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.