I Read The News Today Oh Boy! 25-Sep-2017

25th Sep '17 by matylda

12 comments 6091 reads

Morning All!

25-Sep-2017 – Mkt Cap £67.1m – 132.3p

Interim Results For The 6 Months Ended June 2017 – In-line and a maiden Dividend declared.

Analysis & View – This is just too confusing for me and it’s on my AVOID (because I am not clever enough to understand it) list. Well, all I really see is a terrible ROCE and HUGE amounts of Net Debt – Enough to put me off and go look for a company with better figures, and ones I can better understand.

Elecosoft (ELCO)

25-Sep-2017 – Mkt Cap £33.4m – 43.25p

Interim Results For The 6 Months Ended June 2017 – PBT up 68% on Revenue increases of just 8%. The 33% Dividend increase is also encouraging…

Analysis & View – Forecasts look good here although I am a little confused on the small increase in Revenue and HUGE increase in PBT (I couldn’t find an understandable (to me) explanation). I just don’t know how to call this one so I am NEUTRAL. It’s on my research later list - Meaning I will see if I can find comment by those with more accounting skills than me (and that’s a big list!).

MJ Gleeson (GLE)

25-Sep-2017 – Mkt Cap £335m – 619p

Interim Results For The 6 Months Ended June 2017 – Everything up, and nicely up. Highlights include Revenues up 13%, PBT up 17%, EPS up 14%, Cash up 47% (£34.1m (10% of Mkt Cap)) and the total Dividend (for the year) up a whopping 66% to 24p. The outlook too is confident.

Analysis & View – Recovered well this decade, up 5 fold from the bottom of the crash. Rising Revenues look great (CAGR is 28%) and Profits (and EPS) are mostly in line. The ROCE is good for the sector, the decent (increasing) Dividend (3% or so) is well covered and there’s plenty of cash too. Quite like this company but not the sector, however on a PER of 12 it’s perhaps time to take a small holding in the sector. NEUTRAL for now but will keep an eye on this one for a potential nibble in the sector.

Sprue Aegis (SPRP)

25-Sep-2017 – Mkt Cap £96.3m – 210p…

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MrContrarian

25th Sep '17

My morning smallcap tweet:

SRT Marine Systems (LON:SRT), Zoo Digital (LON:ZOO), Lighthouse (LON:LGT), Ceres Power Holdings (LON:CWR), Sprue Aegis (LON:SPRP)

SRT Marine Systems (SRT) will build and launch its own maritime monitoring satellite constellation. WHAT? The OCEAN-SCAN system will initially comprise six low earth orbiting (LEO) satellites, fully operational in 2019. "This is a natural and major strategic initiative for SRT [really?] that will deliver significant benefits for authorities seeking to secure and manage their maritime domain, as well as a new and recurring revenue stream for SRT through the sale of data to our system project customers. OCEAN-SCAN is fully funded via forecasted trading cash flow [!] and further supported by our new working capital facility." Can you buy satellites on PCP now? £10m secured loan note facility at 9.5% PA.
Zoo Digital Group (ZOO) AGM stmt. Exp H1 rev $12m. 'As the pipeline remains strong, the Board expects revenue for the full financial year to be well ahead of the Board's previous expectations.' but lower margins & investment mean EBITDA and profitability expectations unchanged.
Lighthouse Group (LGT) renews contract with Boundless, by CSMA (civil service members' assoc).
Ceres Power Holdings (CWR) successful SteelCellT year long field trial as part of an EU-wide field trial of Fuel Cell technology.
Sprue Aegis (SPRP) H1 rev flat, EPS 2.8p (-1.3p). "We remain hugely optimistic."

Wol

The Zoo Digital AGM statement looks interesting. They provide services to the film and TV industries (if I have understood it right)
1. Big increase in revenues from subtitling services (a new technology). At lower margin so will not bring any benefit through at EPS level
2. Early take up of dubbing services (also new technology) with first services to be delivered this month.
Also high debt levels have been reduced by a placing a few months ago, though there is still some hang over from a possible conversion of debt into shares (see comments from Paul Scott in a recent SCVR)
Could be another Blue Sky stock that never goes anywhere. Or the start of something good. They are no longer loss making (which is a definite good sign). Still definitely speculative. I have taken a small holding this morning. Shares are up 4.5% as I write

FREng

Update from GAME Digital (LON:GMD) today. Management seem to be on the case, but they have a lot to do. No update on what Mike Ashley's shareholding means. I'm thinking of banking profits.

Interims from Spaceandpeople (LON:SAL) today. I'm neutral.

Benson212

Zoo Digital (LON:ZOO) looks like a fantastic trading opportunity. The stock has formed a very bullish chart pattern called a "High and Tight Flag" and has broken out of a pivot point on above average volume. High and Tight flags are one of the most profitable, bullish trading patterns you can find in the markets, so I've also taken a position this morning too!

Logic

Is the update out yet? I am not seeing it on their website.

willhampson

I have seen no update either from GAME Digital (LON:GMD); so no idea what FREng is talking about. Very happy to be corrected.

This is on Stockopedia and ADVFN

Year-end Trading and Business Update

GAME Digital plc ("GAME" or the "Group") today provides an update on trading for the 52 week period ended 29 July 2017 and recent key business developments ahead of entering its year end close period. Unless otherwise stated, second half and full year figures are compared to the 26 week and 52 week period to 23 July 2016 respectively in the prior year period.

