Small Cap Report (20 May) - NRR, ZZZ, TNG, ZYT

Pre 8 a.m. comments

Good morning! A fairly quiet morning for small cap announcements, so nothing earth-shattering to say before 8 a.m.

A share that is high on my watch list, but haven't yet hit the button to buy, is Newriver Retail (LON:NRR) - a property REIT with a fantastic dividend yield of around 8% (not well covered though). Although it sounds unattractive, having invested in secondary retail properties, management appear to be very energetic in driving value out of their properties, and their tenant mix is firmly value-orientated, hence not susceptible to competition from the internet, nor likely to see much of a downturn in trading if the economy worsens.

They announce that planning permission has been granted to extend and improve their shopping centre in Birmingham. Sounds positive, although no financial details are given.

 

Snoozebox Holdings (LON:ZZZ) has announced that the founder, Robert Breare has resigned, and left the company with immediate effect. He had already stepped down as CEO, but was going to continue in a business development role. Doesn't exactly inspire confidence for their refinancing which is underway - I'm keeping well clear, as this one's turning into a bit of a car crash, so whoever refinances it this time can pretty much name their price, which could be at a deep discount to the prevailing share price, who knows? I'm not going to take that risk, so will sit on the sidelines & watch.

It seems a good idea (shipping containers converted into temporary accommodation), but not very well executed. That said, no start-up is easy, so it's easy for armchair commentators to criticise.

 

 

Post 8 a.m. comments

My first impressions from looking at results for the year-ended 28 Feb 2013 from Tangent Communications (LON:TNG) are fairly positive.

I last commented on them here on 4 Mar, when I concluded that at 10p the shares looked pricey, being on a PER of 16 times forecast earnings of 0.62p. That was a good call, as the shares have since dropped sharply to 6.7p. Underlying EPS has come in a bit below forecast, at 0.56p, but the share price fall means that the PER is now a much more sensible 12 times.

If there is some reasonable growth in the pipeline, then that valuation could start to get interesting. Their Balance Sheet looks fine, even after writing off all the intangibles, and they have net cash of £2.64m. It pays a steady dividend, currently yielding about 3%.

The market cap of just over £18m looks reasonable. I'd need to do more research on it, but my initial review suggests that it looks interesting & is perhaps worthy of further research.

 

Stockopedia Webinar

Just a short plug for a "webinar" that Stockopedia are doing this week. Click on the screen shot below to go to that page. Looks really useful - how to make the most of Stockopedia, an online seminar, interactive with Q&A, etc.

 

 

Right, I'll leave it there for today. I've been rummaging through the morning's announcements, but really cannot find anything more of interest, in my field. Sorry about that!

Tomorrow it's results from Zytronic (LON:ZYT), which should be interesting, mainly to see how the outlook is, given that we already know the figures are going to be poor. I have a conference call with the CEO & FD late morning, so will report back in due course either later tomorrow, or on Weds morning.

In the meantime, have a good day, and see you same time tomorrow morning.

Regards, Paul.

(of the shares mentioned today, Paul has no long or short positions.

To emphasise, Paul does not hold any short positions at all in the market)