Last Saturday there was much coverage in the media of comments made by Andrew Tyrie (Chairman of the House of Commons Treasury Select Committee) commending the Coalition for its deficit reduction strategy and criticising it for not having a coherent and consistent strategy for the revival of an enterprise culture. The paper (which embodies much common sense) is well worth a read and can be accessed on the Centre for Policy Studies Website (www.cps.org.uk) by clicking on "It's the Economy" by Andrew Tyrie.
A key aspect of the paper which appealed to me was the categorisation of Government initiatives into those which are applicable to an era of Abundance (the past) and an era of Austerity (the present and medium term future). Mr Tyrie makes the point that over the last 18 months, many initiatives still seem more appropriate for an era of Abundance rather than Austerity, and will have very limited impact on reviving an enterprise culture. Regarding the latter point, I particularly liked the following paragraph:
"The public's overriding concern now is the maintenance of their living standards and prospects for their families. Against a bleak economic backdrop, it is only with a revival of the enterprise culture that the Coalition can satisfy the aspirations of the British people. And it is only by satisfying those aspirations and by releasing the productive energies of millions of individuals and small businesses - the crucial but neglected 'little platoons' of our economy - that sustained prosperity can be restored."
LCFR's role is to look for 'little platoons' which conform to its investment template.
In my letter of 14th September, I expressed very negative views about the potential bid currently hanging over Parseq (a 'little platoon' conforming to LCFR's template) which is being led by the individual who introduced Documetric to the group. Last week Parseq announced its interim results to June 2011 (see below). These provided ample evidence to support my earlier views; the sales of Documetric fell from £5.2 million to £4.4 million, whilst the original business (Software) grew sales from £2.7 million to £3.8 million, with adjusted operating profit of £943,000 (2010: £76,000 loss).
Whilst the company's broker cannot publish forecasts due to the existence of the potential bid, another broker is projecting EPS of 0.5p for 2011 and 1.1p for 2012 vs. a current share price at the time of going to print of 6.63p.…
