On the brink of collapse? What makes a company insolvent?

One of the things that brings fear into the hearts of all investors is when a company fails to release it's results until after hours on the last day before it would be suspended from trading.

That's exactly what a company called Premaitha Health did yesterday (Friday 28th September). Their full year results and details of a proposed placing were released at around 6pm. Gulp! Were investors right to be fearful. You bet they were! In short this company needs massive cash injections just to keep the lights on. I'm not an accountant, but I do wonder if the company is even solvent? I'll explain below.

I've mentioned Premaitha before in a blog post last year as "one to avoid at all costs." Even more reason to avoid now since one of two things will happen. Either the company will fall into administration or shareholders will be diluted into oblivion. Neither option is palatable.

Where do we start? Let's start with the balance sheet.

Cash was around £300,000 and borrowings around £12,000,000 at the end of March. Wow!

Total assets were around £14.6m, and total liabilities £17.2m. That's £2.6m of negative asset value.

It gets worse since £8.4m of NIPT's assets are goodwill and intangibles i.e. unquantifiable and worthless in a fire sale. Strip these out and that's a staggering £11m of negative asset value. Blimey!

Losses for the year totalled £9.6m and cash used by operations around £9.5m.

I don't know what makes a company insolvent, but surely those figures do? Absolutely awful.

It's difficult to see any positives at all. They're frantically trying to raise cash, and are hoping for an extra £2.5m at 10p per share following on from a cash call as recently as May this year which raised £3m at 4.5p.

The cash call will barely keep the company going for a month or two given the perilous state of the balance sheet.

NIPT has had litigation to deal with, but even stripping those costs out of recent results, the situation isn't demonstrably much better.

What of NIPT's growth prospects? What's happened in the 6 months since these full year results?

In the trading update it says this:-

"Six month revenues to 30 September 2018 expected to be up approximately 40% to £3.8m (H1 2017: £2.6m)"

However this is not the measure to look at. This is not a seasonal business. What you should be comparing is growth from H2 March 2018 to H1 September 2018. That's far less impressive. In fact growth went from around £3.6m to £3.8m i.e. £200,000 (around 5.5%). Nowhere near enough to survive without a massive injection of further funds.

Unbelievably the company will have a market cap around £50m if they succeed with the proposed £2.5m fund raise. I kid you not!! It takes your breath away.

All in all the situation looks perilous, and that's an understatement. The company admits that the latest fund raise is a stay of execution and they'll need further funds to survive.

If you're not convinced then read the notes at the bottom of the report. Here's what the auditors say at the very end of the report:-

"Auditor's report: material uncertainty relating to going concern
The Auditor's report includes a material uncertainty relating to going concern.  Extracts from the Auditor's report are reproduced below. In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 1 of the financial statements concerning the group's and parent company's ability to continue as a going concern. The group incurred a loss in the year of £9,482,927 and, at that date, the group had current assets of £4,268,649 and current liabilities of £4,640,943. In their assessment of the group and parent company's ability to continue as a going concern, the directors have focused on the potential for future fundraising, assessing both the expected outcome of the fundraising round in progress at the time of signing the financial statements, and the requirement for a further fundraise in the coming months. The directors have also focused on the rate of growth of revenue in making their assessment. These considerations, in particular the assumed successful outcome of the fundraising currently in progress and the assumed successful outcome of the next fundraising round to be completed within 12 months, along with the other matters explained in note 1 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the group's and parent company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the group and parent company were unable to continue as a going concern." Please note well, "indicate the existence of a material uncertainty which may cast significant doubt about the group's and parent company's ability to continue as a going concern." As ever, this is a blog with my thoughts and is not intended for advice. However, I personally wouldn't touch this with a bargepole now or anytime in the future, and if I already held shares I'd be heading for the exit first thing Monday morning. As ever, AIMHO.

Immedia, Concepta and Zinc Media

Let's start with Immedia, a company I've written about very recently in this blog post:-

http://michae1mouse.blogspot.com/2018/09/if-music-be-food-of-love-play-on.html

Immedia released their half-year results today, and I haven't much to add to my recent post. As expected, the results were significantly better than last time.

