French Connection is an interesting company. Once a darling of the high street, it has lost it's sparkle in recent years and, as a consequence, investors have suffered a torrid time. However, the stock is certainly a potential turnaround and recovery situation.
Investors will no doubt be heartened by this mornings trading statement which is encouraging. Sales of their Winter collection have been strong and all other areas of the business are also trading in line with expectations. Importantly, as they continue to close non-profitable stores they will also vacate their Regent Street, London store at the end of March 2016, at which time they will receive a compensation payment of £2.4million, while also removing the on-going trading losses of the store.
Certainly all of this sounds encouraging and they sound pretty confident of meeting market expectations, despite still having the all important Christmas period to come.
The attraction of French Connection as a recovery play has always been the strength of it's balance sheet and whether or not it can achieve a turnaround in it's fortunes before significantly depleting it's cash pile.
In the half-yearly report net tangible assets were around £47.5m with no debt against a market cap., after this mornings sharp rise in the share price, of around £36m.
I'm not a holder or potential investor, but it does look interesting, although what the FCUK do I know?
By the way, I do hope that they have dropped the FCUK branding since it will stop me posting puerile jokes?
Actually, I'd guess they did this some time ago.
AEOREMA
http://cheerfultwentyfirst.exposecms.com/news/global-reach
Sounds encouraging. I am a holder of Aeorema. The company is a profitable, cash generative, dividend paying micro-cap. The company is growing and has a very solid balance sheet with no debt.
Monday 30 November 2015
Friday 27 November 2015
Give 'em that old Razzall Dazzle?
Boxhill Technologies is a micro-cap company that has been on my monitor for a short while, although I haven't purchased any shares in the company. Investors who bought shares in April this year will be sitting on excellent profits since the share price has already multi-bagged during that short period.
The company appears to be making a dramatic turnaround in it's fortunes and reported an operating profit for the six months to 31 January 2015 of £296,000 which compared favourably to an operating loss of £49,000, before discontinued operations and exceptional items, for the six months ended 31 January 2014.
The company appears to be an eclectic mix of businesses and describes itself as a lottery, software, gaming and leisure company.
The balance sheet is ok, although tangible net assets are just over £200,000 against a market cap. of around £6m. At the interim stage the company was cash generative to the tune of £431,000.
The attraction of Boxhill is undoubtedly the sudden growth surge. From the most recent trading update, operating profits are likely to come in around £600,000 to £650,000. My rough calculations estimate that the shares are trading on a very modest p/e ratio of less than 10.
The most recent trading statement also suggests that the current financial year is likely to be even stronger :- "Operating profits continue to increase, not just compared with the year to 31 July 2014, but also comparing the second and first halves of the year to 31 July 2015." Good news indeed.
On the face of it, this looks like a promising micro-cap and despite it already multi-bagging, there does appear to be more to come.
One small niggle might be that Lord Timothy Razzall, the Chairman of the Company, has been a recent seller, although he says that this was to meet personal obligations. He still retains 4.33% of the company.
As I stated earlier, I am not holder and my interests lie elsewhere at the moment, but it's certainly one that merits further investigation. Of course the question is, whilst it's certainly got that old Razzall Dazzle, will it ultimately Razzle Dazzle 'em?
The company appears to be making a dramatic turnaround in it's fortunes and reported an operating profit for the six months to 31 January 2015 of £296,000 which compared favourably to an operating loss of £49,000, before discontinued operations and exceptional items, for the six months ended 31 January 2014.
The company appears to be an eclectic mix of businesses and describes itself as a lottery, software, gaming and leisure company.
The balance sheet is ok, although tangible net assets are just over £200,000 against a market cap. of around £6m. At the interim stage the company was cash generative to the tune of £431,000.
The attraction of Boxhill is undoubtedly the sudden growth surge. From the most recent trading update, operating profits are likely to come in around £600,000 to £650,000. My rough calculations estimate that the shares are trading on a very modest p/e ratio of less than 10.
The most recent trading statement also suggests that the current financial year is likely to be even stronger :- "Operating profits continue to increase, not just compared with the year to 31 July 2014, but also comparing the second and first halves of the year to 31 July 2015." Good news indeed.
On the face of it, this looks like a promising micro-cap and despite it already multi-bagging, there does appear to be more to come.
One small niggle might be that Lord Timothy Razzall, the Chairman of the Company, has been a recent seller, although he says that this was to meet personal obligations. He still retains 4.33% of the company.
As I stated earlier, I am not holder and my interests lie elsewhere at the moment, but it's certainly one that merits further investigation. Of course the question is, whilst it's certainly got that old Razzall Dazzle, will it ultimately Razzle Dazzle 'em?
Thursday 26 November 2015
Today's updates and a share purchase
7Digital announced the launch of new services this morning and a further contract win:-
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12597876.html
The launch of the new services through Mariposa Holdings Group are with two of the largest telecommunications companies in South America: Oi and Algar Telecom.
The company states that:-
"The provision of this kind of mobile music service is key to the Company's growth, and these launches also mark a significant expansion in 7digital's South American business."
Furthermore, 7Digital has also announced that it has signed an agreement with digital multimedia streaming platform Playster, to expand their music streaming service into 15 additional territories.
I hold shares in 7Digital. Currently the company is loss making and cash burn has been quite high, however they appear to be gaining considerable traction and their business model looks promising where they are creating a recurring revenue stream with the associated improvement in gross margins (currently 64%). In their interim report they said:-
"The Company has significant deals at various stages in the contract process, with 63 new prospects as well as existing customers who are looking to expand current services or extend into further territories."
The shares were up 4% on the news.
Netcall released a positive sounding trading update today:-
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12598146.html
They state that:-
"We have had a positive start to the year with the total value of sales orders considerably ahead of this time last year. "
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12597876.html
The launch of the new services through Mariposa Holdings Group are with two of the largest telecommunications companies in South America: Oi and Algar Telecom.
The company states that:-
"The provision of this kind of mobile music service is key to the Company's growth, and these launches also mark a significant expansion in 7digital's South American business."
Furthermore, 7Digital has also announced that it has signed an agreement with digital multimedia streaming platform Playster, to expand their music streaming service into 15 additional territories.
I hold shares in 7Digital. Currently the company is loss making and cash burn has been quite high, however they appear to be gaining considerable traction and their business model looks promising where they are creating a recurring revenue stream with the associated improvement in gross margins (currently 64%). In their interim report they said:-
"The Company has significant deals at various stages in the contract process, with 63 new prospects as well as existing customers who are looking to expand current services or extend into further territories."
The shares were up 4% on the news.
Netcall released a positive sounding trading update today:-
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12598146.html
They state that:-
"We have had a positive start to the year with the total value of sales orders considerably ahead of this time last year. "
"Our significant levels of recurring revenue combined with a strong order inflow and a continuously expanding product suite give the Board confidence in achieving a successful outcome for the full year."
I don't hold shares in Netcall, but I mention it because Michael Jackson is Chairman of the company.
By the way "Billie Jean is not his lover, She's just a girl who claims that he is the one, But the kid is not his son". Sorry couldn't resist.
This Michael Jackson is also Executive Chairman of Access Intelligence, a company in which I do hold shares.
I am hopeful that Access Intelligence's fortunes will follow a similar path to Netcall. Netcall is profitable with a high percentage of recurring revenues, it has a very sound balance sheet with no debt and plenty of cash. It is also highly cash generative. It is predicted to pay dividends of 3p in 2016 which equates to a yield of 5.6%. The market cap. is around £74m after a small rise in the share price this morning.
In a separate announcement, I further note that it has "secured a five-year SaaS contract worth GBP400,000 to provide its Liberty Customer Experience Manager solution to a Local Authority".
Netcall's P/E ratio is currently high at around 29 on a fully diluted basis falling to 24 next year.
