Small Cap Report (18 Apr) - INL, LVD, SHRE, FTC, GBG, TEF, PMP, PRV, CRA, SDM

18th Apr '13 by Paul Scott

7 comments 21632 reads

Pre 8 a.m. comments

Inland Homes (LON:INL) announces that it has been successful in the first round of the Government's "Build To Rent" scheme, under which builders can borrow the money to build new houses. Sounds like a good scheme to kick-start some desperately-needed new housing in the South East especially. The statement refers to a £15m loan across two sites for Inland, which is a material amount relative to the size of company, so will be good news if this goes ahead.

Lavendon (LON:LVD) provide rental of powered access equipment ("cherry pickers" & similar), and have issued an in line with expectations Interim Management Statement (IMS) for the calendar year to date. Interestingly, they state that poor demand in Europe (partly due to bad weather) has been offset by strong demand in the Middle East. This seems to be a trend, as I've heard that from several other companies recently. So one increasingly feels that companies need to have a global footprint, or at least operate in growth areas outside of Europe, to offset weakness in Europe which must surely continue indefinitely until the Eurozone crisis is brought closer to resolution?

Share (LON:SHRE) issue a Q1 "Market share and trading update". Unless I've missed something, it doesn't actually say anything about profitability, so seems pointless. It mentions market share gains, and has some interesting background about market sentiment (they are an online stockbroker), but a trading statement is pretty useless if it doesn't tell you whether profits are above, equal to or below expectations.

Post 8 a.m. comments

I didn't spot it on my first sweep of the morning's announcements, but the IMS from Filtronic (LON:FTC) looks good. They "design and manufacture microwave electronics products for the wireless telecoms infrastructure market", which sounds impressive!

Their year end is 31 May, and the IMS covers H2 to date. The key sentence is that "the Board expects that revenues and profits for the Group as a whole will exceed market expectations, with revenues expected to be in the region of £38.5m".

Stockopedia shows consensus forecast of £36.0m and 3.4p normalised EPS, so it looks like a 7% out-performance at the top line, and allowing for operational gearing that might drop through to (finger in…

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johnrosier

18th Apr '13

Totally agree with you on the three stocks that presented. Stadium and Porvair are on my watch list now - hopefully there will be an opportunity to get in at a sensible price at some stage.

sminers

I sat throught the morning session and was impressed with a couple of presentations. I am not sure if Portmeirion's Chairman and FD told you differing information to that in the presentation but I was left a bit in the dark about their growth strategy. They gave us the impression that they were relying on organic growth, not particularly interested in acquisitions and foreign expansion seemed to be hit and miss (as shown by a disastrous Japanese adventure and a surprise uptake in India). I asked if they were reticent about expansion into China because of design protection issues and all I got back was "no absolutely not". So read into that what you will!

grumpy5

Unsurprisingly, I agree with John and you. I have witnessed many presentations in my career, but few as polished and as well-pitched as that of the Porvair CEO. Just a shame I had not heard him a year or two ago!

Chris12nz

Both australia and new zealand have dma without market makers. You can trade opening and closing auctions.

I trade at the smaller end of the market and my trading style is very close to yours.

In general the spread is smaller and there is less volatility in prices as the market maker is not shaking the tree.

Often shares of a market cap of 20 mil will have a smaller spread than a uk stock of 100 mil.

I much prefer trading aussie and nz over uk because of this.

Of course you can find many examples of a stock with no liquidity and massive spreads. However, you will find the stock does not make a profit and you probably dont want to own it anyway.

Btw: love this blog!

jdo

Hello Paul

Just in case you missed it as not mentioned in report, I notice that Snoozebox which I recall you follow announced a contract win today. Revenue from order is over 10% of market cap so not insignificant...

Snoozebox announces that it has secured a contract to supply accommodation for 1350 personnel at the G8 Summit taking place in Northern Ireland in June 2013.
Revenue from the contract will be in the order of £3.8m.

JDO

Beginner

Hello Paul (and everyone)
This is a bit off track, but I hope by posting here I might get some sensible feedback. Everyone seems to be talking about an inevitable and necessary market correction. Is it possible that we are already in the midst of this, and it is occurring piecemeal? Over the last few weeks insurance and financials have already taken a marked fall, gold has now come down and brought other commodities down with it. Oil also now seems to be slipping. The indexes as a whole seem to have been declining steadily for the last month. When the correction comes, is it likely to be a gradual but noticable slip, such as seems to be happening now, will it be a sudden slump, or could it be a combination of the two? I am asking this because I am genuinely a novice, attempting to understand and learn. Please accept my apologies if this is a stupid question.
Regards
B

Paul Scott

Hi Chris12nz,

That's immensely helpful, thank you very much indeed.
You've saved me a lot of time Googling with your excellent summary of the situation in Aus & NZ with DMA and small caps.

Many thanks,
Paul.

Small Cap Report (18 Apr) - INL, LVD, SHRE, FTC, GBG, TEF, PMP, PRV, CRA, SDM

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Paul Scott

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