H2 & FULL YEAR GROUP PERFORMANCE

H2 (26 weeks) to 29 July 2017

UK

Spain

Group

Retail Market, YoY % change*

+8.8%

+26.4%***

+13.8%^

GAME Gross Transaction Value, YoY % change

(1.3)%**

+23.1%***

+6.8%

Full Year to 29 July 2017

UK

Spain

Group

Retail Market, YoY % change*

(6.8)%

+22.4%***

+0.1%^

GAME Gross Transaction Value, YoY % change

(12.1)%**

+22.7%***

(2.3)%

Note:

* Source: GfK Chart-Track; based on value of retail sales of mint console hardware, software, digital and accessories for 52 weeks ended 29 July 2017

** UK includes both UK Retail and UK Esports, Events & Digital (E,E&D) sales

*** Converted into sterling equivalent

^ UK and Spanish markets combined

As reported in the Group's trading update on 30 June 2017, following the launch of the Nintendo SwitchTM console in March 2017, both the UK and Spanish video games markets have experienced growth, with total mint market sales in the second half up 8.8% and 15.7% respectively in the UK and Spain, in local currencies. Adjusting for the impact of a weaker Pound, the Spanish market rose 26.4% in Sterling terms.

Against this backdrop, the Group's total Gross Transaction Value1 ("GTV") rose 6.8% in the second half, to 325.4 million (H2 2016: 304.6 million) which resulted in total GTV for the full year to 29 July 2017 of 891.7 million (2016: 912.6 million). On a statutory basis, Group revenues for the 52 weeks ended 29 July 2017 are expected to be approximately 780 million (53 weeks ended 30 July 2016: 822.5 million).

The Group has continued to maintain a highly-disciplined approach to both working capital and cash management and given the recent improved sales performance expects to report an increased year end cash position (net of overdrafts) of approximately 47 million (2016: 43.1 million). In addition to this positive net cash balance, as at the year end the Group had access to combined facilities across the UK and Spain of over 77 million.

OPERATIONAL UPDATE

The Group continues to focus on delivering the UK Action Plan, initiated in January 2016 to address the challenges faced in its core console markets in the UK. Further encouraging progress has been made in the second half delivering on key strategic initiatives and realising cost efficiencies.

In particular, significant focus has been placed on reducing fixed and variable costs across the Group's UK retail footprint, where it has over 220 lease events to manage by the end of 2018 (out of a total UK footprint of 306 at year end). In aggregate, across these property and other operational efficiencies, the Group expects to deliver a total cost reduction of approximately 5 million across its UK retail operations compared with last year, before absorbing the impact of statutory increases in staff costs.

STRATEGIC UPDATE

Given the encouraging early performance and significant potential of the Group's esports activities, including the first 18 retail concepts now in operation under the BELONGTM brand, the Board has recently undertaken a review of all business areas across the Group. Following this review the Board has prioritised the further development of the Group's experience based gaming proposition and esports activities and, consequently, the Board has taken the decision to evaluate strategic options for the Group's digital enterprise activities, including Multiplay's Digital division. It is intended that the Group will focus management and capital resources on the acceleration of the development of the esports and live gaming initiatives and maximise the performance of the core multi-channel retail businesses.

Accordingly, the Group is continuing to develop Multiplay's Events and Esports activities, including the Insomnia gaming festival, and has recently commenced a review to maximise shareholder value in respect of Multiplay's Digital business. Having acquired Multiplay in March 2015, the Group has further developed both the Digital division, comprising its multiplayer game server-hosting technology, and the Events and Esports activities, encompassing major gaming and esports events and the new BELONG concept. Benefiting from this development both divisions have independently delivered significant revenue growth over the last twelve months. Multiplay's Digital sales have more than doubled, from 2.1 million to 4.5 million, whilst Multiplay's Events and Esports sales have increased almost 50%, from 4.8 million to 7.1 million. Last year, the Multiplay Events and Esports business was relocated and its integration into the core GAME business has commenced. Multiplay's Digital division remains a separate business unit, based in the New Forest, Hampshire.

Martyn Gibbs, Chief Executive Officer of GAME Digital, commented:

"GAME has made further progress in the second half of the year as we continue to focus on developing our strategic initiatives whilst creating a new cost base for our UK retail business to address the challenges in the UK console market.

"We have been encouraged by the recent growth in both the UK and Spanish markets overall and we expect that this momentum will continue into peak trading driven by the benefits of continued customer demand for the Nintendo SwitchTM, the launch of Microsoft's Xbox One X and a strong line up of new games releases.

"GAME has now opened 18 BELONGTM arenas, and we have seen encouraging early performance. We have reviewed our operations and are now accelerating development plans as we seek to fully capitalise on the strong growth potential in our exciting and growing esports activities."

FYI, Graham is now posting on SCVR.

This looks very similar to the statement released 23rd of August (search for RNS number 7123O or look at http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/GMD/13338634.html).

Are you certain that it was released today?

Umm, what you've just posted is from August...

timarr

That update is from 23rd August ...

I Read The News Today Oh Boy! 25-Sep-2017

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Matylda

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