I Read The News Today Oh Boy! 27-Sep-2018

Thursday, Sep 27 2018 by

Morning all!

Adept Telecom ( Adept Telecom (LON:ADT) ) – 380p – £90.1m – PER 12.6

AGM Statement – Company name change to “AdEPT Technology Group”, Interim Dividend up 15.3% - Confident results will support this.

I bought in here recently and although this isn’t the most reassuring of updates (in-line, ahead, ???) I will continue to hold for now – Of course with an eye on the market reaction to this update.

Zoo Digital ( Zoo Digital (LON:ZOO) ) – 170p – £126.4m – PER 90.1

AGM Statement – Revenues 17% up on the same period last year, FY to be in-line with expectations.

I remain Neutral here as I believe this may well have gotten a little ahead of itself – Although it does seem to be in a great space!

Bonmarche Holdings ( Bonmarche Holdings (LON:BON) ) – 103p – £51.5m – PER 6.64

Trading Update – On-line sales in-line, stores below expectations – Revised Underlying PBT for FY 2019 £5.5m (I think £8m, same as last year was expected, not sure (seems FX is partly to blame)). Total 2019 FY Dividend to be the same as last year, 7.75p.

Mixed bag here but still a decent yield. However, it’s tough (for me) to work out the potential capital loss/gain – I remain Neutral.

VP ( VP (LON:VP.) ) – 1095p – £439.7m – PER 11.1

Trading Update – In-line.

Still some attraction here but the Net Debt is enough to keep me Neutral at present.

Volvere ( Volvere (LON:VLE) ) – 890p – £32.6m – PER 15.8

Interim Results For The 6 Months To End June 2018 – Record Revenue (£22m), up about 20% and PBT (£1.28m), up about 60%. Very strong performance by Impetus with Shire and SDS meeting expectations. Look forward to delivering a strong H2.

I remain Long here, still seems decent value on a PER of 15 (much less if you strip out the Cash).

As always, all comment most welcome!

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AdEPT Technology Group plc, formerly AdEPT Telecom plc, is engaged in providing managed services for information technology (IT), unified communications, connectivity and voice to over 100 Councils, NHS Trusts and other government bodies. The Company's segments are fixed line services (being calls and line rental services) and managed services (which are data connectivity, hardware services, IP telephony, support and maintenance services). It is engaged in the provision of voice and data communication services to both domestic and business customers. The Company offers technical and commercial options for onsite and cloud-based telephony. The Company serves approximately 20,000 commercial customers including worldwide and nationwide brand names. more »

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ZOO Digital Group plc is a holding company. The Company's principal activities include provision of a range of services to allow television and movie content to be subtitled in any language and prepared for sale with online retailers, and research and development of productivity software in those areas. The Company operates through two segments: Software solutions, which includes development, consultancy and software sales, and Media production, which includes localization and design. The Company offers services, including subtitling, captioning, dubbing and digital distribution. The Company offers services through its cloud computing platforms, including ZOOsubs, which offers subtitling and captioning services; ZOOcore, which is a workflow management platform; ZOOstudio, which is a self-service distribution platform for ordering, tracking and delivering digital content packages, and ZOOdubs, which is a dubbing process management platform. more »

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Bonmarche Holdings plc is a multi-channel retailer of womenswear and accessories. The Company offers clothing and accessories in a range of sizes for women through its own store portfolio, Website, mail order catalogues and through the Ideal World TV shopping channel. The Company's subsidiaries include Bluebird UK Topco, Bluebird UK Holdco and Bonmarch Limited. The Company has approximately 310 stores across the United Kingdom. more »

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  Is LON:ADT fundamentally strong or weak? Find out More »

4 Posts on this Thread show/hide all

MrContrarian 27th Sep '18 1 of 4

My morning smallcap tweet: BON turns bad again.