N.B. After doing more research on Netcall, I have made a small purchase. This is a profitable company with a strong balance sheet, excellent cash flows and gross margins at a mouth-watering 91%. Recurring revenues currently make up 62% and are likely to increase going forward. Whilst the p/e ratios look high, I can envisage that they will fall quite quickly and the company will prove to have been very good value. I like their enhanced dividend policy which equates to 4% this year (ex-div on 10th Dec) and set to rise. The share price is well below it's early year highs of over 70p.
Tuesday 24 November 2015
SCPA - Scapa Group
If you'd bought Scapa Group shares in around 2010/2011 you'd be sitting on very sizeable gains indeed. Scapa has been a multi-bagger in that time with the share price rising around 12 to 13 times. Scapa is listed on Aim and is a further illustration that stock picking and astute timing can bring rich rewards whichever market the company is listed on. Personally, I enjoy investing in Aim listed companies because you can unearth some real gems which are often far below the radar of most investors.
Scapa released their interim results this morning which look pretty decent with revenue growth of 4.0% to £119.3m (2014: £114.7m); trading profit up 17.6% to £10.0m (2014: £8.5m), adjusted profit before tax increasing 18.3% to £9.7m (2014: £8.2m) and adjusted earnings per share improving 25.0% to 5.0p (2014: 4.0p). Net debt was higher at £6.8m (31 March 2015: £3.4m net debt).
The outlook statement sounds encouraging:-
Scapa released their interim results this morning which look pretty decent with revenue growth of 4.0% to £119.3m (2014: £114.7m); trading profit up 17.6% to £10.0m (2014: £8.5m), adjusted profit before tax increasing 18.3% to £9.7m (2014: £8.2m) and adjusted earnings per share improving 25.0% to 5.0p (2014: 4.0p). Net debt was higher at £6.8m (31 March 2015: £3.4m net debt).
The outlook statement sounds encouraging:-
"The Group continues to make progress in executing its strategy and has delivered another good result for the half year.
While we are mindful of wider macro-economic factors the Board remains confident about the Group's outlook and expects continued progress for the remainder of the year and beyond."
The company is cash generative and pays a small dividend with a progressive dividend policy in place. I haven't looked at the balance sheet in any great detail, but at a glance it looks pretty sound.
Scapa doesn't interest me at the moment since I tend to concentrate on micro-caps (although not exclusively) and my attention is directed at other opportunities presently. Others might wish to do more research.
AVESCO
Just a quick mention re: Avesco. I am anticipating a trading update in mid-December and I'm hopeful that it won't disappoint. In the half-yearly results they stated that they expect full-year results to beat expectations. Judging by the projects that have appeared on Facebook and Twitter, I am optimistic that momentum has been maintained. Theoretically 2016 should also be a good year for Avesco given that more major events take place in the even years, although they do appear to be smoothing out the odd/even year disparity to good effect.
A division of Avesco which is seldom mentioned is Presteigne. Essentially Presteigne is a leading broadcast hire and rental specialist which has tended to fare better in even years. It looks like they might be doing pretty well this year though if this project is indicative of their workload:-
"Presteigne provides studio and production facilities for TFI Friday"
http://presteigne.tv/news/item/presteigne-provides-studio-and-production-facilities-for-tfi-Friday
AVESCO
Just a quick mention re: Avesco. I am anticipating a trading update in mid-December and I'm hopeful that it won't disappoint. In the half-yearly results they stated that they expect full-year results to beat expectations. Judging by the projects that have appeared on Facebook and Twitter, I am optimistic that momentum has been maintained. Theoretically 2016 should also be a good year for Avesco given that more major events take place in the even years, although they do appear to be smoothing out the odd/even year disparity to good effect.
A division of Avesco which is seldom mentioned is Presteigne. Essentially Presteigne is a leading broadcast hire and rental specialist which has tended to fare better in even years. It looks like they might be doing pretty well this year though if this project is indicative of their workload:-
"Presteigne provides studio and production facilities for TFI Friday"
http://presteigne.tv/news/item/presteigne-provides-studio-and-production-facilities-for-tfi-Friday
Monday 23 November 2015
Trakm8 - Half yearly results
Just a quick commentary about Trakm8's half-yearly results which were released this morning. Firstly, as anticipated, the results didn't disappoint and the outlook is very encouraging.
The headline figures are impressive with revenues up 38% at £11.7m, recurring revenues increasing 65% to almost £4m, EBITDA up 70% at £1.9m and adjusted profit up 89% at around £1.5m giving adjusted EPS at 5.08p.
The narrative of the report is highly encouraging with these comments of particular interest:-
"Recent contract wins and the stronger than budgeted start to the year mean we now believe that we will modestly exceed the current market expectations for the year as a whole."
"The installed base of devices reporting to our servers continues to increase rapidly and these recurring revenues are the core of Trakm8's business model and financial security."
"The value of new orders received during the period continued the good trend of recent years and were up by 21% (excluding DCS). This reinforces the confidence we have that strong organic growth can be maintained. "
"Gross margin percentages have also benefited from the higher levels of service revenues."
"The data analytics from our data science team has been used to create service, driver risk scoring and FNOL (first notification of loss) algorithms that are proving to be of great interest to current and potential customers. We have also identified opportunities to sell some of our data in an anonymised format."
"At the period end we had approximately 135,000 units reporting to our servers being an increase of 74% over last year. "
"We have expanded our sales resource and as a result developed a good pipeline of opportunities, with a large number of significant trials in progress. We anticipate that revenues will continue to grow strongly in this area. "
"...we expect second half of the year revenues will be considerably ahead of the first six months."
These are just a few snippets that provide encouragement to investors for the short, medium and long term. Trakm8 have also made two acquisitions in the past two or three years which have been integrated effectively and quickly proved earnings enhancing. The narrative hints at further acquisitions being made in the not too distant future.
"Now that DCS is operating to our satisfaction, we continue to assess further acquisition opportunities to enhance our organic growth."
Whilst the current forecast p/e ratio for this year and next come in at around 22 and 17 respectively, Trakm8 is making a habit of over-delivering. If the company were to make further strides in the USA or elsewhere overseas and/or announce a further earnings enhancing acquisition then the shares will look very good value at the current price of £2.60.
Just to reiterate, I have been a holder of shares in Trakm8 for some time.
The headline figures are impressive with revenues up 38% at £11.7m, recurring revenues increasing 65% to almost £4m, EBITDA up 70% at £1.9m and adjusted profit up 89% at around £1.5m giving adjusted EPS at 5.08p.
The narrative of the report is highly encouraging with these comments of particular interest:-
"Recent contract wins and the stronger than budgeted start to the year mean we now believe that we will modestly exceed the current market expectations for the year as a whole."
"The installed base of devices reporting to our servers continues to increase rapidly and these recurring revenues are the core of Trakm8's business model and financial security."
"The value of new orders received during the period continued the good trend of recent years and were up by 21% (excluding DCS). This reinforces the confidence we have that strong organic growth can be maintained. "
"Gross margin percentages have also benefited from the higher levels of service revenues."
"The data analytics from our data science team has been used to create service, driver risk scoring and FNOL (first notification of loss) algorithms that are proving to be of great interest to current and potential customers. We have also identified opportunities to sell some of our data in an anonymised format."
"At the period end we had approximately 135,000 units reporting to our servers being an increase of 74% over last year. "
"We have expanded our sales resource and as a result developed a good pipeline of opportunities, with a large number of significant trials in progress. We anticipate that revenues will continue to grow strongly in this area. "
"...we expect second half of the year revenues will be considerably ahead of the first six months."
These are just a few snippets that provide encouragement to investors for the short, medium and long term. Trakm8 have also made two acquisitions in the past two or three years which have been integrated effectively and quickly proved earnings enhancing. The narrative hints at further acquisitions being made in the not too distant future.
