Small Cap Value Report (13 Feb 2017) - CALL, EGS, VCP, PLA

Monday, Feb 13 2017 by
55

Hi,

Paul has sent in comments on four companies, which I've pasted below.

Graham



Cloudcall (LON:CALL)

Share price: 84.5p (+10%)
No. shares: 20.1m
Market cap: £17m

Update on Bullhorn Strategic Partnership

(PS: at the time of writing, I hold a long position in this share)

Looks a bit of  a non-announcement. We already know that Cloudcall (LON:CALL) has a close relationship with Bullhorn. So announcing that it is expanding that to cover Bullhorn's US operations is no great surprise. Actually I thought this was already the case.

No financial details are given, and no comment is made about overall company performance versus market expectations. Therefore this announcement goes into my mental dustbin.




eg Solutions (LON:EGS)

Share price: 49p (+20%)
No. shares: 22.7m
Market cap: £11m

Trading update 

This reads positively, with a strong H2 performance now in the bag (for year ended 31 Jan 2017);

Trading in the second half of the financial year has been strong, generating record revenues for the six months of not less than £5.69m (H1: £2.50m) and yielding adjusted EBITDA of over £2.0m (H1: loss of £0.89m). Cash at the end of the period was at least £2.40m

Accordingly, the Board anticipates that the Company's financial results for the full year will be in line with market expectations on revenues of not less than £8.19m and an adjusted EBITDA of over £1.20m. 

Mind you, it's only in line with expectations, so therefore in theory should be neutral for the share price.

A few comments from me;

1) EBITDA means nothing for software companies, as it excludes the costs of capitalised development spending. So I would want to see what the proper profits are.

2) This company tends to operate with large lumpy contract wins (licences). So performance has tended to yo-yo between good & bad half years. Therefore I wouldn't get too excited about one strong half year. There's no way of knowing if this stronger performance is likely to continue, or not.

3) The controversial CEO has been the big winner financially from this company in the past,…

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Disclaimer:  

All my own views. I am not regulated by the FSA. No advice.

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Cloudcall Group plc, formerly Synety Group plc, is a United Kingdom-based holding company. The Company and its subsidiaries are engaged in the provision of cloud-based integrated telephony solutions. Synety is engaged in software and unified communications business. The Company provides a suite of cloud-based software and telephony products and services under the name CloudCall. The CloudCall suite of products allows companies to integrate their telephony systems into their existing customer relationship management (CRM) software, enabling calls to be made, recorded, logged and categorized from within the activity reports being generated. The Company offers financial, sale, recruitment and customer services. The Company's subsidiaries include Synety Ltd. and Synety, Inc. more »

LSE Price
96.5p
Change
 
Mkt Cap (£m)
19.4
P/E (fwd)
n/a
Yield (fwd)
n/a

eg solutions plc is a back office workforce optimization software company. The Company's software is used in various industry sectors, including financial services, healthcare and utilities. Its principal activity is that of information technology (IT) and software support services business providing improvements in operational management. It uses software packages and an operations management methodology based on production management techniques. It delivers measurable operational improvements in back office environments. The Company provides IT and software support services by operating two companies in the United Kingdom (EGUK) and in South Africa (EGSA). The Company, through its subsidiaries, is engaged in the consultancy and software business. The eg principles of operational management training is designed to coach and support operational and team managers to understand workloads and to balance demand with available resources. more »

LSE Price
62.5p
Change
 
Mkt Cap (£m)
14.2
P/E (fwd)
16.0
Yield (fwd)
n/a

Victoria PLC is a designer, manufacturer and distributor of flooring products. The Company's principal activities are the manufacture, distribution and sale of floorcoverings. Its segments include UK and Australia. It manufactures wool and synthetic broadloom carpets, carpet tiles, underlay and flooring accessories. In addition, it markets and distributes a range of luxury vinyl tile (LVT) and hardwood flooring products produced by third-party manufacturers. Its product offering in the United Kingdom ranges from both crafted, woven Wilton carpets to Tufted carpets in a myriad of fashion colors and styles. Its stock range offerings cover saxonies, tonals, velvets, twists and natural loop pile styles for residential use. The Company supplies its products to the mid to high end residential market and contract sector both in the United Kingdom and overseas. Its subsidiary, Munster Carpets Limited, is engaged in the manufacture and distribution of floorcoverings for the contract market. more »

LSE Price
438.5p
Change
4.7%
Mkt Cap (£m)
380.9
P/E (fwd)
14.2
Yield (fwd)
n/a



  Is Cloudcall fundamentally strong or weak? Find out More »


11 Comments on this Article show/hide all

Gostevie 13th Feb 1 of 11
3

For anybody interested in finding out more about Plastics Capital (LON:PLA), they are presenting at the next ShareSoc company seminar in London:

http://www.sharesoc.org/london-mar.html

In my opinion these events are well worth attending if you are in or around London.

