I Read The News Today Oh Boy! 30-Apr-2018

Monday, Apr 30 2018 by
25

Morning all!

Back in the saddle again after a memorable (well, I remember most it) Mello 2018. It was an absolute pleasure to meet many of you who contribute here on a regular basis and some who don’t (some of the latter referring to themselves as “lurkers”). It was also a pleasure to meet some unknowns, fellow investors who usually confine themselves to the Twittersphere (or whatever it’s called) - As promised I will try and join in there, in some form or another, sooner rather than later.

Just before getting onto this mornings news, and I am not the first here for sure…

I just feel a real special thanks is due to all those involved in organising the Mello 2018 event. It was awesome! It obviously took some doing, especially with it being done so well. So, here’s a special thank you from me and - Count me in next time!

Now, onto the news…

Interserve ( Interserve (LON:IRV) ) – 106.9p – £155.8m – PER 5.98

Final Results For The 12 Months To End December 2017 – Revenue £3,250.8m (£3,244.6m last time), Loss Before Tax -£244.4m (£94.1m last time), Net Debt £502.6m (£274.4m last time). Refinancing, Cost cutting, etc. in place now but “still much to do”.

Up almost 100% in the past couple of months but I’m not yet convinced. I will however move it from my Avoid list to Neutral. It is very rare I would ever go straight from Avoid to a purchase, firstly I prefer to see something to at least convince me to go Neutral – And, these results do, but not with a great deal of conviction.

Luceco ( Luceco (LON:LUCE) ) – 66.8p – £107.4m – PER 6.96

Results For The 12 Months To End December 2017 – Statutory – Revenue up 25.4% to £167.6m (2016: £133.7m), that’s 21.7% CC, Operating profit up 19.3% to £14.2m (2016: £11.9m), Basic and Fully Diluted EPS up 34.8% to 6.2p (2016: 4.6p) with Net Debt at £36.7m (2016: £29.5m).

I can’t see enough here to get me to take this of my Avoid list yet.

UP Global Sourcing Holdings( UP Global Sourcing Holdings (LON:UPGS) ) – 36.2p –…

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Interserve Plc is a United Kingdom-based support services and construction company that offers advice, design, construction, equipment, facilities management and frontline public services. The Company provides a range of integrated services in the outsourcing and construction markets. It operates through three segments: Support Services, Construction and Equipment Services. The Support Services segment focuses on the management and delivery of operational services to both public and private-sector clients in the United Kingdom and internationally. The Construction segment offers design, development, consultancy and construction services for building and infrastructure projects. The Equipment Services segment operates globally, designing, hiring and selling formwork and falsework solutions for use in infrastructure and building projects. It provides outsourced services in sectors, such as hospitality, leisure, education, defense, retail, and oil and gas across the Middle East region. more »

LSE Price
6.05p
Change
-37.0%
Mkt Cap (£m)
n/a
P/E (fwd)
n/a
Yield (fwd)
n/a

Telit Communications PLC (Telit) is a United Kingdom-based enabler of machine-to-machine (M2M) communications providing cellular, short range and positioning modules via its brand Telit Wireless Solutions. The Company develops and markets cellular, global navigation satellite system (GNSS), short-to-long range wireless modules plus mobile connectivity services and application enablement platform to onboard edge devices to the Internet of Things (IoT). The Company is organized into three geographical segments: EMEA, APAC and Americas. Through its business unit m2mAIR, Telit provides platform as a service (PaaS), including M2M managed and value added services, application enablement and connectivity, including mobile network side and cloud backend services. Its modules are integrated in a range of applications, including asset tracking, remote industrial monitoring, automated utility meter reading, insurance telematics, consumer electronics and mobile health devices. more »

