Small Cap Value Report (4 Apr 2014) - FLYB, KMK, DGB, TND

Friday, Apr 04 2014 by
21

Good morning! Firstly a couple of reminders for dates. It's the UK Investor Show tomorrow, at the Queen Elizabeth Centre, just off Parliament Square. I'm looking forward to it, but also dreading it, as I've been roped into speaking not once, but twice! Firstly on the Stockoedia stand, to talk about small caps, from 1-2pm, then as part of a panel on shareholder activism at 3:45pm. Ed, Dave and the team will be on the Stockopedia stand, and there will be other interesting seminars & demos on the stand throughout the day. So I look forward to seeing many friends there on the day.

Secondly, my own event in Brighton is almost fully booked now. It's a newly created Brighton branch of ShareSoc (the UK individual shareholders society), and we're holding our first evening event on Tue next week (8 April). Everyone attending must be booked in, as places are limited. We have a fantastic speaker, John McArthur of Tracsis, who will speak for about an hour about Tracsis itself, but also his experiences of being an AIM company CEO, then Q&A. Also we have Roger Lawson of ShareSoc who will precede that with a brief intro about ShareSoc. Then we will spend the rest of the evening having a slap-up meal & plenty of drinks! To book your place, please click here. All are welcome.

 

 

 

 

Flybe (LON:FLYB)

Regional airline, Flybe, announces its Q4 trading update for the year ended 31 Mar 2014. The key sentence says;

 

The Group performed in line with management expectations through the final quarter of the year ended 31 March 2014.

 

There is then more detail on the turnaround strategy, etc. I don't normally go near any aviation shares, as it's such a historically difficult sector for investors. However in this case I was tempted in by new management's turnaround plan, and their credibility (ex-Easyjet). What clinched it was the huge fundraising recently, which has transformed their Balance Sheet, with about £150m being raised in a Placing & Open Offer at 110p. So it now has a very strong Bal Sheet, and the management & strategy to become a lot more profitable. Time will tell, but it ticks the right boxes for me.

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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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Flybe Group plc (Flybe) operates regional airline in Europe. The Company operates in two segments: Flybe UK, which comprises the Company's main scheduled United Kingdom domestic and the United Kingdom-Europe passenger operations and revenue ancillary to the provision of those services, and Flybe Aviation Services (FAS), which focuses on providing aviation services to customers, largely in Western Europe. The FAS supports Flybe's United Kingdom activities, as well as serving third-party customers. Its One Stop to the World program provides access to long-haul destinations for its customers, through its international codesharing partners at main hubs within Flybe's network. The Company has over 50 new routes focused on connecting its regional bases to regional centers in Europe, such as Rotterdam, Dusseldorf, Amsterdam, Paris and Milan, as well as some domestic route infilling, such as Edinburgh-Liverpool and Exeter-Glasgow. more »

LSE Price
40.13p
Change
-0.9%
Mkt Cap (£m)
86.9
P/E (fwd)
16.9
Yield (fwd)
n/a

Kromek Group plc is a radiation detection technology company. The Company develops radiation detectors based on cadmium zinc telluride. The Company's segments are UK Operations and US Operations. The Company designs, develops and produces x-ray and gamma ray imaging and radiation detection products for the medical, security screening and nuclear markets. The Company's solutions provide information on material composition and structure to enable the identification of cancerous tissues and hazardous materials (including explosives), and the analysis of radioactive materials. Its nuclear products include CPG, GR1-Gamma Ray Spectrometer, GR1A, SIGMA, TN15, RayMon10, Quant Air and RENA-Mini Development Platform. It offers detectors and subcomponents for original equipment manufacturer (OEM) customers in the medical imaging market, including computed tomography (CT), single photon emission computed tomography (SPECT), positron emission tomography (PET) and bone mineral densitometry. more »

LSE Price
30.13p
Change
7.6%
Mkt Cap (£m)
78.0
P/E (fwd)
n/a
Yield (fwd)
n/a

Digital Barriers plc is a provider of visually intelligent solutions to the global surveillance, security and safety markets. The Company operates through Solutions segment, which is focused on the surveillance market. This covers image and data capture (standoff passive body scanning and unattended ground sensors), a range of processing and enhancement techniques (thermal image processing, image stabilization and enhancing low light performance), image transmission (both wired and wireless technologies) and a range of analytics algorithms. It specializes in streaming and analysis of secure video and related intelligence over wireless networks. Its solutions include EdgeVis Live, EdgeVis Shield, ThruVis, SmartVis and CloudVis. It provides video content analysis and body scanning to identify threats to life. Its solutions are developed for specialist areas of security and defense, as well as for the protection of locations, such as airports, military bases and natural resources. more »

LSE Price
29.38p
Change
-4.5%
Mkt Cap (£m)
48.5
P/E (fwd)
n/a
Yield (fwd)
n/a



  Is Flybe fundamentally strong or weak? Find out More »


13 Comments on this Article show/hide all

Just 4th Apr '14 1 of 13
2

Morning Paul, I just wandered if you would have time this morning to express your thoughts on NGR now after the acquisition announcement?