"Now that DCS is operating to our satisfaction, we continue to assess further acquisition opportunities to enhance our organic growth."
Whilst the current forecast p/e ratio for this year and next come in at around 22 and 17 respectively, Trakm8 is making a habit of over-delivering. If the company were to make further strides in the USA or elsewhere overseas and/or announce a further earnings enhancing acquisition then the shares will look very good value at the current price of £2.60.
Just to reiterate, I have been a holder of shares in Trakm8 for some time.
Thursday 19 November 2015
Ideagen
Interesting update from Ideagen this morning:-
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12588283.html
The key line is for investors is:-
"Trading in the first half of the year remained strong. Revenues and adjusted EBITDA are expected to be significantly ahead of the same period last year and in line with market expectations."
Broker forecasts for year ending April 2016 are for revenues of £21.8m, pre-tax profit £5.7m and adjusted EPS of 2.7p. At the current share price of 50p the forward p/e is 18.5. The company boasts a strong balance sheet with no debt. Ideagen's current market cap. is £88m.
The company is cash generative and pays a small dividend. Gross margins are high and recurring revenues make up over 50% of total revenue. It's a company that certainly warrants further investigation.
I mention Ideagen since they are a very similar company to Access Intelligence. I don't own shares in Ideagen, but I do have a holding in Access Intelligence.
I last reported on Access Intelligence back in May 2015:-
http://michae1mouse.blogspot.co.uk/2015/05/intelligent-choices.html
Since then they have released encouraging interim results:-
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12472562.html
The company is currently valued at £14m and they usually release a trading statement in early December. I await news with interest.
TRAKM8
I notice that the Floow who work alongside Trakm8 on the Direct Line contract have been recognised for this work with a prestigious international Road Safety Award:-
http://www.thefloow.com/blog/posts/the-floow-awarded-prestigious-international-road-safety-award
"The Floow have received this award for work undertaken in collaboration with the UK’s largest insurer, Direct Line Group, and have been especially recognised for the “development and implementation of feedback to influence driver behaviour”."
"Launched in 2014, and primarily focused at younger drivers, by the end of September 2015 over 67,000 drivers had embraced Direct Line DrivePlus telematics insurance, and are making use of the feedback platform to become better drivers. That’s up by over 75% in 2015 to date.
The leading insurance group, working in partnership with Sheffield-based The Floow, aim for the number of users to further increase in the coming months as more people see the economic, environmental and safety benefits of understanding how they drive and how their safety can be improved."
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12588283.html
The key line is for investors is:-
"Trading in the first half of the year remained strong. Revenues and adjusted EBITDA are expected to be significantly ahead of the same period last year and in line with market expectations."
Broker forecasts for year ending April 2016 are for revenues of £21.8m, pre-tax profit £5.7m and adjusted EPS of 2.7p. At the current share price of 50p the forward p/e is 18.5. The company boasts a strong balance sheet with no debt. Ideagen's current market cap. is £88m.
The company is cash generative and pays a small dividend. Gross margins are high and recurring revenues make up over 50% of total revenue. It's a company that certainly warrants further investigation.
I mention Ideagen since they are a very similar company to Access Intelligence. I don't own shares in Ideagen, but I do have a holding in Access Intelligence.
I last reported on Access Intelligence back in May 2015:-
http://michae1mouse.blogspot.co.uk/2015/05/intelligent-choices.html
Since then they have released encouraging interim results:-
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12472562.html
The company is currently valued at £14m and they usually release a trading statement in early December. I await news with interest.
TRAKM8
I notice that the Floow who work alongside Trakm8 on the Direct Line contract have been recognised for this work with a prestigious international Road Safety Award:-
http://www.thefloow.com/blog/posts/the-floow-awarded-prestigious-international-road-safety-award
"The Floow have received this award for work undertaken in collaboration with the UK’s largest insurer, Direct Line Group, and have been especially recognised for the “development and implementation of feedback to influence driver behaviour”."
"Launched in 2014, and primarily focused at younger drivers, by the end of September 2015 over 67,000 drivers had embraced Direct Line DrivePlus telematics insurance, and are making use of the feedback platform to become better drivers. That’s up by over 75% in 2015 to date.
The leading insurance group, working in partnership with Sheffield-based The Floow, aim for the number of users to further increase in the coming months as more people see the economic, environmental and safety benefits of understanding how they drive and how their safety can be improved."
Tuesday 17 November 2015
Why use one sentence when several more can be used in it's place?
A few years ago whilst employed with an organisation that shall remain nameless I used to dread the habitual Friday afternoon meeting. I kid you not, it used to last two or three hours and I'm pretty sure I must have nodded off to sleep on more than one occasion (hopefully discreetly and unnoticed). One of the reasons that the meetings were so long was because a key contributor just loved the sound of his own voice. Even worse he would try and construct sentences that were so obtuse they were almost impossible to decipher. I think he was probably trying to create an image of himself as an intellectual and/or deep thinker. However, when you did eventually decipher what he had actually said, it amounted to sod all. I think he might have ended up at Blinkx under an assumed name (just joking). From today's half-yearly report:-
"The Company's mission is to democratize access to quality digital content in a way that is respectful of consumer choice, impactful for the advertiser and sustainable for the content owner. Solving this fundamental equation is critical in order for the industry to thrive. These basic tenets will guide blinkx's decision-making in the near- and long-term, and represent a path to sustainable growth for both the Company and industry."
In short, he might have written, "We want to return to profitability, but at the moment we're totally f***ing clueless"
Perhaps that's a little bit harsh, but after recording a whopping $79,000,000 loss they clearly have some work to do.
In fairness, I don't know much about Blinkx and can only assume that something in today's statement is propping up the share price. At a glance the company does appear to boast a strong balance sheet.
Anyway, it's not one I wish to research and I'll leave this one to the bulls and bears who have done their due diligence.
In other news, Angle released another encouraging RNS this morning regarding progress with the commercialisation of it's Parsortix device.
For Parsortix to be successful, verification of it's utility from organisations such as Cancer Research UK Manchester Institute are absolutely critical. I am encouraged by the build up of evidence that has now been received from a number of prestigious institutions including tests involving a variety of cancers. Today's report focussed on Lung Cancer, the most common cancer in the world.
Key points for me from today's release are as follows:-
"ANGLE's Parsortix system "… offers a unique combination of features making it suitable for routine clinical analysis of patient blood samples" "
"Ged Brady, Deputy and Genomics Leader within the Clinical & Experimental Pharmacology group at Cancer Research UK Manchester Institute, commented:
"The Parsortix system has a unique combination of features making it suitable for routine clinical analysis of patient blood samples. We have now incorporated the Parsortix workflow into multiple clinical trials and have been accumulating many hundreds of stored enriched samples that will be of immense value in our future CTC studies." "
"ANGLE's Founder and Chief Executive, Andrew Newland, added:
"This is our second peer-reviewed publication in a scientific journal and adds to the growing body of published evidence of Parsortix's performance as a liquid biopsy. The success in pilot studies in harvesting CTCs from 100% of small-cell lung cancer patients comes after similar performance with 100% of prostate, breast and ovarian cancer types. We believe Parsortix is changing the paradigm for CTC capture and harvest for liquid biopsy and will change CTC molecular analysis from being a theoretical but impractical goal to being simple and effective in hospital laboratories all over the world. The prospect of deployment of our repeatable, non-invasive liquid biopsy in the treatment of lung cancer patients is exciting and has the potential to make a major impact in improving future cancer care." "
Still a speculative investment until sales begin to arrive of course, but critically the experts are impressed and so far they have all verified Parsortix's potential and utility. I await further news with interest.
