E Stunning Market Debut

The results data from page 211 are all in the home currency of Scotland, the pound sterling, and they are all in 3-digit millions without any 100s or thousands.

For 2020 adjusted earnings came in at £484 mn, off exactly £100 mn from 2019. Asset management was not as badly hit as insurance. Then adjustments were revealed to get a figure for pre-tax profits, a total sham. The tax credits received by SLFPY were huge and treated as profits along with losses from discontinued operations. As a result, pre-tax profit in 2019 was chopped to £299 mn while that for 2020 was boosted to £823 mn.

But what is on page 211 is not on the cover of the report. It gives investment performance by the funds at 66% over the past 3 years vs only 60% for the 3-years to 2019. It gives an adjusted net profit before tax of £487 mn nowhere in the above muddle, and £584 mn for 2019, as in the above paragraph. It claims International Financial Reporting Standards before tax profit in 2020 of £438 m vs a mere £242 mn in 2019. It then rather gives the game away by setting 2020 dividends at 14.6 UK pence, down from 21.6p in 2019.

How can you trust a fund manager who engages in this kind of obfuscation with its own reported results? I sold my SLFPY today at the market price of $15.95.

*Höegh LNG reported on 2020. The carrier reported flat income at $335.14 mn from prior year and operating profit before depreciation and amortization up 4% to $225.4 mn. Operating profit was up 4.8% to $113.1 mn but after-tax profit plummeted to $146,000 from prior year's $8 mn. Per-share EPS was negative 50¢, down from 30¢. Its debt barely budged but it lost heavily on cash flow from investing activity, -$15.75 mn but better than 2019's level of $183 .2 mn. However net cash flow from financing activities was negative $244.96 mn, up from negative $13.36 mn in 2019. More comment later from Joe Shaefer if he writes this up. It is not pretty but it is not fake either. We own this share not only for its dividends but also because its cold LNG cuts greenhouse gases for freight and the ships carrying it. HMLP.

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William K. 1 month ago Member's comment

Very interesting