Small Cap Report (29 Apr) - SPRP, RIC, CAMB, BRY, WOR

Monday, Apr 29 2013 by

Pre 8 a.m. comments

Good morning. There are lots of trading and results statements issued this morning, but most are either resources sector, or large caps, so not a great deal for me to cover today.

There is a 90p cash offer for Sprue Aegis (OFEX:SPRP), an ISDX-Listed company which is the market leader is fire detection devices. Pity, as I looked at these shares recently, when they were around 60p and thought they looked cheap.

It looks like an existing 29.9% shareholder is bidding for the rest of the company, and it looks a bit messy - the Board of Sprue Aegis has not recommended the bid, and there seem to be a couple of thinly veiled threats in the narrative from the bidder, concerning liquidity, and what would happen if the bid is not accepted. If I were a shareholder, this announcement would very much raise my hackles & I'd be inclined to tell them to stuff it. There's nothing worse than a takeover offer with threats - that just means that the bidder is under-paying for it, in my opinion.


I was impressed with results last week from small restaurant group Tasty (LON:TAST). This morning another small restaurant group, Richoux (LON:RIC) has also impressed with some excellent-looking headline figures. Turnover is up 10% to almost £10m, and operating profit before one-offs looks to be around £750k, so that's a fairly respectable profit margin for a small operation. Solid balance sheet too, so they are well placed to open new outlets - and now is the time to be expanding, as such good deals are available on leasehold property right now. Bizarrely, despite operating only 14 restaurants, Richoux has no less than 4 different brands.

At a £10.6m market cap, it looks pretty good value, so worth a further look I think. If there's a convincing roll-out story here, then money could be made potentially.


Post 8 a.m. comments

Interims from Cambria Automobiles (LON:CAMB) are a reminder that there's not really much profit margin to be made in this sector, about 1%. 


Brady (LON:BRY) is starting to look potentially interesting. The shares have looked rather expensive to me in…

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Fireangel Safety Technology Group plc, formerly Sprue Aegis plc, is engaged in the business of design, sale and marketing of smoke and carbon monoxide (CO) detectors and accessories. The Company also operates its own CO sensor manufacturing facility in Canada. The Company is also a provider of home safety products. The Company's principal products include smoke alarms and CO alarms and accessories. Sprue manufactures CO sensors for use in all its CO alarms. Sprue serves in the United Kingdom retail and the United Kingdom's fire and rescue services. The Company offers a range of brands, including FireAngel, AngelEye, Pace Sensors, First Alert, SONA, BRK and Dicon brands. The Company's subsidiaries include Sprue Safety Products Limited, which is engaged in distribution of smoke and CO alarms, and Pace Sensors Limited, which is a manufacturer of CO sensors. more »

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Richoux Group plc is a restaurant company. The Company operates over 20 restaurants in the areas of central London under the brand names, including Richoux, Dean's Diner and Villagio. The Company's business segments include Richoux, Dean's Diner and Villagio. The Company has approximately eight Dean's Diner restaurants in Chatham, Port Solent, Braintree, Fareham, Bicester, Trowbridge and Hempstead Valley. The Company has over seven Villagio restaurants in Andover, Basildon, Hammersmith, Chislehurst, Chatham, the rebranded restaurant in Port Solent and a restaurant in High Wycombe. The Company also has an Italian restaurant trading as Zippers Bar, Restaurant and Grill in Chatham. It has over five Richoux restaurants in Knightsbridge, Mayfair, Piccadilly and St John's Wood and a restaurant in Gloucester Arcade off Gloucester Road in London. Dean's Diner is a classic American diner, which offers burgers, shakes and fries. more »

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Cambria Automobiles plc is a motor dealer, which is engaged in the sale and servicing of motor vehicles. The Company is engaged in the provision of car vehicle sales, vehicle servicing and related services. It is a retailer of new and used cars, commercial vehicles and motorbikes. It operates on a dealership-by-dealership basis. It operates from approximately 30 sites with a total of over 50 dealer franchises. It operates dealerships across England, from the North West through the Midlands, down to Kent in the Southeast and across Exeter in the South West, trading under local brand names, such as Dees, Doves, Grange, Invicta, Motorparks and Pure Triumph. Its brand portfolio comprises Abarth, Alfa Romeo, Aston Martin, Dacia, Ford, Fiat, Honda, Jaguar, Jeep, Land Rover, Mazda, Nissan, Renault, Seat, Triumph, Vauxhall and Volvo. It also provides ancillary services. It offers finance and insurance for the execution of the transaction along with service plans to maintain the vehicle. more »

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7 Comments on this Article show/hide all

PhilH 29th Apr '13 1 of 7

Hi Paul,

Thanks for the information regarding the Sprue Aegis (OFEX:SPRP) offer.
As a holder I was hoping for more.
Please can you post a link to the offer?
Why hasn't that appeared on their RNS feed?

Thanks in advance

Professional Services: Sunflower Counselling
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Edward Croft 29th Apr '13 2 of 7

In reply to post #72875

Good work holding Sprue Aegis Phil. Funnily enough Sprue Aegis has been being ranked 99/100 on the Stockopedia composite rank system (second best in the whole system) - have a look at the list here -

We have been getting great feedback about the rankings - have to find a way to incorporate them on the stock reports-

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BrianGeee 29th Apr '13 3 of 7

Response just out by Sprue, in which "shareholders are strongly advised to take no action and not sell their shares in the market."
Very unusual direct advice from a company.

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PhilH 29th Apr '13 4 of 7

What's required now is another suitor!

Professional Services: Sunflower Counselling
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Fegger 30th Apr '13 5 of 7

Thanks for flagging World Careers Network. I will keep an eye on it but there are very few shares in free float. The founder has 70% and there are ony 18% in free float. Nevertheless it is interesting and if more are sold off it could become an interesting prospect.

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Paul Scott 30th Apr '13 6 of 7

In reply to post #72917

Hi Fegger,

Well spotted - a friend emailed me yesterday to say that the problem with World Careers Network (LON:WOR) is that 3 people with the surname Hipps together hold 83% of the shares! A further 10.7% are held by Liontrust, 1% by another Director, so that only leaves 5% of the shares in free float!

So for a £14m market cap company, you wonder why on earth they have a stock market listing? Seems pointless, and I couldn't invest in anything where minority shareholders are completely at the mercy of such a dominant key shareholder. They could do anything they like!

Regards, Paul.

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dangersimpson 30th Apr '13 7 of 7

World Careers Network (LON:WOR) has come up a few times on my screens and however good it looks on the numbers buying something that has almost zero liquidity and a spread that is quoted as 150-215 is a waste of time. As you say why on earth do they bother having a stock market listing - with net cash they don't need access to capital markets and the costs and hassle of a listing make this a waste of time for all concerned.

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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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