Small Cap Report (30 Jan) - ZZZ, TRCS, HRN, GBG, SPE, RNWH

Wednesday, Jan 30 2013 by

Regular readers of my Blog might recall that I did a write up on Snoozebox Holdings (LON:ZZZ) last summer. The concept intrigued me (they convert standard shipping containers into comfortable temporary hotels, or staff accommodation), although the valuation became pretty stretched, and I sold my small personal shareholding later last year.

I'm thinking about buying back in, after a decent trading statement today. Results for calendar 2012 are expected to be announced in early April, with revenues ahead of, and profit in line with expectations.

So what are expectations? The only forecasts I can find suggest a small loss for 2012, but a £2m profit for 2013 (which translates into 3p EPS for 2013). So the share price of 69p looks very warm, on a PER of 23 times 2013 anticipated EPS, but the market looks ahead and prices in growth, so good growth companies are rarely cheap.

There is encouraging contract news in the trading statement today, which makes it clear that the concept is taking off, so it's really just a roll-out now. The temporary nature of most installations is a bit of a worry, so there might yet be bumps in the road in future, if e.g. they have a period of under-utilisation of the units. The longer-term installations are what really matter, as that generates consistent cashflow, without the costs of repeatedly erecting & dismantling a Snoozebox mobile hotel. Thorpe Park is a good example of where it's working, plus numerous other sites, such as Silverstone.

So it's a great concept, that seems to be working. Roll-out potential could be huge (especially if they achieve global growth), but the valuation does concern me, as a fair bit of growth is already factored in.


Tracsis (LON:TRCS) is a very interesting little company. I was one of around 85 investors who met the CEO, John McArthur at a recent investor forum arranged by Equity Development - clicking on this link takes you to the page on their website where the presentation slides from the companies at the meeting can be viewed - the other two companies presenting were Regenersis and VP Group.

Tracsis specialise in scheduling software which pretty much the whole UK rail industry uses to plan which trains & crews go where,…

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Snoozebox Holdings plc is a United Kingdom-based portable hotel and event experience company. The Company is engaged in delivering hotels, venues and event villages anywhere in the United Kingdom and internationally. The Company operates in two segments: Events and Semi-Permanent. The Events segment includes all activities providing short-term hotel accommodation at events and festivals in both the United Kingdom and mainland Europe. Its Events segment customers include festival/event goers, motorsport race teams, music artists and media/journalists, among others. The Semi-Permanent segment includes all activities in relation to the provision of long-term managed hotel solutions. Its Semi-Permanent customers include consumers, energy sector, construction sector, corporates, councils, police/military/security and universities/colleges. Its subsidiaries include Snoozebox Limited in England, Snoozebox International LLP in England and Snoozebox Do Brasil Empreendimentos Ltda in Brazil. more »

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Tracsis Plc is a United Kingdom-based company that specializes in solving a variety of data capture, reporting and resource optimization problems. The Company’s products and services consists of: Software: Industry strength resource optimization and rail management software, Professional Services: Consulting and technology related professional services across the operational and strategic planning horizon, Remote Condition Monitoring (RCM): Technology and reporting for critical infrastructure assets in real time and Data Capture and Analytics: Collection, collation and analytical services of traffic and passenger/customer data within rail, traffic and pedestrian rich environments. It has contracts with operators within the rail and bus industries. Its subsidiaries include R.W.A. Rail Limited, Peeping Limited, Safety Information Systems Limited, MPEC Technology Limited are few of the company’s subsidiaries. more »

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Hornby Plc is a holding company, which is engaged in the development, design, sourcing and distribution of hobby and interactive products. The Company offers model railway and slot car brands, including Scalextric, Airfix models, Humbrol paints and Corgi die cast models. The Company's geographical segments include the United Kingdom, the United States, Spain, Italy and the rest of Europe. Its products include locomotives, track accessories, train packs, digital train sets, analogue train sets and track accessories, among others. The Company distributes its products through a network of specialists and through its online activities and multiple retailers throughout the United Kingdom and overseas. The Company's subsidiaries include Hornby Hobbies Limited and Hornby Espana S.A., which are engaged in the development, design, sourcing and distribution of models, and Hornby America Inc., Hornby Italia s.r.l, Hornby France S.A.S and Hornby Deutschland GmbH, which are distributors of models. more »

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  Is Snoozebox Holdings fundamentally strong or weak? Find out More »

6 Comments on this Article show/hide all

Matthuntmba 30th Jan '13 1 of 6

Thanks for writing these, I check them out every day. Can I just ask a question about top-slicing? Do you have any rules, i.e once you hit a percentage gain sell some? Or do you just judge each case on its own merit? I am always afraid of cutting my winners.

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Paul Scott 30th Jan '13 2 of 6

In reply to Matthuntmba, post #1


Personally I look at each case individually. If a share has done a particularly rapid move up, then I feel it's usually sensible to lock in some gains, by maybe selling 10-20% (as you can always buy them back).

But it depends on the valuation of the share itself. If it still looks decent value, then I run the gains.
Things that are hitting a PER of 20 about now seem like ideal candidates to lock in some gains.
A market correction could easily take 20% off the price of highly rated stuff, and would then provide a buying opportunity.

It's always tricky to decide when to sell, but I feel top-slicing is a nice strategy as it frees up cash for other things, and you feel satisfied whatever happens to the share price afterwards - if it goes down then you've locked in profit at a higher price. If it keeps going up, then you still benefit from most of the upside.

Cheers, Paul.

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carmensfella 30th Jan '13 3 of 6


The blog just gets better and better..

I do really think you should warm to Renew ! The directors presented at Mello about six months ago and were impressively going about re-engineering the business which is actually a pun ! They are vastly increasing the engineering projects and moving away from standard construction and therefore improving margins. The order book is growing too....increasing revenues and margins are a nice concoction and generally make for healthy growth in profits so I think there is lots of scope for under promise/over deliver here.

RNWH is now my 9th largest holding and I think it could move up the order. Here is the latest WH Ireland broker update this morning


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Paul Scott 30th Jan '13 4 of 6

In reply to carmensfella, post #3

Hi Dave,

Thanks for your comments & the broker note.
I thought you'd mentioned Renew to me before, and I can see why you like it now.

I'm fully invested on other things right now, but if there was any spare dosh around, I'd be picking up some at 92p. By my calcs, a price of 120-130p looks justified, providing there are no mishaps. Plus reasonable divi income whilst you wait.

Cheers, Paul.

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ericb 30th Jan '13 5 of 6

Hi Paul great to see the blog has elevated to stocko !

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Death by Donut 31st Jan '13 6 of 6

Wonder if ZZZ have a spare 8 x 10 container knocking about , could do with it on the site I'm currently working on. :0)
Like the new site Paul.


DbD :0)

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 Are Snoozebox Holdings's fundamentals sound as an investment? Find out More »

About Paul Scott

Paul Scott

Paul trained as an accountant, then spent 8 years as FD for a ladieswear retail chain.He became a professional small caps investor in 2002 to date.Paul writes a small caps report for on weekday mornings. He joined Fundamental Asset Management Ltd as a research associate in 2014, as part of their Small Cap Value Portfolio team. more »


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