I Read The News Today Oh Boy! 22-Nov-2017

Wednesday, Nov 22 2017 by

Morning All!

Another crazy one today!

Creightons ( Creightons (LON:CRL) ) – 39.5p – £22.9m – PER 20.1

Interim Results For The 6 Months To End September 2017 – Highlights are - Revenue up 7% to £16.7m (2016: £15.6m), PBT up by 21% to £956,000 (2016: £790,000) and Diluted EPS 1.09p (2016: 1.00p).

Up almost 3x in 2017 on some good results, now seems to be slowing. At this valuation, it’s not for me.

Cambria Automobiles ( Cambria Automobiles (LON:CAMB) ) – 62p – £62m – PER 7.52

Full Results For The Year To End August 2017 – “Solid results in Group's 11th year of trading, continued strategic progress”. Revenue is up 4.9% and PBT is up 6.6%. This growth seems to have come not from sales (which are down) but from “aftersales”.

I think this is of interest to those with a faith in the sector.

SCS ( SCS (LON:SCS) ) – 174.5p – £70.2m – PER 7.61

AGM Statement – Certainly doesn’t look like a meeting where you’re going to miss anything.

Even with an 8%+ Dividend I just can’t bring myself to be interested in a cyclical furniture and flooring company. Any downturn, that Dividend gets cut or even disappears, along with my investment!

Accsys Technologies ( Accsys Technologies (LON:AXS) ) – 81.75p – £88.5m – PER n/a

Interim Results For The 6 Months To End September 2017 – An in-line set of results.

Growing Revenues but the Profit is still lagging (or lacking, whichever you want). Seems to have enough Cash to see it through to profitability – But even the 2019 forecast (on Revenue of £74.1m) is forecast as just £2m. Still not for me.

Eckoh ( Eckoh (LON:ECK) ) – 51p – £127.9m – PER 27.6

Interim Results For The 6 Months To End September 2017 – An in-line set of results.

I just can’t see how this rated so highly, perhaps I am missing something.

Finsbury Food ( Finsbury Food (LON:FIF) ) – 103.5p – £134.9m –…

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Creightons plc is engaged in the development, marketing and manufacture of toiletries and fragrances. The Company operates through three business streams: private label business, contract manufacturing business and branded business. Its private label business focuses on private label products for high street retailers and supermarket chains. Its contract manufacturing business develops and manufactures products on behalf of third party brand owners. Its branded business develops, markets, sells and distributes products it has developed and owns the rights to. Its product portfolio includes bath and shower care, haircare, body care, baby and maternity, and fragrances, among others. Its services include market analysis, creative concept generation, product development, brand development, manufacturing and logistics. Its brands include Frizz No More, Volume Pro, Argan Body, Argan Smooth, Keratin Pro, Perfect Hair, Bronze Ambition, Sunshine Blonde, Beautiful Brunette and Just Hair. more »

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Cambria Automobiles plc is a motor dealer, which is engaged in the sale and servicing of motor vehicles. The Company is engaged in the provision of car vehicle sales, vehicle servicing and related services. It is a retailer of new and used cars, commercial vehicles and motorbikes. It operates on a dealership-by-dealership basis. It operates from approximately 30 sites with a total of over 50 dealer franchises. It operates dealerships across England, from the North West through the Midlands, down to Kent in the Southeast and across Exeter in the South West, trading under local brand names, such as Dees, Doves, Grange, Invicta, Motorparks and Pure Triumph. Its brand portfolio comprises Abarth, Alfa Romeo, Aston Martin, Dacia, Ford, Fiat, Honda, Jaguar, Jeep, Land Rover, Mazda, Nissan, Renault, Seat, Triumph, Vauxhall and Volvo. It also provides ancillary services. It offers finance and insurance for the execution of the transaction along with service plans to maintain the vehicle. more »

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ScS Group plc is engaged in the provision of upholstered furniture and flooring, trading under the brand name, ScS. The Company specializes in fabric and leather sofas, and sells a range of branded and ScS branded products sold under registered trademarks, including Endurance and SiSi Italia. The Company also offers a range of third-party brands, including La-Z-Boy, G Plan and Parker Knoll. The Company operates from approximately 100 stores nationwide along with an online sales and also has approximately 10 distribution centers across the United Kingdom. The Company has operations in retail park locations and in House of Fraser stores across the country-as far north as Aberdeen and as far south as Plymouth, offering a range of upholstered furniture and floorcoverings. The Company also runs a made-to-order sofas, furniture and flooring concession within House of Fraser. The concession operates from approximately 30 House of Fraser stores across the United Kingdom and online. more »

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7 Posts on this Thread show/hide all

MrContrarian 22nd Nov '17 1 of 7

My morning smallcap tweet:
Didn't find any warnings or beats.

dotDigital (LON:DOTD)

Dotdigital Group (DOTD) buys Comapi, a fast-growing business focused on the omni-channel messaging and cloud communication market, for £11m plus up to £1.2m in share options to the management team over 2 years. Comapi revenue £7.8m and EBITDA of £1.2m.