Steve

| Link | Share | 2 replies
Paul Scott 13th Feb 2 of 11
3

In reply to Gostevie, post #1

Steve,

In terms of investor events, Plastics Capital (LON:PLA) would turn up for the opening of an envelope! A bit like Avation (LON:AVAP) ! Mind you, that doesn't necessarily make them bad companies at all. It just amuses me that they're always at these events, and there must be a law of diminishing returns - I would say that 1 or max 2 appearances is enough. Above that, and I wonder why they're so keen to drum up PI buyers? Maybe an Insti seeking liquidity to exit?

Regards, Paul.

| Link | Share
Andy Stafford 13th Feb 3 of 11
25

In reply to Gostevie, post #1

On a lighter note, would you invest in a company that is unsure of how many factories it has.

The Plastics Capital (LON:PLA) bio reads "It has over five factories in the United Kingdom, approximately two in China and over one in Thailand"

| Link | Share | 1 reply
rmillaree 13th Feb 4 of 11
3

Ref PLA

I remember buying shares in PLA simply due to poor memory, they came out with some decent numbers and i bought on a whim , i thought i had previously mentally okayed the business fundamentals only to realise that i was confusing them with Trifast. Nice little lesson learnt as i would have been better buying shares in Trifast. Some you win some you lose i guess - i did once win a nice golf bet betting on the wrong P Sheehan so i count that as being 1-1 on the stupidity stakes. I thought the better known one was obscure enough never mind the lesser known dude i actually bet on - at least i wasn't silly enough to bet of the third P Sheehan pro although she may have beaten the other two on a good day i suspect?

| Link | Share | 2 replies
Julianh 13th Feb 5 of 11
1

In reply to Andy Stafford, post #3

Love the quote from Plastics Capital. "It has over five factories..." Let's look out for the next final results announcement "and we've made a profit of roughly quite a lot, or maybe not so much. How should we know?" Or maybe the can follow in the footsteps of an infamous Chinese AIM stock and lose their accounting records in a van parked in a motorway car park.

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Housemartin2 13th Feb 6 of 11

Re Cloudcal's RNS, I had the same reaction as Paul - I thought this was already the case and was non-news. Mind you, Mr Market did not seem to know !

(I used to work for consultancy business and one of the tricks was to refer to the same contract win in different forums with slightly different details, thereby creating the impression that your business area was doing better than it actually was. Obviously not applicable here)

Long CALL

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purpleski 13th Feb 7 of 11

In reply to rmillaree, post #4

This reminded me of the CNBC report late last week about the pop in the share price of £STVI, which is up around 120% since the possible IPO announcement of Snapchat. See the Stockopedia page for a graph of the share price.

http://www.stockopedia.com/share-prices/snap-interactive-inc-OTC:STVI/

| Link | Share | 1 reply
JohnEustace 13th Feb 8 of 11
3

In reply to rmillaree, post #4

My turn to confess to my only fat finger error so far having bought ROLL when I meant to buy ROL on the US market.
Having sworn a bit and worked out what I had done the ROLL chart looked OK so I kept it and bought ROL the next day. Both are in profit and I'm somewhat relieved that the one I meant to buy is the one doing better.

| Link | Share
rmillaree 13th Feb 9 of 11

In reply to purpleski, post #7

Ref STVI

Dang i was keeping an eye out for opportunities like that after the 500% + rise in Tweeters shareprice at the time Twitter was floating. 120% seems pretty pretty pedestrian but profitable enough to be worth a punt. Advance warning needed next time.

http://blogs.marketwatch.com/thetell/2013/10/04/twtrq-stock-up-as-much-as-1800-as-investors-confuse-tweeter-for-twitter/

| Link | Share | 1 reply
purpleski 13th Feb 10 of 11

In reply to rmillaree, post #9

How about $UBA

http://www.stockopedia.com/share-prices/urstadt-biddle-properties-inc-NYQ:UBA/

Or $UBAB (those this has 10 bagged since March lows of the financial crisis

http://www.stockopedia.com/share-prices/united-bancorporation-of-alabama-inc-OTC:UBAB/

Worth a punt?!:-)

| Link | Share
jonesjeff 13th Feb 11 of 11
1

Approximately 2 factories in China.
Over 1 in Thailand.

Amusing, but hardly likely to help us gain confidence in the management.

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About Graham N

Graham N

Full-time investor and independent analyst. Prior to this, I spent seven years in the financial markets as an analyst and institutional fund manager. I'm CFA-qualified and hold an audited, FTSE-beating investment track record.  Outside of finance, my main interests are recreational poker and everything to do with China. I can both speak and write intermediate-level Mandarin Chinese. more »

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