There was a 9% increase in revenue to just over £2m, EBITDA turned positive at £40,000 against a loss of £104,000 in 2017, and cash on the balance sheet has improved significantly to £149,000. The headline loss is around £91,000 which is again significantly better than 2017. The company remains virtually debt free. Full results are below:-

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/IME/13806214.html

The only things I will add to the previous report is that they have a great client list including JD Sports and Subway where they say:-

"It is also pleasing to report that recent major contracts with both JD Sports and SUBWAY® are exceeding Board expectations."

and they most recently won a large contract with a major UK high street financial services institution.

The tone of the report reads very positively and they are comfortable with meeting market expectations for the full year. I feel very encouraged by the progress they are making and impressed with the turnaround, particularly the cashflow. I'll be sticking with this one, and as ever, being a minnow with a strong balance sheet, another major contract award could see the share price significantly higher.

Now to Concepta. I've mentioned this company before, it's a "story" stock ("jackanory" comes to mind). What does the company do then? Who cares? It's an absolute mystery to me why PIs bother with these companies, it really is? CPT released it's interims today. How have revenues grown for this wonderful growth stock I wonder? Revenues have gone from zero last year to (wait for it) zero this year. Wow! So what does the report say? Again, who the bloody hell gives a monkey's? Investors just get diluted into oblivion with these companies whilst the jam grows a pair of legs and keeps running further and further away.

Even after today's 21% kicking, CPT has a market cap. near £7m. It'd be overvalued at a market cap of zero in my opinion. When there are companies out there with real revenues, profits and good cashflow at lower market caps then why would you bother with this?

Finally Zinc Media. I hate these types of company. It used to be called Ten Alps and didn't impress in it's previous incarnation either. It sits near it's all time lows today after a 12% drop following (at best) lacklustre results. Actually I have a bit of a jaundiced view of these production/distribution companies following my worst investment ever in a company called DCD Media. Here is a comment I made on the ADVFN bulletin boards which pretty much sums up my aversion to this sector:-

"The reason I wouldn't touch this lot with a barge pole is through a lesson learnt early in my investing days where I built a stake in a production/distribution company called DCD Media. I learnt the following about these types of companies, and personally wouldn't touch any of them in future:-

1) Margins in production are generally p*ss poor. Basically they don't make much money. Distribution is better but even then not great.

2) The only value in a Production company is it's staff. In the case of DCD Media they heavily overpaid for acquisitions. After a very short period of time most key production personnel just upped and left. All the value of the acquisitions is then lost, commissions cease and all value is written off.

3) At the drop of a hat, the tv companies can just decide that they're no longer interested in re-commissioning a series and revenues fall off a cliff.

4) Take a look at the balance sheet. If you strip out goodwill and intangibles then the company has negative asset value. Goodwill and intangible assets almost certainly relate to the acquired production companies (see above). In other words, it has no tangible value.

I could go on and on and on. Good luck if you want to take a punt, but I'd be very careful. Imo these types of companies shouldn't be listed."

I might be being unfair to Zinc Media since it does produce substantial revenues, but I've no real enthusiasm for researching this type of company. So as ever, these are just my thoughts and you must do your own thorough research.

twitter: @michae1mouse

Scientific Digital Imaging - building nicely!

Scientific Digital Imaging is a company I haven't mentioned before, but I bought a healthy chunk of shares back in December 2016. So far, so good and I've no intention of selling any in the near future even though my holding is showing a gain of 150%. If they continue their healthy progress then the share price has far further to run in the short, medium and long term.

Here's what they're about:-

http://scientificdigitalimaging.com/about-us/

"Scientific Digital Imaging plc (SDI) designs and manufactures scientific and technology products for use by the life science, healthcare, astronomy, consumer manufacturing and art conservation markets through the Synoptics brands (Syngene, Synbiosis and Synoptics Health), the Atik Cameras brand, the Opus Instruments brand (Osiris), Sentek, Astles Control Systems, Applied Thermal Control as well as the recently acquired, Quantum Scientific Imaging.

SDI continues to grow through its own technology advancements, as well as through pursuing strategic, complementary acquisitions."

Yesterday they released a trading update and details of a further acquisition.

