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:-

"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

 

 

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.

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."