The 600 Group (LON: SIXH) shares are down 40% in London today. SIXH shares are down on news that they’re likely to be suspended soon enough. Which isn’t good news and repeats our long standing insistence that liquidity is valuable. As we’ve also pointed out these sorts of suspensions can be a speculation opportunity. But there’s a proviso attached to that.
Here’s the announcement: “As stipulated by Rule 19 of the AIM Rules for Companies (the "AIM Rules"), the Company is required to publish its 2023 Annual Report by 30 September 2023. However, the Company confirms that, as a result of internal personnel changes within the Group, the Company's new auditors will require additional time beyond the originally planned timetable to complete their audit and, as a result, the Company no longer expects to be able to publish the 2023 Annual Report by 30 September 2023.” So, the shares will be suspended from 2 October until those accounts have been published.
Now, as we’ve said before, these brief suspensions can be an opportunity. The suspension scares many shareholders away, the price drops before the suspension. On relisting the share price rises again. So, for those willing to hold something illiquid for a couple of weeks there is that opportunity. But this does rather depend upon it really being only getting the accounts together than is the problem. If things are worse than that - the books are in a complete mess, or there are basic business problems there - then selling out before the suspension is the rational thing to do.
The 600 Group share price from Google Finance
#So, do we have any guide here? Is it just getting the numbers together? Or is there a problem with the actual numbers? “Since the Company's trading update announced on 24 May 2023, trading conditions have continued to be difficult. As a result, the Board now anticipates that the Group will continue to be loss making at an operating level during the six months period ending 30 September 2023. As a result, it is now expected that impairment adjustments will be required to the value of goodwill and related intangible assets as at 31 March 2023. The Group is considering various financial alternatives to its existing debt facilities which currently expire on 30 November 2023.”
Ah, yes. We think this is one we might revisit right before the suspension. If the 600 Group shares have declined considerably from their current levels then we might think about a small punt on it being just the mechanics of the numbers and not the numbers themselves. But presently, hmm, no that’s actually looking quite bad.
