Small Cap Value Report (1 Sep) - RFX, AVG, EMAN, VTU, SAT

1st Sep '17 by Graham Neary

39 comments 16976 reads

Good morning folks,

A couple of updates today and possibly I will return to something we missed from yesterday.

Thanks,

Graham

Ramsdens Holdings (LON:RFX)

Share price: 163p (+14%)
No. of shares: 30.8 million
Market cap: £50 million

Trading Update

This pawnbroking/financial services chain is guiding for results significantly ahead of market expectations.

Ramsdens Holdings PLC, the diversified financial services provider and retailer, is pleased to announce that the strong foreign exchange results in the early summer months gained additional momentum through the traditional peak period of July and August. In addition, the Group is benefiting from its jewellery retail initiatives and these, along with the continued strong gold price, has helped the precious metals buying and pawnbroking segments.

I've suspected for a while that the foreign exchange market is rather uncompetitive (possibly due to customers not being interested enough to try to get the best rates). Well done to Ramsdens for making headway in this segment.

The other factors cited, jewellery retail and the price of gold, are also very relevant for H & T (LON:HAT) (in which I continue to hold a long position).

I think the sector as a whole is primed to do very well. Their jewellery retailing activities offer people bargains on high-end items, and so should be robust regardless of overall consumer sentiment. But the financial services side, especially pawnbroking and personal loans, is counter-cyclical versus the rest of the high street.

Ramsdens shares aren't the apparent bargain they were at IPO any more, and my instinctive scepticism toward new issues has cost me a bit here in terms of missing out on the opportunity!

Since forecasts will need to be updated for today's guidance, the shares aren't particularly expensive now either:

Avingtrans (LON:AVG)

Share price: 256p (unch.)
No. of shares: 30.7 million
Market cap: £79 million

Completion of acquisition

It's easy to make a mistake calculating the market cap here, as the number of shares outstanding has increased by 11.5 million, and these have only been admitted to trading today.

This was a reverse takeover such that shareholders in the target (£HAYT) now own nearly 38% of the combined…

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Wimbledonsprinter

1st Sep '17

I have used Barclays Stockbrokers and have been very happy (if you don't want to trade non-UK stocks). But this week, they have switched me (and many of their clients) over to their new Smart Investor platform, which from my initial impression is a significant move in the wrong direction (and I would not recommend it). It also got panned in the Evening Standard city pages yesterday.

mrosbiston

one name to look for is degiro - https://www.degiro.co.uk/

cheap trade costs, however execution isn't the best - often at the spread and pricing is delayed (pay extra for real-time). They offer AIM, but due to execution is probably better for more liquid names.

I do know that they plan to offer an ISA account at some point this year.

Any views on what the execution (particularly small caps) is like with XO?? - considering opening a second ISA.

Rusty2

You are not alone it seems, on Citywire forum there are many not very happy BS users.

GavinT

I use Svs XO @ £7.5 per trade - no complaints on execution but they don't always offer LSE/Aim shares not quoted in GBP. So previously I was unable to buy both Taptica and Quarto which was annoying as Taptica did subsequently very well...

Samsgrandad

I also use x-o for my ISA. They have a very good dealing charge and no custody charge. Their other charges are reasonable but have a read yourself and get a quote for things like bed and isa, they obviously have to make a living somehow and best if you don't get a surprise.

willhampson

Hi, I find the execution with XO to be absolutely fine; its the usual 15 seconds quote to click buy. Spread seems comparable with my other broker (Charles Stanley). The website is fairly basic in terms of features but perfectly easy to navigate. I've also found them to be fairly helpful on the phone, which I wasn't expecting given that its on the budget end; they even managed to get me a good reduction on the spread at one point when I was having difficulty purchasing a stock online a few months back. If starting from scratch, I would have no issue using them for my ISA as well.

I should also add that I'm yet to see any restriction on purchases of AIM stocks. I have both Somero and Taptica in my account; the former just required me to complete an W-8BEN form (as was the same for CS). I find it cheap and cheerful at £5.95 p/trade.

JonBirdy

I've only ever used x-o for both a nominee account and my ISA. I chose them on price as they were the cheapest at the time. I like their no frills website. I have no complaints.

Viz

Perhaps this is a growing trend - premium vs discounters. There was a recent discussion about David Lloyd vs GYM but this could be read across all sectors? Waitrose vs Lidl, Fevertree vs Schweppes, joules vs Primark et al? I see those in the middle getting squeezed and consumers will choose to either go bargain basement or premium (I type this whilst I'm in a cheap holiday park in Weston super mare, drinking La Bourdonnaisse rum I picked up on a recent trip to Mauritius)...

bwakem

The data displayed for Vertu Motors (LON:VTU) is all wrong. Current price is 44p not 141.5p. Market cap is £171m not £519m.

