Good morning!

It certainly feels a lot more calm today than it did this time yesterday, when we were seeing something of a mini panic sell-off. Encouragingly, a lot of the small caps I follow started to bounce mid to late morning yesterday, and recovered a lot of their losses by the end of the day. I'm seeing tentative buying this morning in some small caps too.

The general view seems to be that Greece is a nuisance, but widely expected, and something of a storm in a teacup as regards how we should value UK small caps. I think the EU will do whatever they have to do, to protect the Euro, and the banking system, and if that means cutting Greece adrift, then so be it.

On a human level, of course I feel sorry for ordinary Greek people. But this is what happens if you keep over-spending - eventually you run out of other peoples' money. There is no easy solution to what is going on there. I remain of the view that the most likely outcome is a compromise. It's inconceivable to my mind that the Greeks will voluntarily go for economic collapse, even if it would probably be in their best interests long term.


Plastics Capital (LON:PLA)

Share price: 97p (down 4%)
No. shares: 35.3m
Market Cap: £34.2m

Final results y/e 31 Mar 2015 - adjusted profit before tax has come in at £3,673k, which is 2.4% up on last year, and looks to be in line with broker expectations. Although adjusted EPS of 10.8p looks below broker expectations of 11.7p, so at this point I'm not entirely sure if they have undershot, or not. Although the shares being 4% down suggests that the market is slightly underwhelmed by the numbers.

The trouble is, turnover is up 21.9%, driven by acquisitions, but profits are only really flat. So that implies the existing business has gone backwards in profitability.

PLA is also prone to making lots of adjustments to their figures, which leaves me feeling a tad uneasy - e.g. how exceptional are exceptionals, if they happen every year? This year £1.1m of costs are classified as exceptional. Last year it was £1.3m.

There is then a second layer of adjustments, for amortisation of intangibles, and deal fees, then a third layer of adjustments…

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