Thursday, 1 May 2014

Masterskill: shocking loss and insufficient explanation (2)

I wrote before about Masterskill's horrific losses.

The company has announced its annual audited accounts. They do give some more information, but also pose many questions.

A huge impairment loss on their property, plant and equipment (PPE) of RM 71 million based on a valuation report provided by an independent valuer. Not much details are given. One issue that pops up is: property prices are record high, so one would expect higher valuations, not lower valuations. The impairment loss sounds rather puzzling.

Again a large impairment loss, this time on goodwill, again not many details.

A huge impairment loss on Trade and other receivables. Last year was already high, RM 24 million on a turnover of RM 149 million (16%), this time RM 38 million on a turnover of RM 59 million (64%). Again, not much details provided. Did the company book it's revenue too aggressive in previous years?

More impairments, this time on the property held for sale. Again, property prices are near their highest, why these impairments?

Very large impairments, not much detail given. Given the hugely disappointing performance so far since its IPO, I think shareholders deserve a much better explanation. For instance, when where the previous valuations done, when were the assets (property) acquired?

Hopefully the annual report will give more details.

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