I Read The News Today Oh Boy! 13-Dec-2017

13th Dec '17 by matylda

9 comments 7112 reads

Morning All!

OPG Power Ventures ( OPG Power Ventures (LON:OPG) ) – p – £m – PER

Unaudited Results For The 6 Months To End September 2017 – Revenue is down from £117.7m to £113.9m and a £17.9m PBT is a loss of £2.9m this time.

Glad I stuck to my rules and got out of this when I did – I was pretty much in love with this share at one time!

Cohort ( Cohort (LON:CHRT) ) – p – £m – PER

Final Results For The 6 Months To End October 2017 – I picked this statement out “The Group's first half results were slightly down on last year. In recent years the Group's results have been heavily weighted towards the second half and we expect this pattern to be repeated this year”.

Looks OK but at the end of the day it’s a low margin consultancy business. I am just not willing, at present, to accept the associated potential surprises here.

Safestyle UK ( Safestyle UK (LON:SFE) ) – 191.25p – £158.7m – PER 11.4

Trading Update – This doesn’t look good – “Demand has weakened further, and in the 3 months to 30 November 2017 (LFL) the Group's sales have been 0.3% lower by value, and 6.8% lower by volume”. Underlying PBT is expected to be below current market expectations, at a level of least £15m. And they “expect market conditions to continue to be very challenging in 2018”.

I will be avoiding this one for now.

Idox ( Idox (LON:IDOX) ) – 56.13p – £229.2m – PER 11.1

Year End Update - The Company has identified a small number of revenue items that it does not consider should be recognised in the FY2017 results – Expects EBITDA for FY2017 to be circa £20m (compared to about £23m stated in November, and £21.5m in 2016).

A bit of a yo-yo share at the moment and something I will not be getting involved in for now.

Eurocell ( Eurocell (LON:ECEL) ) – 215p – £215m – PER 9.63

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MrContrarian

13th Dec '17

My morning smallcap tweet:

Avanti Communications (LON:AVN), Strat Aero (LON:AERO), React (LON:REAT), Parity (LON:PTY), Plant Impact (LON:PIM), Cambian (LON:CMBN), Safestyle UK (LON:SFE), Chapel Down (OFEX:CDGP)

Avanti Communications (AVN) Another debt restructuring. Proposes 13x dilution to reduce debt.
Strat Aero (AERO) Open offer at 0.035p to raise up to £510k. A 30% discount. No thanks.
React Group (REAT) guides FY pre-tax loss £0.475m (£0.4m previously expected), primarily due to a non-cash adjustment relating to an amortisation. Trading in the current FY has made an encouraging start.
Parity Group (PTY) exp FY operating profit on continuing operations expected to be slightly ahead of its original expectations. Guides U/L Operating Profit at least 10%.
Plant Impact (PIM) disaster. Bayer CropScience will not be able to conclude a new contractual arrangement until Q1 2018 at the earliest. It also "confirmed to the Group that, given its well-publicised challenges within the Brazilian market, it will not be able to meet its commitments within the Purchasing Plan, as it needs to further accelerate its destocking activities. PIM guides FY18 rev £6m. "In the absence of prior external capital investment, on its current cost run rate of £750-800k per month, the Company will require funding prior to April 2018. Given the reduction in cashflow from the lower revenue expectation for FY18 and to provide a reasonable buffer in FY19, the Group's funding requirement is likely to be around £7m." Company up for sale and is in talks with with certain parties. Formal sale process with the aim of announcing the outcome very early in 2018.
Cambian (CMBN) TV programme tonight will expose alleged "inadequate levels of both the care and education for children at Cambian facilities and of the training and support offered to our staff. "Following receipt of the Letter [on 10 Nov], Cambian fulfilled its obligation to inform its regulator, Ofsted, of its contents and launched an internal investigation into the issues raised...Cambian is reviewing its service provision, utilising its internal quality assurance function and relevant independent external advisors. The Board is committed to addressing any issues that are identified. The Board believes these events will have no material financial impact on the Group in 2017 and remains confident that these issues will be satisfactorily resolved." At least they have not denied the issues.
Safestyle UK (SFE) warns again. Poor Q4 sales, weather disruption and increased cost of sales acquisition "due to higher lead generation expense in a competitive landscape and a higher proportion being made on extended finance terms." Guides underlying pretax below current market expectations, at a level of least £15m.
Chapel Down Group (CDGP) placing & open offer at 50p at a nasty 37% discount. Trading - FY rev in line at £11.6m.

matylda

OPG Power Ventures (LON:OPG) - https://www.brokerforecasts.com/companies/OPG

This would be funny if it wasn't so sad!

How can a broker be out 5x/6x price - Even double I find hard to accept but 5x/6x!

All thoughts welcome.

HumourMe

You previously mentioned you were 20% down and not understanding why as reasons for selling. Were there any other rules associated with the sell? For me understanding selling is the biggest challenge (although it is connected to why one bought in the first place).

Yes OPG Power Ventures (LON:OPG) - From memory I bought at 60p and got out around 49.5p (about 20%).

I typically have a 20% cut off, max 25% - And it's usually a technical stop of kind, some 5% or so below a most recent obvious low.

This rule keeps me disciplined and tells me the majority obviously know more than I think I do (which is not a surprise as I cannot ever claim to be the most intelligent or thorough investor).

Orangetree

Brokers conflict of interest, of course.

Crunch some numbers and found the following:

1). OPG is serving their debtholders by paying interest that exceeds 10% of total borrowing.
2). Interest is costing 17% of total sales.
3). Net cash flow excludes cash interest paid. Include that then last year cash flow is £17m, instead of £56m.
4). Then, you have the company adding 238MW in solar capacity by 2020. It would cost a lot of money to set up.

At the end of the day, I see this company going sub 10 pence because they need to restructure their debt by swapping it for equity.

Rusty2

OPG Power Ventures (LON:OPG) sounds just like Greenko apart it has less debt. I did warn someone about OPG Power Ventures (LON:OPG) last year not sure if it was you or not.

14th Dec '17

OPG Power Ventures (LON:OPG) - Thanks all for the input, typical of the stuff I can miss due to my limited deeper financial analysis abilities - Thankfully the 20% - 25% max risk on any investment "saved me".

And, yes I know this is not always the case on a gap down on bad news, etc.

On the other hand, I typically sell half when I am up 100% thus having free "market" money in the game. If there's a gap up, sometimes I take a little more.

Swings and roundabouts.

Hoping the lack of deeper analysis skills continues to be compensated by the discipline.

Thanks again all!

mercury61

24th Sep '18

OPG Power Ventures (LON:OPG) down over 28% today on dismal final results, I wonder if 'final' means just that!?

A great example of "Never fall in love with a share" - Used to love XLMedia (LON:XLM) too but 20% - 25% max from ATH rule saved here in both cases - One for a smallish loss, one for a reasonable profit - Hey Ho - My view is no matter what you think, the market usually knows more.

I Read The News Today Oh Boy! 13-Dec-2017

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Matylda

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