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/SDI/13802960.html

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/SDI/13802796.html

In short the year ending April 2019 remains on track, and the new acquisition is small, but excellent value and should contribute positively to earnings in it's first full year as part of SDI. The acquisition has been funded from existing cash resources.

SDI has a current market cap. of around £38m, a gross margin around 66%, and in the year ending April 2018 reported an operating profit of £1.8m. SDI doesn't currently pay a dividend, but is an excellent cash generator from it's operating activities.

On a historic p/e basis (around 25) it doesn't look cheap, but with an excellent recent record for organic growth and judicious earnings enhancing acquisitions, that p/e ratio is more than justified, particularly in context of the (shall we say) more heady ratings that some growth companies are currently on.

Two Directors recently bought some shares in SDI:-

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/SDI/13805673.html

David Tilston (a non-exec) bought £4140 worth whilst Jonathan Abell (CFO) bought a more significant amount and maiden holding of 59608 shares at a cost of £25512. It's always nice to see the CFO buying a substantial amount.

I really like this company as indicated earlier, and I'll be interested to see their half-year results released 17 December 2018.

As ever, it's just my thoughts and not an attempt at a tip sheet so always DYOR.

twitter: @michae1mouse

It's a steal!

It's a fact that in the long run 'value' shares outperform 'growth' shares. What I look for is a growth company that's currently great value. It's a bit like looking for hen's teeth sometimes, but they are there to be found most notably amongst the micro-caps.

Here's some financials for you:- This company has a £3m market cap with a current NAV of £3.7m (a discount of 19%). Whilst part of that NAV is goodwill and intangibles, the company boasts a cash balance of £1.44m.

The company has zero debt.

In the past four years turnover has increased as follows:-

2014 -      £1.26m
2015 -      £1.52m (+21%)
2016 -      £1.76m (+16%)
2017 -      £1.89m (+7.4%)

EPS was 0.14p in 2014 and doubled to 0.28p in 2015. In 2015, 2016 and 2017 EPS was largely flat at around 0.28p. The historic p/e ratio is around 9 (2017).

Cash on the balance sheet has been as follows:-

2014 -      £1.09m
2015 -      £1.09m (+0%)
2016 -      £1.30m (+19%)
2017 -      £1.47m (+13%)

The company pays a progressive dividend that has increased from 0.05p in 2013 (excluding the special dividend of 0.10p) to 0.10p in 2017. That's a 100% increase with a further increase expected in 2018 (interim dividend has been hiked by 25%).

Gross margins stand at around 98%-99%. Yes you've read that correctly.

Now that's a 'value' company!

Why are the shares currently rated so lowly, and what about the growth going forward?

Well firstly, 2018 is going to see a dip in earnings and from the interim results it appears that the company is going to be around break-even for the full year. This is "principally due to the expiry of a three year customer contract for Migrate". Migrate being one of their principal software offerings. The market is aware of this and from the figures above, it seems that this information is more than priced in (ridiculously so in my opinion).

Principally the company boasts three key products OmniMark, Migrate and AuthorBridge (a very recent addition). It's fair to say that sales of all three have been steady rather than spectacular so far.

With 99% gross margins however, they don't need to be spectacular, steady will be just fine (do the maths!). It should also be noted that the company boasts an impressive client base.

The expiry of the Migrate contract this year should prove to be a temporary blip in an otherwise steady growth trajectory, and (hopefully) a resumption to growth will occur in 2019 and beyond (year end is December), particularly with sales of AuthorBridge beginning to gain traction.

The company in question is Stilo International, and if they do return to growth in 2019 then I fully expect the share price to re-rate significantly from it's current lows. Meanwhile whilst you're waiting you'll be entitled to a 4%+ dividend with the comfort of a very strong balance sheet.

At the current share price Stilo is a real steal in my book!

Please note that Stilo is a real minnow and the shares highly illiquid. From observation on Friday, 22,000 shares traded (as far as I can see) moved the bid up 0.3p (6%). 

As ever, I am a holder of shares and I'm not giving advice so please DYOR.

twitter: @michae1mouse

Zesty and promising or just a lemon?