Sunday 15 November 2015
A safe investment?
Safeland is a micro-cap that has come to my attention this morning after they released their half-year results. It's not a company that I'm familiar with, but the half-year results look mightily impressive at first glance.
Turnover is up 61.1% at £12.5m. Profit before tax is £4.3m and up a massive 95.4% and they've introduced an interim dividend of 1.5p (2014: 0p). Net asset value per share is 106.0p against a current share price of 55.5p. The group has a current market cap. of around £9m. Cashflow was also impressive.
The outlook statement is non-committal for the full year, and for a tiny company they do carry a sizeable debt.
I'll leave it there since I don't really invest in this sector of the market, and this is not a company I am familiar with. The blog is simply a quick snapshot of my thoughts and observations. Some investors may like to investigate this company further.
Now here's a interesting little micro-cap company:-
Creightons
I thought I might mention them because from Paul Scott's small cap. value report, I notice that the company is presenting at an event called Mello Beckenham tonight.
The group describes itself as being made up of a select group of brands and companies specialising in the creation of high quality personal care and beauty products for the consumer and trade market.
It's a company that I have been monitoring for a while but as yet I've not been tempted to buy. On paper it looks cheap, and some micro-cap investors may be tempted. Personally, two things put me off a little. Firstly, they are operating in what I can only imagine is an extremely competitive market place, and secondly, despite a pretty good record of profitability, they don't appear to have paid any dividends. The company has been around since the early 90s.
Since 2011, EPS growth has been impressive. In fact 2011-2012, 2012-2013 and 2013-2014 growth rates were 38%, 55% and 60% respectively.
At the interim stage this year, the profitability of the continuing business is at similar levels to last year, although with the sale of "The Real Shaving Company", the diluted EPS figure has already exceeded last year's full year figure at 1.57p.
The balance sheet is impressive with tangible net asset value standing at £6.2m against a current market cap. of £5.2m. Cash on the balance sheet is around £1m. Debt is negligible.
Last year's EPS figure means that the shares stand on a lowly p/e of around 6 with that figure likely to fall even further this year. In fact, on all measures the company appears to be very cheap.
Investors might like to ignore the exceptional items that flattered the EPS figure last year, but you could easily argue that the company appears to be making exceptional gains a habit rather than a one-off.
The general narrative of the half-yearly report reads well, although one sentence does infer some management caution for the full year,
"We continue to be cautious regarding the underlying level of retail sales and continue to see the trend of consumers in the UK focussing on value. This will present sales opportunities but may impact on margins."
Interestingly while writing this report I almost decided to buy a few shares before publishing. If they paid a dividend I almost certainly would have. Possibly one I might regret not having bought in future months? We shall see.
Now here's a interesting little micro-cap company:-
Creightons
I thought I might mention them because from Paul Scott's small cap. value report, I notice that the company is presenting at an event called Mello Beckenham tonight.
The group describes itself as being made up of a select group of brands and companies specialising in the creation of high quality personal care and beauty products for the consumer and trade market.
It's a company that I have been monitoring for a while but as yet I've not been tempted to buy. On paper it looks cheap, and some micro-cap investors may be tempted. Personally, two things put me off a little. Firstly, they are operating in what I can only imagine is an extremely competitive market place, and secondly, despite a pretty good record of profitability, they don't appear to have paid any dividends. The company has been around since the early 90s.
Since 2011, EPS growth has been impressive. In fact 2011-2012, 2012-2013 and 2013-2014 growth rates were 38%, 55% and 60% respectively.
At the interim stage this year, the profitability of the continuing business is at similar levels to last year, although with the sale of "The Real Shaving Company", the diluted EPS figure has already exceeded last year's full year figure at 1.57p.
The balance sheet is impressive with tangible net asset value standing at £6.2m against a current market cap. of £5.2m. Cash on the balance sheet is around £1m. Debt is negligible.
Last year's EPS figure means that the shares stand on a lowly p/e of around 6 with that figure likely to fall even further this year. In fact, on all measures the company appears to be very cheap.
Investors might like to ignore the exceptional items that flattered the EPS figure last year, but you could easily argue that the company appears to be making exceptional gains a habit rather than a one-off.
The general narrative of the half-yearly report reads well, although one sentence does infer some management caution for the full year,
"We continue to be cautious regarding the underlying level of retail sales and continue to see the trend of consumers in the UK focussing on value. This will present sales opportunities but may impact on margins."
Interestingly while writing this report I almost decided to buy a few shares before publishing. If they paid a dividend I almost certainly would have. Possibly one I might regret not having bought in future months? We shall see.
Friday 13 November 2015
Brief updates on an otherwise quiet day
Today is a pretty quiet day in terms of news that interests me, although I can't help mentioning the pile of absolute rubbish that is the Aim listed DCD Media. Today's trading update says it all really:-
http://uk.advfn.com/news/UKREG/2015/article/69299053
The company should delist immediately since no sane investor is going to put money into this tripe. I won't waste any more time commenting on DCD's history, but amongst other articles that I've written you may find the following blog rather prophetic:-
http://michae1mouse.blogspot.co.uk/2015/04/fool-me-once-shame-on-you-fool-me-twice.html
Good riddance to DCD media hopefully. The shares are down 30% today, although in reality they are worthless.
Moving on. It's probably just coincidence, but I notice that two of my holdings have moved in opposite directions today. Avesco is down 3.5% whilst a fairly recent purchase Aeorema is up just over 7%. It briefly crossed my mind that Avesco is a potential suitor for Aeorema which would be quite a bargain at it's current market cap. Anyway, this is just idle musing on my part. Both companies are long term holds for me. Avesco and Aeorema provide a useful income stream. Avesco's share price is backed by quality assets, Aeorema is debt free. I am hopeful that trading at both organisations will go from strength to strength.
Anybody who missed yesterday's RNS from Trakm8 should note that results will be released on Monday 23rd November. This is a week ahead of last year. In general companies don't rush to put out poor results, and so I am hopeful that Trakm8's results won't disappoint.
Audioboom appears to have reversed it's recent downward trend, and I expect they will issue a trading update in December as they did last year. The shares bounced back by 10% last night and are up a further 3% this morning.
Angle shares are up slightly this morning after a brief dip in price yesterday. The long term price chart from 2011-present looks strong with an uptrend clearly in tact.
http://uk.advfn.com/news/UKREG/2015/article/69299053
The company should delist immediately since no sane investor is going to put money into this tripe. I won't waste any more time commenting on DCD's history, but amongst other articles that I've written you may find the following blog rather prophetic:-
http://michae1mouse.blogspot.co.uk/2015/04/fool-me-once-shame-on-you-fool-me-twice.html
Good riddance to DCD media hopefully. The shares are down 30% today, although in reality they are worthless.
Moving on. It's probably just coincidence, but I notice that two of my holdings have moved in opposite directions today. Avesco is down 3.5% whilst a fairly recent purchase Aeorema is up just over 7%. It briefly crossed my mind that Avesco is a potential suitor for Aeorema which would be quite a bargain at it's current market cap. Anyway, this is just idle musing on my part. Both companies are long term holds for me. Avesco and Aeorema provide a useful income stream. Avesco's share price is backed by quality assets, Aeorema is debt free. I am hopeful that trading at both organisations will go from strength to strength.
Anybody who missed yesterday's RNS from Trakm8 should note that results will be released on Monday 23rd November. This is a week ahead of last year. In general companies don't rush to put out poor results, and so I am hopeful that Trakm8's results won't disappoint.
Audioboom appears to have reversed it's recent downward trend, and I expect they will issue a trading update in December as they did last year. The shares bounced back by 10% last night and are up a further 3% this morning.
Angle shares are up slightly this morning after a brief dip in price yesterday. The long term price chart from 2011-present looks strong with an uptrend clearly in tact.
