As I hoped, last week’s results from SIF folio stocks Motorpoint Group and Character Group were showed decent progress at both firms.

Graham and Paul covered both sets of results in last Thursday’s SCVR report, which you can read here. I won’t repeat their excellent commentary, but one thing I would like to add is that Motorpoint continues to qualify for my stock screen based on its latest trading results. So it seems that leaving the portfolio’s holding untouched last week was the right thing to do.

SCVR to the rescue

I don’t often I come across a UK stock I have zero familiarity with. But this week my Stock in Focus screen has highlighted a company that’s completely new to me: D4T4 Solutions (LON:D4T4).

This AIM-listed software business is a specialist in data solutions. Luckily it’s been covered by Graham and Paul in the Small Cap Value Report on a number of recent occasions. Their standout work provides a fantastic pool of commentary to draw on when getting up to speed with new small-cap stocks.

What does D4T4 do?

House broker FinnCap describes this company as a “specialist provider of data collection, management and analysis solutions”.

In short, it seems that clients pay D4T4 to collect data “from all consumer touchpoints”. This data is then stored on the firm’s platform, which ensures it is compliant, complete and accurate. Technology such as artificial intelligence is used to analyse the data and create behavioural profiles, personalised offerings and other insights that might drive growth.

The company’s clients are pretty varied. According to the firm’s website, clients include Axa Insurance, major banks, the NHS, Qantas and Toyota.  

Essentially this is a Software as a Service (SaaS) business. Like most small-cap software firms, it’s vulnerable to lumpy contract awards. Last year the firm had a weak H1, but bounced back surprisingly well in H2.

This year’s performance has reverted to a more typical H1 weighting. Last week’s H1 results showed revenue of £14m and adjusted pre-tax profit of £3.35m for the six-month period. This translated into earnings per share of 7.4p.

Stockopedia is showing full-year consensus revenue forecast of £23m with earnings of 12p per share. So about 60% of these forecasts were delivered in H1. Finn…

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