I Read The News Today Oh Boy! 22-Nov-2018

22nd Nov '18 by matylda

6 comments 2724 reads

Morning all!

CMC Markets ( CMC Markets (LON:CMCX) ) – 118.6p – £342.8m – PER 9.97

Results For The 6 Months To End September 2018 – Income down -21%, PBT down -76% and EPS down -69% on an increase in trades (14%) and a reduction in active clients of 4% - Even Revenue per active client is down -22%.

Still too much uncertainty here and the fall in Revenue per active client is not encouraging at all – I’m still Neutral.

Hornby ( Hornby (LON:HRN) ) – 32.5p – £40.7m – PER n/a

Results For The 6 Months To End September 2018 – Revenue down from £17m to £13.8m, Statutory Loss Before Tax of -£3.2m (-£5.7m last time), Net Debt is £1.8m (£4.7m last time). Frugality and bonuses are the name of the game here now “a one-off 5% bonus (to all employees) given for getting to break even and c.15% of operating profit shared between (all) employees thereafter.”

I still don’t feel any more comfort here - I remain Neutral.

Keller Group ( Keller (LON:KLR) ) – 622p – £448.2m – PER 6.26

Trading Update – H2 continues in-line with the Board’s expectations – Re-iterates in 2019 contribution from major projects will be lower than this year.

First coverage for me and I have to say I am not exactly inspired – I will go Neutral and keep an eye out for actual results and perhaps some revised forecasts.

Mothercare ( Mothercare (LON:MTC) ) – 17.56p – £60m – PER n/a

Results For The 28 Week Period To 6^th October 2018 – Loos Before Tax of -£6.2m (-£2.6m last time), Net Debt due to an equity raise down from £44.1m to £21.5m. International showing signs of recovery, UK still slowing.

Remains on my Avoid list.

Redcentric ( Redcentric (LON:RCN) ) – 77.5p – £115.6m – PER 13.1

Results For The 6 Months To End September 2018 – Revenue down -7.6%, Loss of -£0.1m (break-even last time). A 0.4p Interim Dividend has been reinstated.

I am Neutral and cannot…

Unlock with Email

Unlock with Google

Already have an account?
Login here

MrContrarian

22nd Nov '18

My morning smallcap tweet: Bad news from 5 smallcaps.

Fireangel Safety Technology (LON:FA.), Integumen (LON:SKIN), Juridica Investments (LON:JIL), PCI- PAL (LON:PCIP), Hornby (LON:HRN), Veltyco (LON:VLTY), Mothercare (LON:MTC), Ebiquity (LON:EBQ), Wynnstay (LON:WYN), Redcentric (LON:RCN)

FireAngel Safety Technology (FA.) FY trading. Another warning. Ongoing production mproblems has delayed supplies and added short-term costs. Also "core product sales within the Company's UK retail and German trade segments have only recently, during Q4 2018, recovered to acceptable levels." Brave face. Uninvestable.
Integumen (SKIN) Subscription and Placing to raise £355k at 0.44p, a 14% discount.
Juridica (JIL) proosed delisting to save money during fund wind-up. I hold.
PCI-PAL (PCIP) agrees to pay sacked CEO his contracted entitlements plus £100,100 in full and final settlement of all other claims.
Hornby (HRN) poor H1, current sales are behind budget. squeezing costs. H1 rev down 18%, U/L pretax -£3m (-£4.6m). "There is still a large amount of stock at retailers that was sold at aggressively discounted prices. Some of the large blocks of stock of "bread-and-butter" items that were sold represented more than a year's supply for our entire market." Brave face: "There are some incredible [really?] products in the pipeline that will finally get us back on the front foot and give us the ability to take back the market share that we have given away."
Veltyco Group (VLTY) continues to struggle with cash collection in the online financial trading marketing vertical, has reduced marketing activities in this vertical to zero. May write down receivables. Cash only €0.6m. "If the Company is unable to increase its overall cash position, its ability to provide the level of marketing spend to support the launch of its own regulated online financial trading brand...in December."
Mothercare (MTC) H1 adj pretax -£6.2m (-£2.6m). "UK like-for-like sales decline of 11.1%, reflecting wider market uncertainty and negative brand coverage in connection with the Group's refinancing." There's been no trading stmt for 4 months! Expects performance to remain volatile.
Ebiquity (EBQ) guides FY operating profit materially below current market expectations.
Wynnstay Group (WYN) guides FY profit head of market forecasts.
Redcentric (RCN) H1 rev down 8%. Reinstates div 0.4p. "Our contract win rates have been lower than expected and the quality of the new business pipeline has reduced. While our new sales director, Brendan Lynch, has made good initial progress in implementing the required changes, it is taking time to rebuild a high-quality sales function." Also "Health & Social Care Network contracts...not expected to deliver the anticipated revenues in the timeframe previously expected." What a load of waffle to say sales are slow.

andrea34

The results from CMC Markets (LON:CMCX) don't look good at all, especially in light of the very recent "ahead of expectations" update from Plus500 (LON:PLUS) this week.

I have finally bought Wynnstay (LON:WYN) after today's trading update - thanks for mentioning, I'm way behind today. I have been watching for some time ever since they were added to the 2018 NAPS portfolio as I was just a bit cautious that the recovery was at an early stage after previous debacles and might be short-lived, but things seem to be firing on all cylinders. They also don't seem to be subject to such price fluctuations as the rest of the market, so they steadily go up, or down, rather than wild swings.

Oh, I also have a HUGE smile on my face after both of your updates on Veltyco (LON:VLTY) - in June I sold at a loss at 64p... and now they are at 5.75p mid price!!!! Just proves that stop losses do work!! As well as common sense...

simoan

I think you need to be careful. I have a friend who works in the agriculture industry who predicted there would be shortages caused by the hot dry UK summer. So this boost to Wynnstay trading could just be a one-off?

Personally, I just could never get interested in investing in a company with margins of 2-3%. It clearly has no pricing power and revenues go up and down with the weather. There are so many companies and sectors with better fundamentals to invest in, why bother?

All the best, Si

matylda

Thanks guys for the comment much appreciated - Wynnstay (LON:WYN) is tempting but I am being VERY selective at present.

RichardK

Re Majestic Wine (LON:WINE) (Majestic). If, as you imply, Matylda, they are discounting to get sales up to £500 mn and maybe bonuses, then it could be a buying opportunity - for wine, not shares!

Richard

I am tempted to agree that the wine may be better value than the shares - Although I believe they are hinting that the additional spend (profits) are being spent on customer acquisition (not sure if that's on-line advertising, or someone standing with poles and placards with an arrow on it).

I Read The News Today Oh Boy! 22-Nov-2018

Unlock the rest of this article with a 14 day trial

About the Author

Matylda

6 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...