Thursday 12 November 2015
Avanti Communications
I can't quite get my head around Avanti's trading statement for Q1 2016 this morning. Is it encouraging or disappointing? As I have mentioned before Avanti is one of my speculative investments which hasn't really gone anywhere since I purchased shares in 2012 when they were around £2.60.
Something for bears and bulls I would suggest.
http://uk.advfn.com/news/UKREG/2015/article/69277463
On the positive side, they report sequential growth of 23.4% over the previous quarter, and that top-20 Customer Bandwidth Revenue Growth increased 57.5% a constant currency basis. Average Fleet Utilisation also appears to have improved to around 25%.
However, for the bears, revenues are flat at $13.7m when compared to the same period last year, and they have recorded an EBITDA loss of $2.9m. They explain this as follows:- "This was lower than Avanti's prevailing run rate of growth, due to a larger amount of equipment and government revenue in the previous year, which, although recurring, tends to be recognised on a non-linear basis."
Back to the positives. They state that strong growth is expected to continue throughout the remainder of 2016 and the period end cash balance was $219.3m. They believe that cash balances will comfortably meet all of the company's medium-term financial commitments.
Rather surprisingly they mention that Facebook are one of their customers in Africa. I'd assumed that any tie-up with Facebook had long since disappeared.
From previous reports there is the potential for the company to generate EBITDA of $500m. That seems a long way off at the moment.
This is a speculative investment for me, and I have held for quite a while now. Whilst the trading statement doesn't blow me away, I'll stick with the shares and see how things develop from here.
XLMedia
I was about to conduct a critique of this company following a very positive trading statement this morning where they state that they will exceed current market expectations. The fundamentals look very strong. The shares are up by over 9% this morning. Sadly, I then noticed that they are based in Cyprus. I'm afraid that it's not for me. It's incredible the damage that 'bad eggs' have done to investor confidence in these overseas AIM listings. Good luck if you are invested, it looks great value on paper.
Triad
Triad is an interesting little micro-cap. The shares are up just over 7% this morning following interim results. Revenues and profits are up significantly at the half-way stage at 21% and 71%(albeit from a low base) respectively. Revenue stands at £12.74m whilst profit after tax came in at £220,000.
The narrative in today's report reads well and in particular they appear to have an excellent client base. Encouragingly they say that their results are underpinned by long term client engagements.
The balance sheet looks ok, although cash looks tight at just £180,000 with a reported cash outflow at the half year of £183,000. The company doesn't pay a dividend, and their outlook statement is non-committal.
The shares have had an excellent run since the start of the year. At a current market cap. of around £5.5m some investors may wish to do some further research. I do not hold shares.
Something for bears and bulls I would suggest.
http://uk.advfn.com/news/UKREG/2015/article/69277463
On the positive side, they report sequential growth of 23.4% over the previous quarter, and that top-20 Customer Bandwidth Revenue Growth increased 57.5% a constant currency basis. Average Fleet Utilisation also appears to have improved to around 25%.
However, for the bears, revenues are flat at $13.7m when compared to the same period last year, and they have recorded an EBITDA loss of $2.9m. They explain this as follows:- "This was lower than Avanti's prevailing run rate of growth, due to a larger amount of equipment and government revenue in the previous year, which, although recurring, tends to be recognised on a non-linear basis."
Back to the positives. They state that strong growth is expected to continue throughout the remainder of 2016 and the period end cash balance was $219.3m. They believe that cash balances will comfortably meet all of the company's medium-term financial commitments.
Rather surprisingly they mention that Facebook are one of their customers in Africa. I'd assumed that any tie-up with Facebook had long since disappeared.
From previous reports there is the potential for the company to generate EBITDA of $500m. That seems a long way off at the moment.
This is a speculative investment for me, and I have held for quite a while now. Whilst the trading statement doesn't blow me away, I'll stick with the shares and see how things develop from here.
XLMedia
I was about to conduct a critique of this company following a very positive trading statement this morning where they state that they will exceed current market expectations. The fundamentals look very strong. The shares are up by over 9% this morning. Sadly, I then noticed that they are based in Cyprus. I'm afraid that it's not for me. It's incredible the damage that 'bad eggs' have done to investor confidence in these overseas AIM listings. Good luck if you are invested, it looks great value on paper.
Triad
Triad is an interesting little micro-cap. The shares are up just over 7% this morning following interim results. Revenues and profits are up significantly at the half-way stage at 21% and 71%(albeit from a low base) respectively. Revenue stands at £12.74m whilst profit after tax came in at £220,000.
The narrative in today's report reads well and in particular they appear to have an excellent client base. Encouragingly they say that their results are underpinned by long term client engagements.
The balance sheet looks ok, although cash looks tight at just £180,000 with a reported cash outflow at the half year of £183,000. The company doesn't pay a dividend, and their outlook statement is non-committal.
The shares have had an excellent run since the start of the year. At a current market cap. of around £5.5m some investors may wish to do some further research. I do not hold shares.
Tuesday 10 November 2015
I keep hearing about this company.......
An interesting contract win by a company called Eckoh Technology this morning:-
http://uk.advfn.com/news/UKREG/2015/article/69258952
The company has secured
a significant new three-year contract to provide secure payment services to one of the world's largest multi-media retailers (the "Client"), broadcasting to over 200 million homes worldwide.
Nik Philpot, CEO of Eckoh, commented:
"I am delighted to announce this major new contract for our Haloh payment solution. Our payment clients' key goal is to protect their customer data without compromising customer experience. With recent high-profile data breaches highlighting the significant risks organisations take if they do not secure data effectively, we would expect to see demand for our technology only increase. To this end, we continue to evolve our products by developing the latest security systems and to make them flexible enough to accommodate the most challenging IT environments. Our latest tokenisation solution meets these needs exactly and we are excited that this household brand is the latest company to adopt it."
It would appear to me that Eckoh are in the right place at the right time. It's a company that I mentioned only recently:-
http://michae1mouse.blogspot.co.uk/2015/09/eckohs-of-my-own-investing-strategy.html
What's the current investment case for Eckoh though?
Clearly the company looks like it will continue to grow for some time to come, and for momentum traders there is a good chance that the share price will break out this morning and reach new highs? We shall see.
On fundamentals, the valuation looks a little rich for me with the forward p/e ratios for 2016 and 2017 at 36 and 27 respectively. However, further contract wins and broker upgrades may bring these figures down considerably of course.
The balance sheet is sound with modest debt, and the company pays a small dividend. The company is cash generative.
Interesting company to research further, but I won't be investing at the current price.
http://uk.advfn.com/news/UKREG/2015/article/69258952
The company has secured
a significant new three-year contract to provide secure payment services to one of the world's largest multi-media retailers (the "Client"), broadcasting to over 200 million homes worldwide. Nik Philpot, CEO of Eckoh, commented:
"I am delighted to announce this major new contract for our Haloh payment solution. Our payment clients' key goal is to protect their customer data without compromising customer experience. With recent high-profile data breaches highlighting the significant risks organisations take if they do not secure data
effectively, we would expect to see demand for our technology only increase. To this end, we continue to evolve our products by developing the latest security systems and to make them flexible enough to accommodate the most challenging IT environments. Our latest tokenisation solution meets these needs exactly and we are excited that this household brand is the latest company to adopt it." It would appear to me that Eckoh are in the right place at the right time. It's a company that I mentioned only recently:-
http://michae1mouse.blogspot.co.uk/2015/09/eckohs-of-my-own-investing-strategy.html
What's the current investment case for Eckoh though?
Clearly the company looks like it will continue to grow for some time to come, and for momentum traders there is a good chance that the share price will break out this morning and reach new highs? We shall see.