LSE Price
163.2p
Change
2.3%
Mkt Cap (£m)
215.7
P/E (fwd)
25.8
Yield (fwd)
n/a

Sanderson Group plc is engaged in software and information technology (IT) services business specializing in digital retail technology and enterprise software for businesses operating in the manufacturing, wholesale distribution and logistics sectors. The Company's segments include Digital Retail and Enterprise Software. Its digital retail solutions include in-store technology; back-office systems for processing sales and fulfilling orders, and mobile and e-commerce solutions to underpin online operations. Its systems allow retailers to keep pace with new devices, technologies and channels, driving consumer engagement and retention. It offers Enterprise Resource Planning (ERP) software for manufacturing in general manufacturing, engineering, and food and drink processing businesses. The Company offers industry-specific software and warehouse management systems, delivering sales growth across wholesale distribution, cash and carry, fulfilment and logistics businesses. more »

LSE Price
140.5p
Change
 
Mkt Cap (£m)
90.4
P/E (fwd)
15.5
Yield (fwd)
2.6



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7 Posts on this Thread show/hide all

MrContrarian 30th Apr '18 1 of 7
5

My morning smallcap tweet:

Velocity Composites (LON:VEL), UP Global Sourcing Holdings (LON:UPGS), Ten Lifestyle (LON:TENG), Sanderson (LON:SND), Sealand Capital Galaxy (LON:SCGL)

Velocity Composites (VEL) H1 and warns FY below mkt forecasts because "some programmes that the Company has been working on have seen short term reductions in demand signals and these fluctuations have affected some rates of growth with existing customers." Will have a reduced knock-on effect in future years, as contracts will achieve full production later than anticipated.
UP Global Sourcing (UPGS) H1 & FY in line. Is there a better named CEO for fronting a company? Simon Showman.
Ten Lifestyle Group (TENG) a leading lifestyle and travel platform for the world's wealthy and mass affluent. Is 'mass affluent' fat people? Guides FY rev for FY2018 and 2019 approximately £6m and £10m below previous expectations but EBITA loss in FY2018 materially less than previous expectations due to better operational efficiency. Profitability in FY2019 will be lower than previous expectations as delayed investment spent. Gives four reasons for the rev miss. usually a sign of not taking it on the chin.
Sanderson Group (SND) guides H1 slightly ahead of management's expectations.
Sealand Capital (SCGL) suspended - will not be able to publish its audited FY accounts for 2017 due to a delay in the audit.

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TangoDoc 30th Apr '18 2 of 7
9

Matylda, you are a breath of fresh air and I note your encouraging remarks about posting. One reason I stay is that, as you say, this is not much like other fora I have experienced in the past. However, I notice that, following being roughed up on a thread, I often write a post then don't submit it.
I was comforted in a private message not to take too much notice of one slap-down but it made me think that, if my point of view was so against the echo chamber, I would avoid experiencing further unpleasantness and simply attend as a gleaner, or "lurker", as you put it. I wonder how many others feel the same?

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melody9999 30th Apr '18 3 of 7
2

Hi Matylda - fully agree with your comments on Mello - superb event and a must for any serious investors in small caps. Congrats to David and all the organisers. 2 comments - has it outgrown the venue - we all struggled a bit to get to hear some great speakers given the smallish size of the main room .... and is there room for some quality profitable oil gas and resource companies? On that note, great results from DGOC this morning.

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john652 30th Apr '18 4 of 7
2

In reply to post #358903

Hi Tangodoc,

I’d say just post, the most value here is often on differing views. For every share bought there is someone selling, so a consensus here is just a bias to one side of the markets view. I’d much rather hear the share I love is a basket case, as often I have missed something.

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BlueFrew 30th Apr '18 5 of 7
5

2 companies where I have a short position have reported today.

Interserve (LON:IRV) - Dreadful results as expected. Incredibly expensive borrowing they've had to take on to stop the ship sinking. Handed over a significant portion of the company with warrants at 10p. The whole outsourcing sector over promises and under delivers. If they were more realistic, the "benefits" of outsourcing would disappear very quickly. To survive and start paying back their huge borrowings they not only have to be more realistic, but put their prices up considerably. Death has only been delayed here, not avoided.

