 17 euros, live
PM Down 9 per cent
PM This is because it put out a profit warning at 20 to midnight, last night
PM Why the timing? We are not quite sure
PM Might as well share the statement in full
PM As full as it is
PM Cos there’s not much detail here
Rocket Internet SE: Special Items Weigh on Results for the First Half of 2016
- Consolidated loss of EUR 617 million in the first half of 2016
- First half 2016 results negatively impacted by special items, in particular at GFG
Berlin, Germany, September 1, 2016 – Special items, in particular due to impairments at Global Fashion Group S.A. (“GFG”), weighed on the results of Rocket Internet SE (“Rocket Internet” or the “Company”) in the first half of 2016. As a result of the last funding round for GFG, which was announced in April 2016 and which closed in July 2016, GFG wrote-off goodwill and intangible assets. GFG contributed negative EUR 383 million to the Rocket Internet’s first half year results. The result was further impacted by special items such as impairments, fair value adjustments and – to a lesser extent – positive special items. Overall, the consolidated loss for the first half of 2016 was EUR 617 million.
As a result of deconsolidation effects, group revenues in the first half of 2016 decreased to EUR 29 million compared to EUR 71 million in first half of 2015.
“Despite these special items, we remain committed to our goals”, says Oliver Samwer, CEO Rocket Internet. “We still expect at least three of our selected portfolio companies to turn profitable by the end of 2017, and that the aggregate EBITDA losses of the selected portfolio companies will have peaked in 2015. “
Rocket Internet will report detailed results for the first half of 2016 on September 22, 2016.
BE Cripes!
PM We have to wait another three weeks for the proper figures
PM Worth reading this, in the Indian press
PM That’s Mint, the WSJ venture in India
PM First of a three parter
BE What’s GFG? Global Fashion Group, isn’t it?
PM Yeah
PM Ragbag of online fashion brands
BE With offices at One Berkeley Square, if I remember right.
BE No slumming in Shoreditch for them.
PM Yeah, was supposed to float, but hasn’t and won’t any time soon
BE Yep, it’s “worth” two-thirds less than it was.
BE Jefferies ….
One of our biggest concerns with RKET was its overconfident valuation methodology, LPV, which saw its valuation of one of the largest assets in which it has a stake, GFG, cut from €3.0bn to €1.0bn on 27 April. Despite the macro environment being out of its control, the more conservative valuation methodology at KINV meant its valuation only reduced by 38%, versus 66% at RKET.
BE Yes, losing €2bn from a €3bn company in five months with no significant changes to operations in that period will raise a couple of questions about your methodology....
We have had a few posts on the wonder that is Rocket, here's the blog search results page