Welcome to my first Small Cap Report published exclusively on Stockopedia!
I'll start with a share in my personal portfolio, Amino Technologies (LON:AMO). They announce results for year-ended 30 November 2012. They look good, in the context of a market cap of £40.2m at 73p a share. Amino is based in Cambridge, and makes TV over IP set top boxes. Its largest markets are the USA, and the Netherlands.
Particularly noteworthy with Amino is the very strong balance sheet, which is stuffed full of cash. Indeed, net cash has risen from £14.1m to £17.1, which is 43% of the market cap, so highly significant in valuation terms, and providing a solid underpinning to the share price.
Whilst revenue fell 6% to £41.7m, a much stronger gross margin (up from 32.7% to 42%) means that EBITDA rose 42% to £6.2m. I'm not terribly keen on the use of EBITDA for companies which capitalise material amounts of development spending into intangible assets, as this gives an inflated picture of underlying performance. Globo is another example of that, so it's worth checking the figures. In the case of Amino, it capitalised £2.1m into intangible assets, and amortised £3.1m, so that EBITDA figure is halved once you take off amortisation, or drops by a third once you take off capitalised development spending in the year. EPS is a much safer valuation measure, since it is stated after amortisation expense.
Earnings per share (EPS) came in slightly ahead of market consensus, at 5.4p.
Their outlook statement sounds pretty upbeat, and a final dividend of 3p has been proposed, with the stated intention of raising the dividend by at least 15% in each of the two next years, giving 3.45p and 3.97p. That works out at a dividend yield of 5.4% on the latter figure, which certainly appeals.
Therefore it's a thumbs up from me to these results from Amino, and I shall continue holding my shares. I could see them going a lot higher if some decent top line growth is generated, whilst the downside is covered by the bullet-proof balance sheet - which is exactly the type of low risk situation I like best - a value share with good growth potential in for free.
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