Serial disappointer Mediazest gave a welcome update to the market yesterday with an excellent (and somewhat unexpected) trading update:-

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/MDZ/13793984.html

In short "for the half year ending 30 September 2018, the Board expects to report revenue in the region of £1.8million (2017 £1.3million) and a maiden Net Profit for the Group of approximately £90,000 (2017: loss of £149,000)."

Now that's impressive for a company with a market cap. of less than £1.5m.

So what's my relationship with this company? Well I have a small amount invested in Mediazest which is just enough to keep me interested.

Late 2016, almost on a whim I bought a reasonable sized holding in MDZ when I was seduced by it's lowly market cap., promises of imminent profitability and hints at game changing contracts in the offing. Sadly, over the next year, these promises and game changers came to nought and the share price sank accordingly and I was left sitting on paper losses.

Bizarrely, at the back end of 2017, out of nowhere up pops a guy called Ian Hallett who begins the process of buying 20% of Mediazest, and the share price quickly accelerates upwards. I'm not complaining, I sell the majority of my shares into the rise and make around 10%. Not great but significantly better than the losses I'd previously been sitting on.

In truth, I half expected an offer to materialise for the company so I held a few but I'd reflected on my initial impetuousness and decided that given Mediazest's history and less than convincing balance sheet that I couldn't look a gift horse in the mouth and was largely happy to sell the vast bulk of my shareholding for a small profit.

Equally bizarrely, Ian Hallett then sold his entire 20% holding within a year and the share price slumped again as quickly as it had risen, so overall I feel I've made the right decision but I'm equally happy to have a small holding in Mediazest given yesterday's trading update.

I've mentioned a couple of bear points and until we see the interims it's impossible to guess how the balance sheet looks. Clearly cashflow and cash at hand are important measures that were not referred to in the trading update. However, the fact that they've made a maiden profit (albeit for six months) is very encouraging, particularly in the context of a significant amount of recurring revenues being
generated and the associated higher margins. It's also worth noting that Mediazest boast an impressive client roster including Volkswagen, Clydesdale and Yorkshire Banking Group, HP, Opel, BMW, Ted Baker, Diesel, Kuoni, HMV, Halfords, Hyundai and several others. That's not bad is it?

I consider my holding here speculative. However, given the market cap. and illiquidity of dealing in the shares, if Mediazest do continue their growth and consistently deliver increasing recurring revenues and profits going forward then the share price will undoubtedly multibag.

As ever, these are just my thoughts and dealings and no advice is intended.

twitter: @michae1mouse

Interesting assumptions

In a follow up to my previous post on Trakm8, whilst I was unable to attend the recent AGM, I've just caught up with the video now available on their website:-

https://www.trakm8.com/corporate-videos

If you're a shareholder or prospective share holder then it's an hour well spent, and is very informative. Most notably for me are the assumptions looking forward.

They are certainly ambitious assumptions in terms of the growth in number of units.

One of the slides assumes that by 2021 (2.5 years) recurring revenues could be £26m.

John Watkins says that recurring revenues would then cover overheads and the profits reported will be the gross margin on everything else they do.

Back of a fag packet guesstimates by me. Assume recurring revenues make up 50% of total revenues then £52m revenue. Gross margin at 49% of £26m is approx. £13m profit.

P/E ratio of 20 for a growth company gives a market cap. of £260m. That's a share price of over £7.

If they achieve anywhere near those assumptions then the next 2.5 years could be rewarding from a current share price of 62p.

As ever DYOR, but short, medium and long term the company is looking cheaper by the day.

Twitter: @michae1mouse

How bizarre ?!

You know that a company's shares are going to plunge 20% when it opens up with the first paragraph of a trading statement as follows:-

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/TRAK/13787221.html

"The Board is pleased to report that the outlook for the year ending 31 March 2019 is in line with market expectations, with an improved financial performance driven by continued growth in the telematics business more than offsetting the eliminated CEM activities. "

Yes of course I'm being sarcastic, but that's exactly what happened to Trakm8 shares when they released a trading statement this morning. How utterly bizarre? Or is it?