On fundamentals, the valuation looks a little rich for me with the forward p/e ratios for 2016 and 2017 at 36 and 27 respectively. However, further contract wins and broker upgrades may bring these figures down considerably of course.
The balance sheet is sound with modest debt, and the company pays a small dividend. The company is cash generative.
Interesting company to research further, but I won't be investing at the current price.
Monday 9 November 2015
Software Radio Technology
Software Radio Technology is a company that has fascinated me for some time. It appears to have a large following and always claims to have huge potential going forward for it's AIS technology. As yet, it has failed to impress. Success always appears to be just around the corner.
Today SRT released their interim results, and yet again they are less than impressive. Revenues are down nearly £2m on the same time last year, and they've made a loss of £750,000. Cash is ok at £2.4m on the balance sheet, but the valuation at nearly £30m is staggering.
However, hats off to the ever ebullient Chairman Simon Rogers. Never mind that the current order book stands at just £3.6m, get this, apparently they have "a validated sales opportunity pipeline worth approximately £200 million." Well that's me in then!!!!
"A validated sales opportunity pipeline." Today's phrase of the day surely?
Good luck to current investors, and hopefully your patience will eventually be rewarded, but it may be a long time coming yet.
BOOM
cgod - "We have a big seller pushing the price down, what do you make of this MM?"
Hello cgod. Not quite sure if you are addressing me or Market Master?
Here's a reply anyway whether requested or not.
When I buy shares in a company I do so at a price where I believe there is multi-bagger potential. I'm not interested in short term trading and taking a quick scalp. There have been occasions where this would have been more profitable, but overall I believe my buy and hold strategy gives me considerably greater returns in the long run. In short, I don't really care about short term price fluctuations.
In my opinion, Audioboom is highly speculative, but I have bought at prices I consider leaves multi-bagger potential should BOOM successfully execute on their strategy.
Their December update is all I'm interested in short term. If they report revenues around £500,000 then it suggests the latent potential remains firmly in tact.
Overall, once I have bought shares at what I consider to be reasonable prices, I have found the perfect strategy that works for my personality. Sit back and do nothing, and let the share price take care of itself.
Today SRT released their interim results, and yet again they are less than impressive. Revenues are down nearly £2m on the same time last year, and they've made a loss of £750,000. Cash is ok at £2.4m on the balance sheet, but the valuation at nearly £30m is staggering.
However, hats off to the ever ebullient Chairman Simon Rogers. Never mind that the current order book stands at just £3.6m, get this, apparently they have "a validated sales opportunity pipeline worth approximately £200 million." Well that's me in then!!!!
"A validated sales opportunity pipeline." Today's phrase of the day surely?
Good luck to current investors, and hopefully your patience will eventually be rewarded, but it may be a long time coming yet.
BOOM
cgod - "We have a big seller pushing the price down, what do you make of this MM?"
Hello cgod. Not quite sure if you are addressing me or Market Master?
Here's a reply anyway whether requested or not.
When I buy shares in a company I do so at a price where I believe there is multi-bagger potential. I'm not interested in short term trading and taking a quick scalp. There have been occasions where this would have been more profitable, but overall I believe my buy and hold strategy gives me considerably greater returns in the long run. In short, I don't really care about short term price fluctuations.
In my opinion, Audioboom is highly speculative, but I have bought at prices I consider leaves multi-bagger potential should BOOM successfully execute on their strategy.
Their December update is all I'm interested in short term. If they report revenues around £500,000 then it suggests the latent potential remains firmly in tact.
Overall, once I have bought shares at what I consider to be reasonable prices, I have found the perfect strategy that works for my personality. Sit back and do nothing, and let the share price take care of itself.
Grafenia
Just one micro-cap to your draw attention to today which is a company called Grafenia. Essentially the company is involved in the graphic design and printing industry.
Grafenia released their interim results today which are a bit of a mixed bag. As far as I can make out, they appear to be in the process of re-positioning the business following structural changes in this particular industry? Certainly, they recently sold their Dutch subsidiary for 2.35m euros, and as a consequence, the business has been scaled down significantly. For investors, I suppose it's a question of whether they can build the new model into a profitable and viable concern going forward. Today's report does give some encouragement.
In the first instance, the company does boast a healthy balance sheet. At the interim stage the company had £5.5m in Net Assets, although nearly £3m is made up of intangibles. Cash reported is £121,000, but this does not include £1.8m to be added to the coffers from the sale of it's Dutch subsidiary. The business is cash generative, but cash used in investing activities was up significantly at over £1m.
Grafenia have declared an interim dividend of 0.25p which is half it's previous dividend to reflect the reduced scale of the business. Last year's total dividend was 1.5p. If the final dividend is also halved then the yield will be around 5%.
In the narrative about the dividend they state that this "reflects the Board's cautious optimism for new initiatives."
Interestingly, later today both the acting CEO and the Finance Director bought shares worth around £60,000 between them. Perhaps they're a little bit more optimistic than they're letting on?
I haven't bought shares yet, but I will watch with interest.
N.B. I should mention that the current market cap. stands at around £7.1m.
Grafenia released their interim results today which are a bit of a mixed bag. As far as I can make out, they appear to be in the process of re-positioning the business following structural changes in this particular industry? Certainly, they recently sold their Dutch subsidiary for 2.35m euros, and as a consequence, the business has been scaled down significantly. For investors, I suppose it's a question of whether they can build the new model into a profitable and viable concern going forward. Today's report does give some encouragement.
In the first instance, the company does boast a healthy balance sheet. At the interim stage the company had £5.5m in Net Assets, although nearly £3m is made up of intangibles. Cash reported is £121,000, but this does not include £1.8m to be added to the coffers from the sale of it's Dutch subsidiary. The business is cash generative, but cash used in investing activities was up significantly at over £1m.
Grafenia have declared an interim dividend of 0.25p which is half it's previous dividend to reflect the reduced scale of the business. Last year's total dividend was 1.5p. If the final dividend is also halved then the yield will be around 5%.
In the narrative about the dividend they state that this "reflects the Board's cautious optimism for new initiatives."
Interestingly, later today both the acting CEO and the Finance Director bought shares worth around £60,000 between them. Perhaps they're a little bit more optimistic than they're letting on?
I haven't bought shares yet, but I will watch with interest.
N.B. I should mention that the current market cap. stands at around £7.1m.
Thursday 5 November 2015
Croma Security Systems are a company that I have commented on before, they have progressed well in recent years and the increasing share price has reflected this. Croma released their full year results this morning where they have reported record figures. Turnover was up to nearly £16m with net profits of £358,000 giving an EPS figure of 2.4p. This puts the group on a p/e ratio of just over 20. The group boasts a solid balance sheet with NTAV of £2.3m which leaps to £9.1m if you include goodwill and intangibles. This is against a market cap. of £7.3m. The company is cash generative.
Overall, the tenor of the report reads positively. However, the outlook statement is cautious:-
"The Board views the coming year with optimism tinged with caution."
Croma have maintained a small dividend payment of 0.3p which equates to 0.6%.
All in all whilst Croma have made excellent progress in recent years, there isn't enough in today's report to tempt me in yet. I shall continue to monitor their progress and reconsider if there is sufficient price weakness.
Another company I have looked at before is Snoozebox. In essence, it is a company that supplies substantial temporary accommodation at events. Snoozebox released a trading statement today.
When you cut through the waffle then the company is going to make a £5m EBITDA loss. I would anticipate that operating costs at the company will continue to be high for some time to come.
Yes, Snoozebox are expanding with increasing revenues, but with a market cap. of £20m and possibly with further fundraisings to come, it's not a company that would interest me.
