Mediazest released their interim results this morning rather earlier than I'd anticipated (in 2017 it was mid December). I'm impressed, pleased and will continue to hold my existing shares in the company. I last commented on Mediazest in September:-
http://michae1mouse.blogspot.com/2018/09/zesty-and-promising-or-just-lemon.html
This mornings interims were very much in-line with the encouraging trading update and the key metrics are as follows:-
Revenue up 36% at £1.819m, EBITDA at a healthy £156,000 (they recorded a loss in 2017) and a maiden profit of £90,000 (they made a loss of £149,000 in 2017 at this juncture).
As mentioned in my previous blog post, the cash position is the worry for Mediazest, and on the face of it cash of £12,000 recorded at period end is insufficient. However, this is because of a late payment of EUR130,000, the bulk of which has now been received and cash is therefore healthier than the headline figure.
Gross margins have improved by 3 percentage points to a healthy 51% largely driven by their pursuit of recurring revenues which currently stand at around £700,000. They hope by year end these will increase to around £800,000 and cover 50% of costs on an annual basis.
Whilst we're all aware of uncertainty in the UK retail market, Mediazest are having considerable success overseas and :-
"the Group is developing, currently, several roll out / substantial deployment opportunities
which would enable the Company to show further progress both in the current and future
reporting periods."
Their client list remains very impressive, and as far as I'm aware, this is their best half-year
performance to date?
Given all the above and a lowly market cap of around £1.4m, I don't see any reason not to stick
with the shares I already own and see how things develop in the future.
Monday, 5 November 2018
Thursday, 1 November 2018
Jam delivered and currently stuck in a jam!
There were very few RNS announcements in October from companies that I'm interested in, but November has started with a terrific trading update from Biome Technologies:-
https://londonstockexchange.com/exchange/news/market-news/market-news-detail/BIOM/13850420.html
This was a Q3 update to 30 September. It reads very well indeed.
Firstly, overall revenues are £7m for the first 9 months of 2018 which is a 56% improvement on last year. Significantly, this 9 month revenue figure is already well ahead of the full year figure from 2017 which came in at £6.2m.
As mentioned in my previous blog post, it's the RF division that's outperforming at the moment with £5.5m of the £7m revenues generated coming from the exceptional demand for fibre optic furnaces in 2018. The remainder of 2018 also looks strong for this division, and the outlook for 2019 sounds optimistic with orders "reasonably strong" at this stage.
The Bioplastics division is the laggard at this juncture, but I believe that this division has huge potential given the publicity regarding the environmental damage being caused by conventional plastics.
Whilst the revenues generated in 2018 by the bioplastics division are marginally down on last year at £1.5m (1.7m in 2017), 2019 could see a significant uplift in revenues. Most of the revenues from this division are currently "for the commercialised outer packaging and non-woven filter mesh for the US coffee pod market." It's worth noting that "a contract for the supply of material for the rigid ring material in this coffee market sector has been signed recently and commercial revenues are expected to commence in Q1 2019 following the completion of final validations."
Even more significantly, there are two projects underway, one in the US and one in Europe, that could lead to substantial revenues in 2019 and 2020 with "further new customer relationships (are)underway within this division which should lead to exciting projects emerging in 2019."
I'm still very excited by the prospects here, and it's a long term hold for me. The shares rose sharply this morning, but they are extremely illiquid and have since fallen back a little from profit taking (the shares are up around 4% as I write).
At the opposite end of the scale, 7digital's share price has been falling sharply in recent weeks. There is or has been a relatively large seller in the market recently which explains some of the decline:-
https://londonstockexchange.com/exchange/news/market-news/market-news-detail/7DIG/13826986.html
A major issue is that many investors are probably sitting on their hands waiting for some positive news from the company. Whilst they work towards cashflow and profitability, they have burnt through cash very quickly and recently needed an additional £1.5m loan from three shareholders for working capital as the company completes it's restructuring.
https://londonstockexchange.com/exchange/news/market-news/market-news-detail/7DIG/13843278.html
Promises of cashflow positivity and profitability accompanied by one or two large client contracts is needed from 7digital. So far it's been too many promises without the delivery, and we need under-promising and over delivering from now on.
I remain hopeful that 7digital can achieve their goals, and of course if they do then the share price will recover and move sharply higher. Ever hopeful, but it's never comfortable until you see the evidence of success rather than just jam tomorrow.
One thing that's worth noting is that Biome Technologies was very much a "jam tomorrow" company and many investors will have left the party never to return. That's a pity because it looks like the party may well be just starting? Biome's jam is being delivered now, let's hope 7digital does exactly the same. At the moment 7digital appears stuck in a jam.
Finally and very briefly, PCF have today announced the completion of an earnings enhancing acquisition following an encouraging trading update in late October. I hold.
As ever DYOR, no advice offered or given.
https://londonstockexchange.com/exchange/news/market-news/market-news-detail/BIOM/13850420.html
This was a Q3 update to 30 September. It reads very well indeed.
Firstly, overall revenues are £7m for the first 9 months of 2018 which is a 56% improvement on last year. Significantly, this 9 month revenue figure is already well ahead of the full year figure from 2017 which came in at £6.2m.
As mentioned in my previous blog post, it's the RF division that's outperforming at the moment with £5.5m of the £7m revenues generated coming from the exceptional demand for fibre optic furnaces in 2018. The remainder of 2018 also looks strong for this division, and the outlook for 2019 sounds optimistic with orders "reasonably strong" at this stage.
The Bioplastics division is the laggard at this juncture, but I believe that this division has huge potential given the publicity regarding the environmental damage being caused by conventional plastics.