Reading the full statement, John Watkins, Trakm8's Executive Chairman goes on to confirm that the first half has been weaker than the comparable period last year, but that the second half should be considerably stronger than last year, and hence an in-line performance.

Clearly the market doesn't believe that "in-line" with market expectations will be achieved given today's 20% fall in the share price.

It's still a little strange since the first half underperformance was flagged up with the 2018 full year results back in early July. A 20% fall in the share price. Really?

Whilst the £1.6m shortfall in low margin CEM activities was expected since they've been exiting this area for the last two/three years (and it should now be complete), perhaps investors have been spooked by the following sentence,

 "however at one of our significant insurance customers, telematics policy cancellations have modestly exceeded new policy sales."

Maybe it's just me, but I can't say I'm particularly concerned given the final paragraph of the trading statement?

Besides, the car insurance market is highly competitive, surely you could expect this from time to time? In addition, Trakm8 boast both Direct Line and Marmalade as clients amongst others. If I had a criticism about this issue then I'd question why they bothered to mention it at all?

The final paragraph has this to say:-

"The second half of the year will benefit from resumption of volume shipments to the significant customer referenced above and increased momentum in the fleet management market.  The Directors are also confident that new contracts to be awarded, particularly in the insurance space, will drive additional revenues in the second half of the year."

Anyway, whatever, the share price declined 20% today on higher than usual volumes and in fact has been declining in fits and starts since it reached nearly 400p towards the end of 2015 and early 2016.

The share price currently sits at 59p and the company has a market cap of £21m.

Death, doom, damnation and destruction! Sack the board! The shares are heading to zero. Results are awful. Where are the revenues? Where are the profits? Where is the cashflow? This is a dying industry and growth has stopped altogether.  I urge you to sell before it's too late!!! I'm taking the p*ss of course. Let's have a look at the financials.

Firstly, last year's full year results show revenues at around £30m with gross margins at 49%. Basic profits were £1.6m with adjusted profits coming in at £2.8m which puts the shares on a historic p/e ratio of 13 and 7 respectively. Assuming that the figures for the full year are better than 2018 then Trakm8 is already looking cheap.

Of the £30m revenues reported, more than a third were of a recurring nature which is always very welcome. The NAV stands at £22m (although largely attributable to intangible assets) and so the shares currently trade at a discount to NAV with a low forward p/e ratio. Operating cashflow was £4.7m in 2017/2018 and they had £3.4m cash on the balance sheet. The balance sheet looks pretty solid to me. 

In other words, there's an awful lot of bad news already priced in.

In early August they informed the market that they were doubling the size of Group HQ and manufacturing facility in Coleshill. Correct me if I'm wrong, but it's not something I think they'd do on a whim? The last reported number of devices in operation where 251,000 (March 2018) and the new facilities are capable of producing 1,000,000 such devices per year. That's quite encouraging isn't it?

I can't predict the wild gyrations of the share price over the next 6 months or so given the highly illiquid nature of trading in Trakm8 shares (and neither can anybody else btw), but the company is very cheap in my opinion, and as ever I'm here for the long term with high expectations for the next two/three years as the devices in operation continue to grow.

Incidentally, it's worth comparing and contrasting the financials of Trakm8 with Quartix (same space)which is currently on a market cap. of  £141m and has exited the insurance sector altogether.

As always, I offer no investment advice and just share my personal thoughts.

twitter: @michae1mouse

Buy one get one free (BOGOF)!!

I've been umming and ahing about whether or not to mention this little company for some time. Despite being up 160% on my investment already after adding in several tranches over time, I still think the company is (potentially) ridiculously cheap. Any pullbacks in the share price and I certainly will consider adding further depending on the circumstances.

The company in question is Biome Technologies.

There is a certain irony in my investment here since I've essentially bought into their Biodegradable plastics story and yet that is the division that is losing money presently. The exciting part though is it looks likely that's about to change with a medium and long term view. More later.

Why have bought a loss maker then? Isn't this just another overvalued "story" stock? Why do I think it's cheap?