A quick visit to Avesco. Their website has been updated again today, and it appears that they continue to win more recognition for their excellence and are increasingly being called upon to implement complex projections. This is a new client:-
http://www.ct-group.com/na/en/posts/ct-s-av-inflates-la-dance-party
A glance at facebook is also interesting. Are they gaining more traction in Asia? The last three posts are projects in Malaysia, Macau and Tokyo.
https://www.facebook.com/creativetechnologygroup
Update - Love the prompt dividend payment from AEO. Ex-dividend today with payment on the 27th of the same month (November). Other companies should take note. Also notice on twitter that they were working with Vodafone yesterday:-
https://twitter.com/cheerful21st
Overall, the tenor of the report reads positively. However, the outlook statement is cautious:-
"The Board views the coming year with optimism tinged with caution."
Croma have maintained a small dividend payment of 0.3p which equates to 0.6%.
All in all whilst Croma have made excellent progress in recent years, there isn't enough in today's report to tempt me in yet. I shall continue to monitor their progress and reconsider if there is sufficient price weakness.
Another company I have looked at before is Snoozebox. In essence, it is a company that supplies substantial temporary accommodation at events. Snoozebox released a trading statement today.
When you cut through the waffle then the company is going to make a £5m EBITDA loss. I would anticipate that operating costs at the company will continue to be high for some time to come.
Yes, Snoozebox are expanding with increasing revenues, but with a market cap. of £20m and possibly with further fundraisings to come, it's not a company that would interest me.
A quick visit to Avesco. Their website has been updated again today, and it appears that they continue to win more recognition for their excellence and are increasingly being called upon to implement complex projections. This is a new client:-
http://www.ct-group.com/na/en/posts/ct-s-av-inflates-la-dance-party
A glance at facebook is also interesting. Are they gaining more traction in Asia? The last three posts are projects in Malaysia, Macau and Tokyo.
https://www.facebook.com/creativetechnologygroup
Update - Love the prompt dividend payment from AEO. Ex-dividend today with payment on the 27th of the same month (November). Other companies should take note. Also notice on twitter that they were working with Vodafone yesterday:-
https://twitter.com/cheerful21st
Wednesday 4 November 2015
Not much to report regarding my holdings this morning, although I note that some profit taking has taken place in Audioboom in the last two trading days. This was to be expected with no news from the company, and it's a healthy pull back. Nothing goes up in a straight line.
Having said that, note what's happened with a company called Plethora Solutions today. The share price has risen by well over 100% this morning. As far as I can make out the offer is around 12.5p. The shares stood at 2.75p yesterday. Plethora, whilst making good progress in their field, are yet to make any meaningful revenues and they carry net liabilities. The offer values the company at around £123m. Clearly, the acquirer sees huge potential here. Well done if you're a shareholder that has picked these up at recent lows.
Why do I mention Plethora? Well, they are an example of how a knock-out take-over offer can suddenly appear out of the blue. Nothing wrong with taking profits, but watch this space on Audioboom. I'm certainly holding tight.
Having said that, note what's happened with a company called Plethora Solutions today. The share price has risen by well over 100% this morning. As far as I can make out the offer is around 12.5p. The shares stood at 2.75p yesterday. Plethora, whilst making good progress in their field, are yet to make any meaningful revenues and they carry net liabilities. The offer values the company at around £123m. Clearly, the acquirer sees huge potential here. Well done if you're a shareholder that has picked these up at recent lows.
Why do I mention Plethora? Well, they are an example of how a knock-out take-over offer can suddenly appear out of the blue. Nothing wrong with taking profits, but watch this space on Audioboom. I'm certainly holding tight.
Monday 2 November 2015
Just two quick updates to start the day. Firstly, I mentioned Avanti Communications yesterday and today they have announced a significant contract win with Telkom SA.
http://uk.advfn.com/news/UKREG/2015/article/69131621
Two hugely important bits for me are:-
"This multi-year commitment is expected to make a significant contribution to filling HYLAS 2 and HYLAS 4 South African capacity in a market that is developing well for Avanti."
"Avanti has now won contracts with the incumbent national telecoms companies in all of its core African markets, in-line with its announced strategy."
Avanti has been a target of shorting campaigns in the past, but most recently they have shown significant progress and appear to be answering their critics. This contract provides further confirmation that the business is now gaining momentum. I am becoming more confident that they have turned the corner towards achieving their stated goals.
News indirectly from another of my holdings this morning. Direct Line Insurance have released their third quarter trading update this morning and it reads well for Trakm8's supply of telematics devices:-
"The Group continues to build on its current strong market positions by identifying and investing in market developments that it believes can contribute to future growth. In particular, Motor has continued to grow its telematics-based insurance, with a 76% increase during 2015 to 67,000 in-force policies."
I'll update the blog later in the day.
Bought back into Biome Technologies today, not a huge stake, but enough to keep me interested. Biome is a company I held shares in earlier this year when I bought at prices around the 80p mark. Within a few months the SP had improved significantly. The half-year results however didn't impress, and I took a 75% profit.
The trading statement today has tempted back in though. It looks encouraging, and they look set to beat market expectations for the full year. Total group revenues in the third quarter were up 169% at £1.3m and group revenues for the nine month period are 18% ahead of last year at £3.3m.
Both the bioplastics and radio frequency technology businesses are doing well. Order visibility for both divisions is looking good for the rest of this year and into 2016. Significantly the group reported a small EBITDA profit in the third quarter, and cash balances appear to be stabilising. They have £1.7m in cash on the balance sheet just £0.1m less than 30th June this year. If you strip out intangibles, even after today's share price rise, the market cap. is not far above NTAV. The current market cap. is around £3.4m whilst NTAV is £2.7m. If you include intangibles then the market cap. is below NAV (£4m). At the interims gross margins had improved from 35% to 39%.
Biome has been a serial disappointer in the past and understandably early investors are sceptical. The shares are highly illiquid, and the spread is off-putting. However, Biome may well have reached an inflexion point in their development, management believe so with Paul Mines saying the following:-
"Revenue generation is strong in both divisions and, coupling this with the achievement of a small group EBITDA profit in the quarter, we are increasingly confident that 2015 will become a very significant milestone in Biome's development."
http://uk.advfn.com/news/UKREG/2015/article/69131621
Two hugely important bits for me are:-
"This multi-year commitment is expected to make a significant contribution to filling HYLAS 2 and HYLAS 4 South African capacity in a market that is developing well for Avanti."
"Avanti has now won contracts with the incumbent national telecoms companies in all of its core African markets, in-line with its announced strategy."
Avanti has been a target of shorting campaigns in the past, but most recently they have shown significant progress and appear to be answering their critics. This contract provides further confirmation that the business is now gaining momentum. I am becoming more confident that they have turned the corner towards achieving their stated goals.
News indirectly from another of my holdings this morning. Direct Line Insurance have released their third quarter trading update this morning and it reads well for Trakm8's supply of telematics devices:-
"The Group continues to build on its current strong market positions by identifying and investing in market developments that it believes can contribute to future growth. In particular, Motor has continued to grow its telematics-based insurance, with a 76% increase during 2015 to 67,000 in-force policies."
I'll update the blog later in the day.
Bought back into Biome Technologies today, not a huge stake, but enough to keep me interested. Biome is a company I held shares in earlier this year when I bought at prices around the 80p mark. Within a few months the SP had improved significantly. The half-year results however didn't impress, and I took a 75% profit.
The trading statement today has tempted back in though. It looks encouraging, and they look set to beat market expectations for the full year. Total group revenues in the third quarter were up 169% at £1.3m and group revenues for the nine month period are 18% ahead of last year at £3.3m.