Whilst the revenues generated in 2018 by the bioplastics division are marginally down on last year at £1.5m (1.7m in 2017), 2019 could see a significant uplift in revenues. Most of the revenues from this division are currently "for the commercialised outer packaging and non-woven filter mesh for the US coffee pod market." It's worth noting that "a contract for the supply of material for the rigid ring material in this coffee market sector has been signed recently and commercial revenues are expected to commence in Q1 2019 following the completion of final validations."
Even more significantly, there are two projects underway, one in the US and one in Europe, that could lead to substantial revenues in 2019 and 2020 with "further new customer relationships (are)underway within this division which should lead to exciting projects emerging in 2019."
I'm still very excited by the prospects here, and it's a long term hold for me. The shares rose sharply this morning, but they are extremely illiquid and have since fallen back a little from profit taking (the shares are up around 4% as I write).
At the opposite end of the scale, 7digital's share price has been falling sharply in recent weeks. There is or has been a relatively large seller in the market recently which explains some of the decline:-
https://londonstockexchange.com/exchange/news/market-news/market-news-detail/7DIG/13826986.html
A major issue is that many investors are probably sitting on their hands waiting for some positive news from the company. Whilst they work towards cashflow and profitability, they have burnt through cash very quickly and recently needed an additional £1.5m loan from three shareholders for working capital as the company completes it's restructuring.
https://londonstockexchange.com/exchange/news/market-news/market-news-detail/7DIG/13843278.html
Promises of cashflow positivity and profitability accompanied by one or two large client contracts is needed from 7digital. So far it's been too many promises without the delivery, and we need under-promising and over delivering from now on.
I remain hopeful that 7digital can achieve their goals, and of course if they do then the share price will recover and move sharply higher. Ever hopeful, but it's never comfortable until you see the evidence of success rather than just jam tomorrow.
One thing that's worth noting is that Biome Technologies was very much a "jam tomorrow" company and many investors will have left the party never to return. That's a pity because it looks like the party may well be just starting? Biome's jam is being delivered now, let's hope 7digital does exactly the same. At the moment 7digital appears stuck in a jam.
Finally and very briefly, PCF have today announced the completion of an earnings enhancing acquisition following an encouraging trading update in late October. I hold.
As ever DYOR, no advice offered or given.
Tuesday, 23 October 2018
Fond memories - not really!
A brief blog post from me today. It's a company whose shares I don't hold, but have in the dim and distant past. Talking of dim, I remember taking a loss of 27% back in 2004. More positively and looking at the current share price that could have been a lucky escape? We'll see in the fullness of time.
The company in question is Coral products. If memory serves me correctly, I vaguely remember them producing CD casings? Do you remember CD's? Yep, that's why the share price went into freefall I think? Like most investors my memory becomes a little hazy when recalling the duff investments. Anyway, that was then and this is now. Perhaps Coral products is about to rise from the ashes? If they don't go under it's surprising how many companies rebuild and prosper. They can be the most lucrative purchases if you catch them near to their recovery path.
Anyway CRU released an encouraging trading update today and the shares are up 5% as I type.
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/CRU/13838153.html
Firstly, I should point out that they're still a specialist in the design, manufacture and supply of injection moulded plastic products. So what are the all important figures?
The market cap is just over £8m, and the results to the end of April 2018 showed a loss of £370,000 on revenues around £23.5m, although the underlying operating profit was £879,000 with earnings per share of 0.84p. Net assets came in at £13.2m, but just over £7m of that is goodwill and intangibles.
The company does generate cash, but had just £471,000 in cash on the balance sheet against approximately £6m debt back in April. Gross margins are ok at around 35%.
In summary, it's not one that interests me too much at the present since I always compare the financial metrics, market cap and prospects against company shares I already hold, and at the moment I'd tend to add more to some existing holdings rather than add CRU.
However, others may beg to differ or wish to do far more research than I have.
Incidentally, on the subject of plastics, if you haven't read my post on Biome Technologies then you may wish to do so by clicking the link below:-
http://michae1mouse.blogspot.com/2018/09/buy-one-get-one-free-bogof.html
I hold.
twitter: @michae1mouse
The company in question is Coral products. If memory serves me correctly, I vaguely remember them producing CD casings? Do you remember CD's? Yep, that's why the share price went into freefall I think? Like most investors my memory becomes a little hazy when recalling the duff investments. Anyway, that was then and this is now. Perhaps Coral products is about to rise from the ashes? If they don't go under it's surprising how many companies rebuild and prosper. They can be the most lucrative purchases if you catch them near to their recovery path.
Anyway CRU released an encouraging trading update today and the shares are up 5% as I type.
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/CRU/13838153.html
Firstly, I should point out that they're still a specialist in the design, manufacture and supply of injection moulded plastic products. So what are the all important figures?
The market cap is just over £8m, and the results to the end of April 2018 showed a loss of £370,000 on revenues around £23.5m, although the underlying operating profit was £879,000 with earnings per share of 0.84p. Net assets came in at £13.2m, but just over £7m of that is goodwill and intangibles.
The company does generate cash, but had just £471,000 in cash on the balance sheet against approximately £6m debt back in April. Gross margins are ok at around 35%.
In summary, it's not one that interests me too much at the present since I always compare the financial metrics, market cap and prospects against company shares I already hold, and at the moment I'd tend to add more to some existing holdings rather than add CRU.
However, others may beg to differ or wish to do far more research than I have.
Incidentally, on the subject of plastics, if you haven't read my post on Biome Technologies then you may wish to do so by clicking the link below:-
http://michae1mouse.blogspot.com/2018/09/buy-one-get-one-free-bogof.html
I hold.
twitter: @michae1mouse
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