Small Cap Report (15 Apr) - NWKI

Monday, Apr 15 2013 by

Pre 8 a.m. comments

Good morning. A fairly quiet morning today for results. I'm looking at reasonably good results from Networkers International (LON:NWKI), an AIM-Listed recruitment company. It looks good value to me. They have delivered 4.7p EPS for the year ended 31 Dec 2012, which is ahead of broker consensus forecast of 4.3p. It seems to have been higher gross margins that has driven the out-performance, up from 16% to 18%.

The market cap is £39.5m at 43.5p per share, plus there is £6.9m of net debt, although that relates to invoice discounting. With a net current asset position of £14.2m, the balance sheet looks fine, so seems to be a question of customers being a bit slow in paying, rather than there being any problem level of debt.

With a PER of 9 times 2012 earnings, and a dividend increased 25% to 1.25p (for a 2.8% yield) this looks reasonably priced, although there doesn't seem to be much growth in evidence. That could change in a recovering economy though, so in my view reasonably priced recruiters are a good place to invest right now. Most have re-rated in the last year, some substantially, whereas this one has only risen from a 12 month low of around 35p in Oct 2012 to 43.5p now. Hence could be more upside to be had here, possibly?

They mention upside from the roll-out of 4G networks.


Post 8 a.m. comments

As an aside, if you use MoneyAM for live streaming prices, as I do, then my friend MrContrarian has come up with a really neat innovation that lets you view twice as many share prices on one page, by presenting it in two panes. I find it very useful indeed, especially on a smaller screen, the URL to use this is:

Many thanks to MrC for sharing that useful facility with others.


It's becoming clearer by the day that Gold is anything but a safe haven, but is actually a volatile & highly sepculative bubble. The price has dropped about 10% in the last two trading days now. I will not be revisiting that, after my failed attempt at hedging my equities around the time of the Cyprus Eurozone crisis by going long of Gold. It didn't work, and I clearly don't have any expertise in that area,…

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7 Comments on this Article show/hide all

Funnymoney 15th Apr '13 1 of 7

I may well be wrong, but does the Moneyam feature take you to a proxy so that your login data is available to 3rd parties? I don't see how it works otherwise because it is not something provided by the website itself. Please correct me if I am wrong.

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Fangorn 15th Apr '13 2 of 7

As an aside, if you use MoneyAM for live streaming prices, as I do, then my friend MrContrarian has come up with a really neat innovation that lets you view twice as many share prices on one page, by presenting it in two panes. I find it very useful indeed, especially on a smaller screen, the URL to use this is:

Many thanks to MrC for sharing that useful facility with others.

Now that is a great little bit of coding. Thanks for bringing it to my attention.

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Paul Scott 15th Apr '13 3 of 7

In reply to post #72487

Hi Funnymoney,
I don't know anything about the coding of how it works I'm afraid.
All I can say is that the chap who created it is a good personal friend, and someone I completely trust, hence why I mentioned it.
Cheers, Paul.

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kenobi 15th Apr '13 4 of 7


There is no need to be concerned about the moneyam thing, it is simply a page with a framset which has the moneyam page as the page in each of the frames, passwords etc are going only to moneyam. Its a simple but effictive method of presentation, the same thing can be done with different websites if you choose, so you might want to show 2 brokers quotes side by side, there isn't even any requirement for the actual page to be on the web anywhere, you can knock up a single page like this and save it to a local drive and have any number of these showing different views for different situations,
just shows how powerful some simple techniques can be,

anyone interested in doing this with other combinations of windows, let me know I'd be happy to help,

Cheers K

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kenobi 15th Apr '13 5 of 7

re gold, is this fall not due to speculation that cyprus will be forced to sell it's reserves of gold to help fund the additional amount required for the bailout ? If so this might be a temporary move, and perhaps present a buying opportunity ?

Although I add that I don't really know about trading gold, it does seem that with all the qe/money printing going on, surely the longterm view of the pound / dollar can't be too positive ? but it could just as well be that confidence is returning and people who have been heavily into gold are reducing their positions and taking their profits ?

gold is one of those things that is so hard to value, especially with the run up it's had since the financial crisis,


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Fangorn 15th Apr '13 6 of 7

I think it's more to do with the read across to other Southern European nations funding their bailouts with their gold - Italy 4th largest holder, with 400 tonnes? Thing is though, in any bailout, would the gold really be sold rather than tucked away in the Bundebank vaults with paper currency issued in its stead.

I'd personally be of the view that what we've seen in Cyprus sets a bad precedent - state sanctioned theft of people's savings.That in itself should encourage people to buy an asset which is not readily available for easy confiscation. Banks not opening, restricted to small cash point withdrawals.

And all for a politically driven ideology that the Euro ideal must not fail - given the hardship being forced upon citizens of southern europe it already has.

So sitting here somewhat bemused at the massive gold sell off. - Just how many stops are being smashed,and just how many market participants are playing on margin these days?

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jonesj 15th Apr '13 7 of 7

Money printing has been going on for some years now. Surely with gold, some of the money printing effects are already in the gold price ?
So it's a matter of what is a fair price for gold considering the current know how on QE.

Not an area of expertise for me either, unfortunately.

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »


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