Eservglobal (LON:ESG), Midatech Pharma (LON:MTPH), Bonmarche Holdings (LON:BON), Zinc Media (LON:ZIN), Impellam (LON:IPEL)

eServGlobal (ESG) Placing at 6.25p, a 4% premium but SP was 7.5p 2 weeks ago so crystal balls being rubbed perhaps. Cash needed "to fund the Company's share of an expected capital raise by the HomeSend JV and to help position the core eServGlobal business for sale." The core business is anticipated to return to growth this year...discussions with a small number of interested parties regarding the sale of the core business, with an update expected to the market within eight weeks."
Midatech Pharma (MTPH) Proposed Sale of Midatech Pharma US for $13m and ear out of $6m. Net proceeds will fund key R&D priorities eg MTD201 Q-Octreotide and MTX110 plus repaying the loan to MidCap Financial.
Bonmarche (BON) warns it expects FY underlying pretax only £5.5m (£8m).- blames consumers would you believe.
Zinc Media Group (ZIN) FY rev up 5% but EPS-cont -0.17p (-0.01p). Trading: "very encouraging win rate on significant commissions. This has exceeded the same period in the prior year. The current TV commissioned order book stands at £14.5m, over 50 per cent of budgeted TV revenues for the current financial year. The strength of our order book gives us a basis for confidence in the outlook for the full year..."
Impellam Group (IPEL) Warns FY EBITDA lower YoY. Managed Services businesses in the UK and Australia growing ahead of expectations as is the entire US business, on a like for like currency basis. and accounts for 60% of total EBITDA. NHS market remains challenging due to the continued reduction in agency spend. HNS has reinforced its intention to reduce agency spend by 17% in 2018/19 so the usual seasonal uplift in September has not materialised. Also recent reduced volumes in certain of UK Specialist Staffing brands. FX moves hurting. Nurse!

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mrosbiston 27th Sep '18 2 of 4

Zoo Digital (LON:ZOO) comes across more like a veiled profit warning

Disruption has been experienced by us and other market participants in the subtitling supply chain during the transition of a major OTT operator's partner programmes, but this is easing, and we are seeing normal operations increasingly restored

At least the share price was getting a little ahead of itself.

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andrea34l 27th Sep '18 3 of 4

Another very useful update... especially as some companies listed are, or now were, of interest.

I find the update from Adept Telecom (LON:ADT) very positive, and also find it reassuring that they are already confident enough to declare an interim dividend up over 15% before they have even finished the first half of the year. I first bought almost exactly a year ago at 305 and more recently at 373 after the last results... and have bought a third lot just now - take a look at the Stocko page, to me it looks fantastic, and you'll also notice a recent massive uplift in broker forecasts... which they'll hopefully meet with the acquisition.

Well, a BIG phew!! I so nearly bought Bonmarche Holdings (LON:BON) after the last update, and Graham seemed quite positive too... but something made me pause. I find their big swings between positive and negative updates unnerving, and they are always blaming the weather. I really don't think retail is in a good place at the moment and is a sector to avoid. I do like the look of JD Sports Fashion (LON:JD.) but I'm afraid they could even be an eventual casualty.

I used to hold VP (LON:VP.) and sold just above the current price a little while ago. Thanks for a previous comment you made on debt, it created a niggle in my mind and after a strong rise I felt it was time to move on. Admittedly, this in-line update sounds okay, if not glowing.

The update from Volvere (LON:VLE) sounds a bit more positive overall across the three companies. I'm just troubled they only have three investments. I much prefer the Draper Esprit (LON:GROW) and £3IN investment vehicles with a much wider spread of prospects.

Kromek (LON:KMK) are up strongly after a £1.8m contract from the US Department of Defense. I've been watching these for a while and, although the Stocko picture isn't exactly lovely, the deal flow seems to be getting strong and I feel progress is being made.

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JollyBiologist 30th Sep '18 4 of 4

I first bought Adept in 2014 at 139p and have been adding at regular intervals ever since. They are now my 4th largest holding behind Bioventix, Games Workshop and Somero. The Stocko numbers do look good at the moment - though they can come and go - but I've always liked the low capex business model (less than 1% of revenue) combined with their considerable cash generation (free cash flow conversion of over 80%). Some people worry about the debt, but as they explain, "it is not so much the quantum of debt for us, it is maintaining the leverage ratio. Our strategy is to keep the EBITDA:debt ratio to a max peak of 2.5x (as when you complete an acquisition you are carrying the debt but none of the profitability) with a target of getting back down to 2.0x within 9-12 months." In addition, over 40% of shares are held by directors/family, so their interests are clearly in alignment with shareholders.

They are also, in all my dealings with them, impressively competent. For example, my wife runs a small social enterprise - so not a big money spinner for Adept - but their efficiency and speed of response when she was setting up her new telephone line/broadband was in stark contrast to an organisation like BT.

As you can tell, I really like them!

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