Small Cap Value Report (Wed 1 May 2019) - RHL, CTH, CGS, PSN, NXT, BLTG, CNCT

Good morning, it's Paul here!

My flu seems to have mostly cleared up overnight, so there's a fighting chance that I might actually be able to produce a proper report today. Apologies for my lamentable performance on Monday & Tuesday.

7-8am initial skim

Redhall (LON:RHL)

 Profit warning due to contract delays.

Full year (ending 30 Sep 2019) results likely to be "materially below" previous expectations.

Uncertainty over contracts, but makes positive noises on pipeline.

Doesn't interest me at all.

Caretech Holdings (LON:CTH)

Half year trading update - is in line with expectations.

Net debt has roughly doubled to £297.5m, following a major acquisition called Cambian.

Says that it expects to be able to pass on cost increases to its customers (local authorities).

The sector doesn't interest me (outsourced public services).

Castings (LON:CGS)

Trading update for year ended 31 Mar 2019.

Results expected to be ahead of market expectations.

Strong customer demand in H2, partly due to customer stockpiling (re Brexit, presumably).

Improved margins & productivity. Price increases passed on. Other management initiatives starting to bear fruit.

My view - the numbers look attractive here - a low PER of 11.5, decent & well-covered divi yield of 3.9%, and a strong balance sheet. Nice company.

Although a performance boost now from customer stockpiling is likely to unwind at some point in future.

Persimmon (LON:PSN)

This enormously cash generative housebuilder sounds happy with things;

Since the start of the year the new build housing market has proved resilient with high levels of employment and low interest rates continuing to support consumer confidence.

With mortgage lenders continuing to offer attractive products, the level of customer activity has been encouraging with visitor levels to site, sales conversion rates and cancellation rates all running in line with our expectations.

Overall, sales reservations remain in line with our expectations and we currently anticipate achieving a similar level of legal completions in the first half as last year.

Next (LON:NXT)

Good Q1 trading update, helped by nice weather in April.

Leaving full year forecasts unchanged for now.

Trend continues of online sales more than offsetting decline in retail sales. Good growth in interest income from credit sales.

My view - a longstanding favourite of mine. Next continues to successfully manage the transition from physical stores to online.

Blancco Technology (LON:BLTG)

I don't understand this update, but it seems to be positive;

Blancco expects revenues for FY2019 to be marginally ahead of current market expectations. The cost investment initiatives that Blancco has put in place since September 2018 are ongoing and are yet to be fully costed within the organisation and, accordingly, the Group expects adjusted operating profit for FY2019 to be comfortably ahead of the current market consensus.

Complete gibberish!

This company has been far too accident-prone in the past, for me to want to spend any time on it.

Connect (LON:CNCT)

Quite poor interims, with adjusted profit down 34% to £13m, on £732m revenues - so a tiny profit margin.

This is Smiths News & Tuffnells.

It used to pay out huge divis, but those have gone for a burton - only 1p per share divi is expected this year.

I wouldn't invest in any logistics/delivery type companies. It's a rubbish sector.

The balance sheet here is poor too, with negative NTAV.

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The above was all up by 08:16, so it's worth checking here early doors, to see if there's anything time-sensitive.