I Read The News Today Oh Boy! 7-Feb-2019

7th Feb '19 by matylda

3 comments 1604 reads

Morning all!

Gattaca ( Gattaca (LON:GATC) ) – 111p – £35m – PER 4.6

Trading Update For The 6 Months To End January 2019 – Net fees up 2% with Net Debt down from £36m to £29m - FY in-line.

In this environment that Net Debt (coupled with pedestrian growth (reflected in the PER)) means I will be keeping this on my Avoid list for now.

On The Beach ( On The Beach (LON:OTB) ) – 440p – £577m – PER 16.7

AGM Trading Update For The 4 Months To End January 2019 – In-line with Revenue up 20%+.

This looks encouraging enough (30%+ off it's 52 Week High), I will keep an eye out for Broker updates here.

Superdry ( Superdry (LON:SDRY) ) – 508p – £416m – PER 8

Q3 Trading Update – In-line.

1st coverage here and need to do a little more research (almost 50% off it's 52 Week High) although not much tempted to the retail sector at present.

As always, all comment most welcome!

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MrContrarian

7th Feb '19

My morning smallcap tweet: DPP=desperate placing price

DP Poland (LON:DPP), Tax Systems (LON:TAX), Randall & Quilter Investment Holdings (LON:RQIH), Kromek (LON:KMK), Allied Minds (LON:ALM)

DP Poland (DPP) £5.3m placing and 0.5m 'broker option' at 6p, a desperate 58% discount. A 2.7x dilution. Cash to maintain medium-term store roll-out and keep the lights on. CEO goes end June. He is thanked. Maybe he'll get free garlic wedges.
Tax Systems (TAX) possible cash offer at 110p, a 10% premium. It rose 6p yesterday.
Randall & Quilter (RQIH) £100m placing and token £7m open offer at 153p, 15% discount. Share count expands by 52%. WIll be used for acquisitions.
Kromek Group (KMK) £20m placing and token £1m open offer at 25p, a 9% discount. Cash needed for expansion.
Allied Minds (ALM) Gravy train switches to narrow guage. CEO agrees to "materially reduce her cash salary for 24 months, commencing with calendar year 2019, and to defer payment of the balance of her salary into 2021. Any earned bonus for 2019 and 2020 will be satisfied in shares rather than cash." Target annualised HQ cash operating expenses will be reduced by $5.6 million, or more than 40%.

andrea34

When you say the Q3 update from Superdry (LON:SDRY) is in-line, do you mean in-line with forecasts? They are so far off highs because there has been a string of trading disappointments... and they are certainly not out of the woods yet! The summary statement says "Superdry's performance has remained subdued during quarter three. We continued to be impacted by the ongoing product mix and relevance issues we have previously highlighted and by the lack of any prolonged period of cold weather in our key markets". They used to report 20+% increases in revenue and profit, and now the overall group revenue is down 1.5%!! I am also not at all keen on retail.... and especially not a company that is so weather-dependent.

The overall update from On The Beach (LON:OTB) seems reasonable... but although revenue shows a significant increase note that they say they are spending more on marketing whereas last year this was low - so don't expect profits to increase as much as revenue. For me they also spoil the end of the update by saying "The first four months of the new financial year has delivered another solid period of growth for the Group" - I HATE that word 'solid'... and perhaps this is a reference to forthcoming profits...

matylda

Sorry about the late reply - Superdry (LON:SDRY) in-line is a reference to Underlying PBT for the FY (market expectations), apologies in my haste I was rather vague there this morning.

On The Beach (LON:OTB) - Not sure what solid refers to :(

I Read The News Today Oh Boy! 7-Feb-2019

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Matylda

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