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underscored 22nd Nov '17 2 of 7

£SSP looks interesting.
"Underlying earnings per share of 20.3 pence: up 31.0%. Reported earnings per share of 19.5 pence, up 28.9%"

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andrea34l 22nd Nov '17 3 of 7

Great update - thanks! My own views on some of these companies:

Creightons (CRL) – agree, it's too high valued… and I can rarely get interested in any company where revenue growth is in single digits, it implies profit growth will only come from squeezing margins... which can't last forever.

Cambria Automobiles (CAMB) – I think these results are dull and quite poor… and the dreaded word ‘solid’ indicates that they themselves consider the results show low growth; I think the lack of trades so far shows a similar view. As I posted on the Small Cap Report page previously, I continue to believe MMH are way better value than most in this sector.

Eckoh (ECK) – totally agree, way over-valued. Revenue growth of 10%...?

QUIZ – I am relieved in these results after the steady fall in share price; I think they will be quite heavily H2 weighted, owing to the high proportion of glitzy/party fashionwear… so maybe there will be a boost at FY announcement time.

Gfinity (GFIN) – it’s been a “Transformational year…” in that they have increased losses from to £5.3m from £3.1m last time; well done them! I think I am being a little sarcastic here… perhaps they are just too speculative and jam tomorrow for me.

Van Elle (VANL) – the word “overall” as regards trading always worries me, it implies at lease one division is finding things tough... and could get worse. “Challenging” and “H2 weighting” are a worry too.

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matylda 22nd Nov '17 4 of 7

In reply to post #243953

Thank you so much for taking the time to add value - Much appreciated.

Blog: Briefed Up
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bluecurve 22nd Nov '17 5 of 7

Just some quick input on Eckoh (LON:ECK) (I hold) and software companies in general. I invest in quite a few, and there are a couple of accounting things look out for.

Firstly, poor quality software businesses tend to over-capitalise their software development costs. This results in profits being flattered, whilst Intangible Assets grow quickly. My experience is that those Intangibles tend to decline in value much quicker than they're depreciated, and this results in a nasty shock at some stage when the value has to be impaired. Eckoh (LON:ECK) hardly capitalises any software development cost, so it's prudent on this issue.

Secondly, the majority of B-to-B software is now sold as a service, with an annual fee. Fees tend to be smaller compared to the days when software was sold as a capital item with a big price tag. The downside is that revenues tend to grow at a slower rate. However, the fees tend to be more "sticky" as the costs of switching to a new supplier are generally quite high. Hence, when a software company signs a customer on an annual contract, the tend to stay a customer for many years, which smooths revenue and tends to make forecasting more predictable.

Eckoh (LON:ECK) changed it's revenue/sales policy from capital cost to annual fees just over a year ago. You'll see that big drop in price in Aug-16 as the market adjusted value. I bought at that point as I perceived the company's value to be the same, if not higher.

For these reasons I think Eckoh (LON:ECK) falls into the "sensible and predictable" category for a software business. Whether it should be on such a high P/E, I can't say.

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herbie47 22nd Nov '17 6 of 7

In reply to post #243913

Yes SSP (LON:SSPG) looks ok but not beating forecast, outlook is not so good. I should have bought these when they dipped down to 500p but I was travelling at the time, so I missed the opportunity, should have done an auto bid. The one concern is recession, less people will fly so could be badly affected. We don't have history to go on. Debt is a bit on the high side for me. But it's a company I quite like, captive market, I admit I rarely use airport restaurants and bars, prices are too high, but many people do, if travel does continue to increase it bodes well. Can't see that much upside in the share price so I will wait.

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Scoobydoit 22nd Nov '17 7 of 7

I also held a small position in GFIN but sold today.

Posted on Paul Scott's update

Large Cap for 2.6m Rev
Results to 30/6 it's now 22 Nov, that's quite a delay.
No real guidance on current trading, just "excellent foundations" and 3m / 3.6m views on Elite Series 1 and 2.
They're 5 months into the next financial year and haven't given a view on revenue
The state will create long term stakeholder value so I can only assume there will be some sort of short term pain.

I missed selling the spike but am comfortable in my view, IMO they're funded for 2018 but will no doubt need another fund raise later in the year. For an option look at GMD and there belong offering.

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