http://michae1mouse.blogspot.com/2018/12/micro-cap-christmas-presents-or.html
Just for clarity, I may or may not have added or sold (partially or fully) any or all of the following company shares or simply done nothing since writing the above article. Indeed, I may or may not have acquired or be acquiring shares in other companies since December that don't appear in the list above. I am not recommending buying or selling any of the companies mentioned, but merely reporting on progress at regular intervals (probably every 3 months).
As I outlined in the article in December, I'm looking at a 5+ years horizon so after just 3 months we are very early on in making any judgements. It's also worth pointing out that the majority of the company shares mentioned are highly illiquid and can move very quickly in either direction so it goes without saying they're not for widows or orphans or the faint hearted.
Anyway, a quick progress check.
First up Mediazest (MDZ). The current share price at 0.09p is up 20%. Since I last reported, Mediazest now has a new Nominated Advisor, it raised £110,000 at 0.10p for working capital and to strengthen the balance sheet, and recently issued a trading statement. The full year performance will be below market expectations, but will show an improvement on the prior year. A company called "In Ur Face Media Limited" has taken a 8.5% interest in the company.
Aeorema Communications (AEO) has released one significant news item (this week) which was it's interim report. The shares stand at 26p (20% down). Despite an in-line statement and robust cash position most of the share price fall occurred this week. They intend to continue dividend payments.
Stilo International (STL) released full year results on 14 March. There were no surprises from earlier trading statements. Despite a fall in revenues they still recorded a £177,000 profit and upped the dividend again by 20%. The balance sheet is still strong with plenty of cash. The share price is 2.35p (down 15%) with the dividend yield now standing at 5%. Incidently, Stilo's progressive dividend policy has meant that the payout has doubled in 4 years.
Immedia (IME) has produced no significant news but the shares have risen to 29p (up 9.5%).
Space and People (SAL) produced a profit warning in January causing the shares to plunge, and have since released their final results. Renewals and new contracts provide for optimism in 2019, as does the payment of a dividend this year at a yield of 3.8% at the current share price. We shall see if they can recover in 2019 of course. The share price is currently 13p (fallen 38%).
Trakm8 (TRAK) released a trading statement that was a bit of a mixed bag in February although they expect to be profitable in the second half of 2018, and promise a much improved performance in 2019. They've sold their property in Dorset for £506,000. The shares are flat at 21p.
One Media IP Group (OMIP) have announced a new contract and the acquisition of a new catalogue. Finals will be on the 09/04/19. The share price stands at 5.05p (down 8%).
7digital (7DIG) have probably released more news than all of the others since December. Initially bad news including the termination of a contract with Juke a significant customer, and the non payment of a tax bill. The market was spooked and the shares plunged. However, since then they settled the tax bill and received a very healthy 4m Euro settlement from Juke, alongside announcing new contracts. The share price has recovered a little and stands at 1.18p (down 49%). Very recently there have been significant changes to the management team.
Crimson Tide (TIDE) released a very positive trading statement which bodes well for their short, medium and long term future. The shares are currently 2.65p (up 20%).
Biome Technologies (BIOM) had an excellent 2018 where it recorded the first profit in it's history, largely due to a stellar performance in it's RF division. Revenues were up 44% at £8.9m with EBITDA at £600,000 and a maiden operating profit of £100,000. The shares have fallen since I last reported chiefly because the RF division won't record the same revenues in 2019, but will outperform results in 2017 which were still very good. Investors appear to be overlooking the progress in the Bioplastics division which will be the real growth driver going forward. The Finals which were released this week read very positively and "the Board is confident in the group's outlook for 2019". The share price is currently 365p (down 33%).
Scientific Digital Imaging (SDI) is the star performer so far at 47p (up 25%). SDI released their interims results with all of the key metrics showing excellent progress, in particular cash generation was up 103% at £1.5m. The group's outlook remains positive. They have since made a further two acquisitions which should further enhance earnings alongside organic growth.
Last but not least is PCF Group (PCF). They've raised capital in the markets to accelerate their impressive growth, and a trading statement which was very encouraging in the short, medium and long term. The share price at 33p is down 8%.
It's very early stages at the moment, but if you'd invested £1000 in each company mentioned then currently you'd be sitting on a loss of 8% at the moment (average share prices), although paper losses would be greater if you include bid/offer spreads and buying fees. Not great, but in the current climate for micro-caps not a disaster either. Current political and economic uncertainty is certainly adversely affecting the performance of very small companies.
It should be noted that 6 companies in the list are now valued at less than £5m namely STL, IME, AEO, 7DIG, SAL, and MDZ with STL, AEO, IME and SAL having excellent balance sheets and plentiful cash (STL, AEO and SAL pay a dividend). Four more of the companies are capitalised below £13m i.e. TRAK, TIDE, OMIP and BIOM with the remaining two less than £100m (SDI and PCF).
As mentioned previously, the gains or losses mentioned above do not relate to my own losses or gains and I may or may not still hold all or some of the above. I may or may not have acquired shares in companies not mentioned in the list. From time to time, I will update my blog with details of my own purchases or sales of companies and report losses or gains. As a very long term holder though, these occasions are relatively rare.
Good luck with your stock picking, and enjoy. As ever no advice is given or implied!!