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billytk 4th Apr '14 2 of 13

Morning Paul. Do the Flybe (LON:FLYB) EPS estimates you quote for this year take the recent dilution into account? Thanks

| Link | Share | 1 reply
Paul Scott 4th Apr '14 3 of 13

In reply to billytk, post #2

Hi billytk,

Ooh that's a good point, I don't know.
Will have to see if I can track down a broker note on Flybe (LON:FLYB).

Regards, Paul.

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grumpy5 4th Apr '14 4 of 13

Good luck tomorrow. Sorry I can't make it to hear your pearls!
The KMK CEO needs a strong NED on his board to kick him up the a***e, and educate him City comms.

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Jardine 4th Apr '14 5 of 13
2

In reply to Just, post #1

Just, the RNS from NATURE (LON:NGR) yesterday was probably missed by most people. I don't think investors have put all the pieces of the jigsaw together on NATURE (LON:NGR) yet and issuing an RNS at an unusual time doesn't help. They are aiming to establish waste reception facilities at major ports so large shipping operators can deal with just one supplier. Cleverly they are partnering up with local operators in each port. They have operations in Rotterdam and Gibraltar. Last year they announced an operation would start in Oman at the end of this year and now they have one in Texas to cover the Gulf of Mexico. I don't think they have actually acquired anything in Texas but agreed to invest about £1m and they will have a 65% share of the business. Bear in mind they have £4m in cash so this was earning them nothing before and is now being put to use. Also, there is a meeting next week in Gibraltar that will hopefully lead to them being given planning permission to replace the tanks that were destroyed in 2011. That will lead to a significant reduction in costs. At the moment the transport all the waste from ships in Gibraltar to Lisbon for treatment. To top all this the share price is now at the lowest level it has been for a number of years.

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cig 4th Apr '14 6 of 13
1

In reply to grumpy5, post #4

Please no, it's perfect as they are. I don't want to have to buy stuff full price! I'd rather have good companies with poor comms than poor companies with great comms.

(Disclosure: bought KMK at 38p)

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Just 4th Apr '14 7 of 13
1

Jardine, thank you for such an informative reply, really appreciate it. I couldn’t work out the drop yesterday and wandered if there was something I was missing!

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Jardine 4th Apr '14 8 of 13
1

Just, the recent share price fall in NATURE (LON:NGR) started on Tuesday when there was a sale of about 480,000 shares. Since then there have been a number of other largish sales. I suspect an institution has decided to clear their holding at the start of the new quarter/financial year. These shares have not been a great investment in recent years and they may have got tired waiting. My view is they are probably leaving just as the party is about to begin. Great opportunity to buy some shares on the cheap though. ; )

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William Partridge 4th Apr '14 9 of 13

Paul - I agree Kromek is impossibly hard to value. If you assume 2015 rev on the new numbers are correct @12m then say they growth at 50% that gives you 16m of 2016 revenues. Today's contract is £100m over say 10 years not 7 years (keeping the maths simple - i.e either way the end result I have assumed it is less than the best case to reflect the "upto" then that is Memorial Production Partners LP (FRA:10M) per annum or 10m of the 16m revenues from 1 contract. I think it is super interesting. NET NET has to be chance they do £25m of rev in 2016 so ev /sales 2*....rather it than BooHoo!

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Just 5th Apr '14 10 of 13
1

In reply to Jardine, post #8

Thanks again Jardine, you're a star! Pushing my luck now but do you happen to know anything or have any concerns about the pending court case with NATURE (LON:NGR) ?

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Jardine 6th Apr '14 11 of 13
1

In reply to Just, post #10

Just, I've not been able to find any useful information about the impending court case but this is obviously a potential cloud on the horizon. Strange it is now 3 years since the incident happened and a trial date doesn't appear to have been set yet. Maybe the lawyers are dragging their heels to generate more fees, or perhaps those involved have kicked it in to the long grass?

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kevanp 7th Apr '14 12 of 13
1

In reply to William Partridge, post #9

Memorial Production Partners LP (FRA:10M) must get a huge amount of free publicity because their ticker is 10M!

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Just 8th Apr '14 13 of 13
1

In reply to Jardine, post #11

Jardine, I did come across the link below which you may have already seen. It all sounds quite messy though and talks of a date of Feb 2014 for the case to be heard so maybe this has now been kicked into the long grass!
http://www.chronicle.gi/headlines_details.php?id=30036

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

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