I Read The News Today Oh Boy! 7-Mar-2018

7th Mar '18 by matylda

9 comments 4671 reads

Morning all!

Anpario ( Anpario (LON:ANP) ) – 425p – £98.3m – PER 25.8

Final Results For The 12 Months To End December 2017 – Revenues up 20% to £29.2m (2016: £24.3m), PBT up 27% to £3.4m (2016: £2.7m), Diluted EPS up by 13% to 14.17p (2016: 12.58p). Net Cash £13.6m (2016: £11.1m) and the total Dividend is 18% up on last year, 6.5p. Optimistic about the outlook, potential issues being FX and raw material prices.

I quite like this and I think if the outlook was a little more optimistic I would be more interested. For now I will remain Neutral.

Bioquell ( Bioquell (LON:BQE) ) – 322.5p – £72.5m – PER 28.0

Preliminary Results For The 12 Months To End December 2017 – Revenue up 6% (CC) to £29.2m (2016: £26.5 million), PBT of £3.3 million (2016: £0.1 million), Diluted EPS 10.8p (2016:1.2p) with Cash (and equivalents) at £14.6 million (2016: £8.8 million). 2018 has started in-line.

Doubled in the past 12 months but I don’t see enough here at present to tempt me.

Lookers ( Lookers (LON:LOOK) ) – 93.3p – £370.0m – PER 6.42

Results For The 12 Months To End December 2017 – Revenue up 15% £4,696m (vs £4,088m), Adjusted PBT of £68.4m (vs £64.9m), Adjusted EPS up 1.3% (14.57p) and the Dividend is up 5%. Q1 expected to be in-line with management expectations. Share Buyback also announced, up to £10m.

At present, I am no more keen on buying this today than I was yesterday.

Microgen ( Microgen (LON:MCGN) ) – 500p – £304.4m – PER 27.3

Preliminary Results For The 12 Months To End December 2017 – Revenue up 46% to £62.6m (2016: £43.0m), 37% excluding the benefit of recent acquisitions. Adjusted Operating Profit up 43% to £13.6m (2016: £9.5), Statutory £11.1m (2016: £8.2m). Adjusted EPS up 39% to 17.1p (2016: 12.3p), Total Dividend for the year will be 6.25p (2016: 5.0 pence), an increase of 25%. Cash is £19.1m (2016: £23.8m). The Chairman states “The Group enters 2018 well positioned with good revenue visibility and an encouraging pipeline of opportunities”.

I am very tempted here and if…

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MrContrarian

7th Mar '18

My morning smallcap tweet:

Water Intelligence (LON:WATR), Tyman (LON:TYMN), NATURE (LON:NGR), Mysquare (LON:MYSQ), Volvere (LON:VLE), Palace Capital (LON:PCA), WANdisco (LON:WAND), Mirada (LON:MIRA)

Water Intelligence (WATR) placing at 195 (4% discount) for the acquisition of the Louisville, Kentucky franchise and working cap.
Tyman (TYMN) placing by bookbuild to fund the acquisition of Ashland Hardware.
Nature Group (NGR) in advanced discussions with a preferred bidder having reached agreement on indicative terms and pricing on firesale of O&G division to cut debt. Its lender will wait to end of April 2018.
MySQUAR Limited (MYSQ) The Bell of Doom rings as MYSQ turns to death spiral finance of £2.1m ostensibly to fund a potential acquisition or investment into a company that is developing mobile payment services. If it's for an acquisition why do theyneed the cash now?
Volvere (VLE) FY trading. Rev & preax up substatially due to Impetus Automotive. Shire Foods profit down - "we are investing in Shire so that we have the capability to grow. We expect revenues to increase in 2018 and with that, profitability, although this will depend on our ability to contain the effects of higher raw material and labour costs." NAV 656p (end H1 623p). I hold.
Palace Capital (PCA) increased interest rate hedges to 70% of drawn debt. Will inc av cost of debt from 2.9% to 3.4%.
Wandisco (WAND) Fusion will be sold as a standard component on Alibaba Cloud. WANdisco's first OEM agreement in China significantly expanding addressable market.
Mirada (MIRA) takes a secured one-year loan facility from a shareholder for up to £3m at 15%. FIFTEEN PERCENT! "The Directors are confident that as a result of its pipeline of potential new customer contracts and the expected revenues from its recently won contracts now being implemented, the Company's cashflow position will improve and it will be able to satisfy all debts as they fall due."

matylda

My brokers website is down this morning (idealing) and when I called them they couldn't even process an order for me (for VLE) or for anything for that matter.

Anyone else having broker or execution issues this morning or is just idealing?

Think I need to change to one of the bigger players as this is not the only poor (expensive) experience this year.

Considering HL - I assume most are happy with it?

gus 1065

Hi matylda.

Thanks as ever for the excellent early morning updates.

I’ve done a couple of trades this morning online via my broker, Charles Stanley. Not the cheapest (£11.50 per trade) but service is good and I like the platform and portfolio reports (including a very good capital gains calculation for my annual tax return). Seems to be working fine at the moment.