Well in short, the company boasts two divisions. Alongside the Bioplastics division sits the Stanelco RF Technologies Division which designs, manufactures and supplies fibre optic furnaces largely to customers in Asia. This division is currently highly profitable, and in the 6 months ending in June produced an operating profit of £1.3m. Now take a moment to consider that operating profit in the context that the whole company is valued at just over £12m. That is stupidly cheap!

Let's temper it though with the fact that the Bioplastics division is still loss making, and in fact made an operating loss of £0.3m on revenues that had fallen £0.3m from £1.2m in 2017 to £0.9m in 2018. 

So why does the Bioplastics division excite me so much?

I shouldn't need to mention the backdrop at all since conventional plastics are making a great job of slowly but surely causing massive damage to our planet, and thank goodness that the world is gradually waking up to this huge problem. So this is an ethical investment, but also it appears that Biome are in a sweet spot to provide an environmentally friendly alternative. 

Whilst loss making at this stage, the interims suggest that the tide may be turning for this division. They had this to say in the interims:-

"It was noted in the July 2018 trading update that two projects in particular are advancing encouragingly through the development phase and, if successful, could lead to substantial revenues in 2019 and 2020. These projects are both with new customers. One of them has now completed its technical development phase in the USA and commercial production is expected in 2019. The second project, being developed in continental Europe, has passed an important milestone in recent weeks and work continues to support an aggressive launch timetable with the customer with commercial revenues being anticipated in 2019. Additionally, in recent weeks an initial six-month feasibility study, supported by an international consumer goods company, has been completed and discussions are underway regarding a product launch in 2020."

and

"Positive interest remains in the UK, with the Government looking to progress innovative material solutions to the problem of single use plastics in the medium term. This may provide an opportunity to accelerate our work in industrial biotechnology solutions and Biome is engaged with a number of parties in this area."

As far as I'm aware, the interims were the first time in the company's history where they produced an operating profit (£200,000). Put that alongside a strong balance sheet which boasts £2.3m in cash and zero debt then Biome still looks exceedingly cheap.

Of course there is no guarantee that the Bioplastics division will ultimately deliver since no company is risk free, and there are always potential banana skins, but there is a great margin of safety here with the RF Technologies Division which on it's own is arguably worth far more that the £12m that the whole company is valued at presently. In the interims the company said:-

"Strong demand for fibre optic furnaces continues into the second half of this year. The design and manufacturing teams have responded very well to the rapid and significant upturn in activity. The manufacturing footprint was expanded during the period providing increased production capacity."

Whilst I always sound a note of caution with any investment, this is certainly one of the most promising minnows that I've ever bought into. In summary, Biome is profitable, cash generative, strong balance sheet and with the potential for huge short, medium and long term growth.

As ever this is just my rationale and reasons for holding shares in the company, and is not intended as investment advice.

N.B. Just be aware of the illiquidity of dealing in Biome shares. I invest for the long term.

hTTps://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BIOM/13775570.html

"If music be the food of love, play on"

I've suddenly realised I've developed an unhealthy appetite for investing in 'music related' companies in my portfolio. I've mentioned 7digital many times in the past, here's Simon Cole with a neater and shorter summary than I could give about the investment case for this company:-

https://www.voxmarkets.co.uk/company/7DIG/?mediaAssetId=5b8e4ba6a768f800118d1463&jwsource=cl

I've also mentioned a company called One Media IP (OMIP), and here's another quick and neat summary by Michael Infante about his company:-

http://onemediaip.com/news/industry-update-summer-2018/

It goes without saying that you need to do far more research than listening to or reading a quick overview of these companies before investing, but they are in essence simple business models to understand which I'm a great believer in. If it's a good enough rule for Warren Buffett then it's good enough for me. ;-)

Here's one I haven't mentioned before. The company in question is Immedia (IME).

I've struggled a bit with an investment here. It's a micro-cap and has possibly the most illiquid company shares I've ever dealt in. It's market cap. is around £4m and it has next to zero debt. I'm expecting the Interim results around the end of September. In keeping with the rest of this blog, here's a brief summary of the company by CEO Bruno Brookes (yes that Bruno Brookes ex-R1 DJ - yikes!! ;) :-

https://www.insider-trends.com/music-as-a-media-opportunity-immedia-on-why-brands-can-use-audio-to-reach-their-audiences/

When I say that I've struggled a bit with an investment here, I mean I've kept falling in and out of love with the company. More by luck than judgement I've had a successful run trading the shares whilst keeping a decent holding to run for the long term (I wasn't intending to trade but just kept changing my mind about company prospects). I've made 112%, 32% and 16% respectively. Indecision has proven to be lucrative in this instance.

