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