With regards to Volvere (LON:VLE) , I’ve bought in the past, prompted by Graham’s analysis and my own review, but found it to be very illiquid. Consequently a small EMS (300 shares quoted, often lower when in demand) and a crazy wide spread of at least 50p/5%. Consequently, I’ve tended to wait for no news or down days and put in market orders at or around mid market and had some success in accumulating a reasonable position. Not sure there’ll be much on offer at a sensible price today.

Gus.

andrea34

Quite a busy day for results!

I think Microgen (LON:MCGN) are exceptionally good value in what is still a frothy market, their Aptitude software is doing extremely well, thus the historical, and more pedestrian, Financial Systems division is less of a drag. The price is quite susceptible to market sentiment so I don't know whether I'll add at the moment... but wishing I'd done so when they were around 400 recently.

Lookers (LON:LOOK) overall look quite tempting, if only for the 4% yield... though the whole sector is on a low PER. The outlook seems reasonable, relative to sector sentiment and particularly with respect to Cambria Automobiles (LON:CAMB) who announced a dull trading statement yesterday, I think Lookers (LON:LOOK) have a broader reach and offering. My favourite in the sector remains, as ever, Marshall Motor Holdings (LON:MMH) which I continue to hold.

I'm sorry, I don't get the euphoria with Volvere (LON:VLE) - why would one pay up £10 for an NAV of £6.56? That's like going into Currys and seeing a TV for £699 and saying "would you do a deal and sell it to me for £999? I know, I'm looking at this far too simplistically. Different comparison then, slightly more relevant, I have a holding in CLS Holdings (LON:CLI) who have announced, as ever, good results today, with NAV of 286p... and yet the share price is around 243p. One final comparison, more relevant again, is to Draper Esprit (LON:GROW) - they are the closest thing I know to Volvere (LON:VLE) and yet they are only on a 37% premium to NAV compared to a 52% premium that Volvere (LON:VLE) enjoys, and yet they have a much broader (and thus less risky) portfolio, and have recently made a substantial gain on the disposal of one of them. I'm glad Volvere (LON:VLE) is shooting up, for all you holders, but I just don't see the attraction - the performance is also solely down to one, small, company, Impetus... and the only two other holdings they are have are exhibiting a negative performance... with a rather guarded outlook.

Rusty2

Hi Matylda, HL is working fine today, I tried to buy some Volvere (LON:VLE) but very illiquid and wide spread, price gone up too much now. HL are generally OK with the odd glitch.

BTW Matylda, I'd recommend The Share Centre for execution only trading, the charges are very low, and if you buy 500 shares of them then you get a further discount in buy/sell charges. They are also pretty good at getting a good price on the market for most stocks, I have found. However, for some reason both Volvere (LON:VLE) and Draper Esprit (LON:GROW) are marked as non-dealable (will have to find out why), however a trade in Lookers (LON:LOOK) will go through fine.

rivaldo

Andrea341, as regards VLE you need to look a lot deeper.

The quoted NAV is completely understated as regards the true NAV, since it only accounts for each of VLE's investments at their (tiny) cost. Thus the fair value of each investment for what it might fetch on sale has to be extrapolated from its results.

In addition, VLE now holds over £18m of cash, or around 500p per share, plus another 62p per share of freehold property. This alone backs up most of the quoted NAV - which means that all the subsidiaries are valued at almost nothing.

After the June'17 interims, another poster produced a "sum of the parts" valuation as follows which gave an NAV of 1,389p per share, with additional upside as follows:

"1. Shire: My profit assumption for H2 is that it will match last year's H2 of £1.02m. We are now past the anniversary of sterling devaluation, so the negative impact on margins has worked through. The re-pricings they have progressively done through H1, and also the fact that sterling in H2 may actually be better than H2 last year, may make the out-turn better. A full year out-turn PBT of £0.78m, I apply a lowly rating of 5* Post Tax Earnings to derive a value of £3.1m.

2. Impetus: I am hoping for at least Â£3.7m PBT as already explained. I would value this much more highly, and think a market average P/E of 14 times is prudent given the growth and contractual backing for the earnings. Value £41.4m.

3. Perhaps harshly I give no value to Sira.

4. £2.6m of NTAV given that it is mostly freehold property.

That gives a Gross Value of £47.2m, from which I deduct 20% for Minorities and a further 10% for Bruvva's Bonus for the increase in value created....so net net £31.2m. I would expect year end cash to be at least £22.5m, so my total SOTP valuation of the business is £56.6m (£13.89 a share)."

The above valuation is nicely prudent, but increases to around 1,500p per share if you assume a reasonable 10% growth rate for Impetus, introduce any value at all for Sira Defence etc.

Thanks for the in-depth valuation breakdown, rivaldo - I can't deal in them anyway with my broker.

Andrea

Thanks all for the comment, most welcome, will have a look at HL and Share Centre - And still considering Volvere (LON:VLE) - Thanks rivaldo too from me for taking the time to provide such a detailed update.

I Read The News Today Oh Boy! 7-Mar-2018

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Matylda

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