Results for the full year 2017 were frankly horrible, but 2018 looks far brighter for a £4m minnow. Here's the outlook statement:-

https://uk.advfn.com/stock-market/london/immedia-broadcasting-IME/share-news/Immedia-Group-PLC-Final-Results-for-the-year-ended/77179409

"2018 has started very positively for the Group. The recent announcement of a substantial installation rollout in branches of a major UK financial institution is just one of numerous new business opportunities currently in play.

Our collective knowledge and skills-set have underpinned our ability to integrate, consolidate and strengthen the Group's product and service offering which, by the 2017 year-end, has also afforded us greater marketing and client opportunities in our key target sectors.

The confidence referred to at the start of this statement is palpable within the business and reflected in the amount and quality of work accomplished by all the team in both Aberdeen and Newbury. I would like to thank each and every one of them." 

I do recommend that you read the whole report.

I'm currently feeling very optimistic about 2018 for Immedia, and added to my core holding at prices around 22p. Being a long term investor at heart, I shall now hopefully hold on until this becomes a multi-bagger (fingers crossed anyway!)

A few extra points of interest include:-

1) In 2016 they acquired a company called AVC Media which took a while to bed in, but may now be starting to bear fruit

2) They own 6,000,000 shares in AudioBoom (BOOM).

and also from the 2017 report they say:-

3)
     a) Costs have been optimised to the size of the business, with c.GBP250k of annual cost removed

     b) The Group remains virtually debt free and is now cash generative

     c) Having launched in late 2017 our new engagement platform DreamStream X, interest levels in            Immedia's products and services are exceptionally high and point to a much-improved financial         performance in 2018 compared to the disappointing results in 2017 

As ever please do thorough research, and this is just a personal blog which reports my own thoughts and ideas. Good luck.

Exciting prospects but with added risk

OMIP (One Media IP) is not a company I've written about before on my blog, but I have briefly commented on ADVFN.

https://uk.advfn.com/forum/search?q=michaelmouse&post_poster=on&post_post=on&index=posts&thread_id=28458514

I bought into this micro-cap at prices around 3.5p, and took my original stake off the table when the share price doubled in a very short time frame. I've left the profit to run for the long term. The re-rating was chiefly due to a return to profitability and cash flow generation and significantly aided by "so-called" heavyweights Michael Grade and Ian Dunleavy joining the board of Directors.

The company appealed to me because of it's lowly valuation at the time, alongside it's past ability to generate healthy profits, cash flow and pay a dividend. It was also debt free. All the signs were that after a temporary hiatus OMIP was returning to growth which has now been confirmed by recent results. A lovely, overlooked little company in other words. I took out my original stake after the share price had doubled simply because I couldn't see how they could significantly ramp up growth without a larger war chest.

All that changed yesterday with an over subscribed fund raise and debt financing which will enable the company to acquire the rights to more valuable music catalogues that they can then monetise.

https://uk.advfn.com/stock-market/london/one-media-OMIP/share-news/One-Media-iP-Group-Plc-Proposed-Fundraise-of-a-min/78169362

https://uk.advfn.com/stock-market/london/one-media-OMIP/share-news/One-Media-iP-Group-Plc-Results-of-the-Placing-and/78174779

This is an exciting development, although with added risk because of the debt funding. However, with the expertise they have available, I can imagine that any purchases will be very prudent and have the potential to significantly enhance earnings in future. It's also worth keeping your eye on their TCAT services sales which are used to monitor music conflicts and potential copyright infringements. Sales are in their infancy but there is excellent potential here also. The placing price of 6p announced yesterday was disappointing but only in the context of the recent share price, and my remaining holding is still 82% in profit and a "free" ride. OMIP will now be a very long term hold for me, and will hopefully offer significant upside from here, but as ever DYOR.