Telit Communications (LON:TCM) - EBIT. EBITDA. Losses before exceptionals. There's a profit/loss figure for everybody in here. Who are they trying to fool? Us or themselves. They raised $49.7m in a placing last year and debt still rose by $12.5m. Unbelievable that Yosi Fait is still in position as CEO. This should be a slam dunk for the FCA. I'll bet the Italian taxpayer would be delighted if they realised that they are backstopping this particular enterprise.

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andrea34l 30th Apr '18 6 of 7
3

Thanks Matylda for the usual wake up call :-) The encouragement you offer is very kind, I have a lot of years of distinctly amateur investing, though it has been hit and miss. I am not so knowledgeable about company balance sheets and measurements, and I sometimes find other posting areas such as the Small Company one a bit intimidating, especially when I say something that some consider stupid and give me a thumbs down. Anyway, here's a few of my own comments:

I agree with you on Luceco (LON:LUCE) on their results, I can't see the wood for the trees with all the adjustments and previous accounting issues, but overall if one looks at the segmentation breakdown only one division seems to be doing okay.

I am a holder of Sanderson (LON:SND) and encouraged by the latest update - revenue and profit to be up 30% is surely a good performance and, even if one assumed a pessimistic increase in eps of only 20% then at the current buying price of 95p (up 5.6% today so far) then the PER would be only 15.2m, which seems ludicrous to me. They seem to have had a significant boost all round since the acquisition of Anisa.

There is a portfolio update from Draper Esprit (LON:GROW) today, it is perhaps disappointing there is no actual financial quoted for the sale:

Draper Esprit... announces the sale of portfolio company Tails.com, the direct-to-consumer, tailor-made dog nutrition business to Purina Petcare, a subsidiary of Nestlé SA.Draper Esprit has a long history with Tails.com, having backed its founder, serial entrepreneur, Graham Bosher, first at Lovefilm and then at Graze. The transaction has been executed at a value supportive of the NAV as at 31 March and represents an attractive return for Draper Esprit.

Image Scan Holdings (LON:IGE) have announced their interims today which has made the price tick up 17%; the fact that despite the cancellation they have made a small profit and gross profit is actually only marginally down seems encouraging, as is the order intake (I'll continue to hold):

Financial summary:

·      Order intake increased by 54% to £2.0m (2017: £1.3m)
·      Revenue flat at £2.0m (2017: £2.1m)
·      Gross profit margin increased to 40% (2017: 39%)
·      Profit before taxation of £39k (2017: £111k)
·      Period end bank balance of £752k (2017: £469k)
·      Period end order book of £1.1m (2017: £940k)

Operational highlights:

·      Despite the order cancellation, the number of X-ray units sold increased over the prior period
·      All units from the cancelled order now sold to other customers
·      New ThreatScan® 2 precision detector launched; first orders received
·      70% of sales to Indian Subcontinent and Asia
·      Sales campaign in South America produced first order
·      Orders received for 5 industrial units
·      Updated quality management system passed ISO 9001:2015 assessment

TP (LON:TPG) have announced two MOD contracts, together representing revenue of at least £1.8m, possibly increasing to £2.6m.

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matylda 1st May '18 7 of 7

Thanks for the input all and sorry about the late reply.

"Lurker" was a term mentioned to me, it is not my own.

The discussion experience for me at Stockopedia has proven to be the most constructive of all I have come across. It seems well policed and acceptable of sensible Bull & Bear content as well as content from experienced investors and those less so experienced too. I hope it continues to attract as many as possible along these lines.

Mello - Yes, it was a pity the main room was not big enough. I have found recordings for most of what I missed but I would have much preferred to have been able to get in the room. In the scheme of things though, considering the price and all the positives, it was a minor point which I am sure will be addressed next time - When I suppose it will be even bigger!

Cheers!

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