Both the bioplastics and radio frequency technology
businesses are doing well. Order visibility for both divisions is looking good for the rest of this year and into 2016. Significantly the group reported a small EBITDA profit in the third quarter, and cash balances appear to be stabilising. They have £1.7m in cash on the balance sheet just £0.1m less than 30th June this year. If you strip out intangibles, even after today's share price rise, the market cap. is not far above NTAV. The current market cap. is around £3.4m whilst NTAV is £2.7m. If you include intangibles then the market cap. is below NAV (£4m). At the interims gross margins had improved from 35% to 39%.Biome has been a serial disappointer in the past and understandably early investors are sceptical. The shares are highly illiquid, and the spread is off-putting. However, Biome may well have reached an inflexion point in their development, management believe so with Paul Mines saying the following:-
"Revenue generation is strong in both divisions and, coupling this with the achievement of a small group EBITDA profit in the quarter, we are increasingly confident that 2015 will become a very significant milestone in Biome's development."
For the early risers, LPA Group has got out the blocks quite quickly this morning with an encouraging sounding trading update. I don't really know much about this company apart from the cursory glance I had this morning. It appears they had warned on profits at the half year but have since turned things around and will now be ahead of revised expectations. Medium term prospects look good. The shares don't look particularly cheap to me based on a p/e basis, but the TNAV looks ok. Cash at the half way stage was minimal. Might be one to research further? Shares are up around 20% as I type.
Aeorema which is one of my holdings that I mentioned yesterday has ticked up a little this morning. Goes ex-dividend on Thursday. Very healthy yield.
Avanti Communications which is also one of my investments, albeit speculative has also ticked up a little this morning. It's not been a great investment yet (share price wise), but I am encouraged by their progress and the shares have recently seen good upward momentum.
I shall update the diary as the day progresses with anything of note or that catches my eye.
Had a better look at LPA Group's half-yearly report. It looks plausible that the cash outflow at the half-way stage was a temporary blip. Given the trading statement this morning, and their confidence in maintaining the interim dividend, I suspect that they will return to cash flow positive by year end. Shares are up 30% now and it's certainly an interesting micro-cap. EPS for end of September was predicted to be 1.1p rising to 4.2p next year. Next year's p/e ratio stands at 20 after this mornings rise and the company pays a modest dividend. Could turn out to be a GARP stock, but the price would have to retreat from here to capture my interest.
Aeorema which is one of my holdings that I mentioned yesterday has ticked up a little this morning. Goes ex-dividend on Thursday. Very healthy yield.
Avanti Communications which is also one of my investments, albeit speculative has also ticked up a little this morning. It's not been a great investment yet (share price wise), but I am encouraged by their progress and the shares have recently seen good upward momentum.
I shall update the diary as the day progresses with anything of note or that catches my eye.
Had a better look at LPA Group's half-yearly report. It looks plausible that the cash outflow at the half-way stage was a temporary blip. Given the trading statement this morning, and their confidence in maintaining the interim dividend, I suspect that they will return to cash flow positive by year end. Shares are up 30% now and it's certainly an interesting micro-cap. EPS for end of September was predicted to be 1.1p rising to 4.2p next year. Next year's p/e ratio stands at 20 after this mornings rise and the company pays a modest dividend. Could turn out to be a GARP stock, but the price would have to retreat from here to capture my interest.
Sunday 1 November 2015
For a variety of reasons I'm going to be limiting any comments I make about my investing to this blog from here on in. Also, I'm going to try and use a diary style approach. As ever, the blog is just my thoughts and views about stocks I own or indeed don't own, and it goes without saying that I'm not offering advice to others.
Friday proved an interesting day for one of my more recent investments. The share price of Audioboom rose a near 30% on Friday. A brief comment in the weekend newspapers suggest that bid rumours are circulating. We shall see. Audioboom has been one of those companies that I've blown a bit hot and cold with in the past, but a recent interview with Rob Proctor (Audioboom's CEO) tempted me to take a stake in the company at prices around 4p. On current fundamentals the market cap. looks a little heady, but hey this is the world of social media. A look at recent deals will tell you that in comparison to the market cap. of some, Audioboom potentially looks many times undervalued. If bid rumours are true then this could get very exciting. For me, I 'm certainly going to be holding on tightly.
Returning to Rob Proctor's interview it would appear that revenues will increase exponentially from here. From memory last reported revenues were a laughable £50,000. It's not so funny now though. He has suggested revenues in October and November will amount to £450,000 - £500,000. This apparently is just the tip of the iceberg. His reasoning is more than plausible since the revenues are dependant on listens and not registered users. Listens are certainly climbing massively with the Cumulus deal and there is far more to come. If Audioboom decide to go it alone then they will need to raise more cash to increase their workforce, so putting myself in Rob Proctor's place, if a bid comes at a very significant premium to Friday's closing price (and I'm talking a big multiple of that price) I'd take it. Interesting days, weeks and months ahead. He might wait a little while longer I suppose because the more he shows revenues escalating, the more chance of an even higher price for the company. Speculative yes, but potentially exciting and rewarding.
Trakm8, a long term holding of mine, announced a major North American contract this week. The share price hit new highs. This company will remain a core holding for me for some time to come, Trakm8's revenues have largely been UK generated to this juncture, more traction overseas sounds very attractive. For traders the chart has hit another breakout point.
A more recent investment is in a company called Aeorema. This is a tiny company in the events sector. However, it's profitable with no debt and paying a great dividend (around 8% at Friday's closing price). The shares go ex-dividend next week on 5th November.
Recent results showed a fall in profits and the share price hasn't moved much yet. However, the results were better than they had previously flagged in a trading statement and I am hoping the profit dip was a blip in their growth trajectory. Interestingly the FCF was significantly better than last year's. I'm hoping for long term capital growth and income from this tiddler. Any price weakness may tempt me to top up further.
Friday proved an interesting day for one of my more recent investments. The share price of Audioboom rose a near 30% on Friday. A brief comment in the weekend newspapers suggest that bid rumours are circulating. We shall see. Audioboom has been one of those companies that I've blown a bit hot and cold with in the past, but a recent interview with Rob Proctor (Audioboom's CEO) tempted me to take a stake in the company at prices around 4p. On current fundamentals the market cap. looks a little heady, but hey this is the world of social media. A look at recent deals will tell you that in comparison to the market cap. of some, Audioboom potentially looks many times undervalued. If bid rumours are true then this could get very exciting. For me, I 'm certainly going to be holding on tightly.
Returning to Rob Proctor's interview it would appear that revenues will increase exponentially from here. From memory last reported revenues were a laughable £50,000. It's not so funny now though. He has suggested revenues in October and November will amount to £450,000 - £500,000. This apparently is just the tip of the iceberg. His reasoning is more than plausible since the revenues are dependant on listens and not registered users. Listens are certainly climbing massively with the Cumulus deal and there is far more to come. If Audioboom decide to go it alone then they will need to raise more cash to increase their workforce, so putting myself in Rob Proctor's place, if a bid comes at a very significant premium to Friday's closing price (and I'm talking a big multiple of that price) I'd take it. Interesting days, weeks and months ahead. He might wait a little while longer I suppose because the more he shows revenues escalating, the more chance of an even higher price for the company. Speculative yes, but potentially exciting and rewarding.
Trakm8, a long term holding of mine, announced a major North American contract this week. The share price hit new highs. This company will remain a core holding for me for some time to come, Trakm8's revenues have largely been UK generated to this juncture, more traction overseas sounds very attractive. For traders the chart has hit another breakout point.
A more recent investment is in a company called Aeorema. This is a tiny company in the events sector. However, it's profitable with no debt and paying a great dividend (around 8% at Friday's closing price). The shares go ex-dividend next week on 5th November.
Recent results showed a fall in profits and the share price hasn't moved much yet. However, the results were better than they had previously flagged in a trading statement and I am hoping the profit dip was a blip in their growth trajectory. Interestingly the FCF was significantly better than last year's. I'm hoping for long term capital growth and income from this tiddler. Any price weakness may tempt me to top up further.
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