Wol

Hi Wimbledonsprinter
Re: Barclays Smart Investor
What is it you don't like about the new site? I'd be interested to hear.
Barclays made a mess of transferring me over to the new site. I think the main problem was that I am an ex Barclays Bank customer. To log in to Smart Investor, Barclays gave me my old Banking ID. So when I tried to log in I was rejected because I had already transferred out (of the banking service, but not the Stockbrokers). They have now sent me a new passcode by post, which means that I will have to wait until the new code arrives before getting access to my accounts. In the meantime I have to deal over the phone. A complete mess.
Having said that, I want to give Barclays the benefit of the doubt for now at least because:
* telephone support are always sensible and helpful
* the 15 second price quote often gave me a price well within the spread. I don't know to want extent other brokers give a similar beneficial price
* the new prices look good to me - the reduced dealing charge with a lowish percentage charge will be good for me as I deal quite often
* transferring a SIPP, ISA and dealing Account is going to be a pain in the donkey
If I do move, AJ Bell Youinvest would be my most likely choice. They have always given me decent service.

Graham Neary

Fixed it, cheers

Herbie47 (post 22) gives a very useful reference to the Citywire forum. Looking at the forum, I think I have come off lightly - there is a mass of complaints there.

I can access my account and can trade. But the system has become very clunky, it is easy to get logged out, a lot of the previous info is no longer available nor exportable. I am not clear how I keep up with CGT liabilities now. I agree the price offered before was often inside the spread - I have traded twice this week both through limit orders on an illiquid stock (so not enough to form any judgement) but the fill was exactly on the limit. But all this and costs going up.

I am looking to move now - but not urgently. Will open up another account(s) first and try them out.

peterg

Hi JulianH,

Barclays seem to have had a lot of problems with B Stockbrokers customers who also had links, but not existing accounts, with B Bank. I got stuck as I used to have powers of attorney for my parents, who banked at Barclays, and so the Bank had my old address. Stockbrokers had my current address and communicate with me with no problem. I was sent my new "membership number" correctly, but no passcode, sent 3 times. Finally someone realised the problem (and I'm pretty sure she had seen something similar several times before) and checked my records with the Bank, and found they had a different (wrong) address even though I have no account, and so had never thought to tell them I'd moved years ago.

Now I'm finally in I think it will do what I need OK - once they've sorted out the excess number of toothing problems, but I'm left with the feeling that I'll be paying higher fees and gone through this mess for what? Nothing of any advantage to me that I can see. It's a classic example of if it ain't broke don't fix it. I suspect it will cost them a lot of customers, and I doubt the new increased fee structure will compensate for that. In practice I'll certainly stay for a while. If they can get it working OK it will do what I need, and the hassle of moving accounts really won't be justified, but any loyalty and satisfaction I may have felt towards them after about 20 years with Schwab/Barclays has been used up.

Peter

Hot Socks

thanks for all the helpful steers on platforms - like some others I have been on Barclays Stockbrokers and got moved to Smart Investor and I'm not keen on the new website which is what triggered me to look around at what else is available.

OsullivanB

Thank you for the Sat Sol review. Much appreciated.

iwright7

2nd Sep '17

For anyone interested in further Ramsdens Holdings (LON:RFX) info, there is a lot more background in their recent admission document:

http://www.ramsdensplc.com/investor-relations/disclaimer-country

Looks like growth is coming from a wide span of pawnbroker related services, pushing up sales and therefore profit/store. Their house broker is suggesting 30% CAGR adjusted PBT to 2019. The business is H2 (Xmas) weighted and still looks good value to me, so brought an opening position yesterday. Please though DYOR. Ian

TIBARRETT07

I have used the new Everyman cinema in SUA several times since it opened and the experience is excellent relative to the big players in the market. They will most certainly retain my business.

I do have a couple of concerns from an investment perspective:

Firstly, a large part of the experience is the quality of furnishings. I would imagine that in order to retain such attraction refurbishment capex will be relatively high. The company does not appear to release a breakdown of capex between new sites and refurbishment unfortunately and it could well be that EBITDA is not a good indicator of cash generation as a large part of D repeats to sustain existing trade. As a side the average ticket price premium relative to others doesn't appear to support the quality offering and associated cost.

Secondly, the amount of related party transactions. It appears the norm for the directors to acquire the freehold for sites and to lease such back to the company on long leaseholds, presumably a form of arbitrage benefitting the directors involved...I'd rather management left value for all shareholders....

Ted Johnson

3rd Sep '17

I have also been with Barclays Stockbrokers since they took over Schwab and up until now been very happy with their service. When I logged into smart investor I couldn't believe that they had altered so much and in the process lost so many of the good aspects of the previous product. I think that whoever designed the new system did not give any real thought to all the clients who were already using the product and started from scratch to produce a system that works for them and not for the user. I worked for decades in IT systems and I can definitely say that these developers took the totally wrong approach.
Although I aim to convey the problems to Barclays I am not sure that they will incorporate some the old features to make the system better. I was already somewhat annoyed with an account charges going from £36 a year up to £200 but may have put up with that if the service had got even better which is what you expect from an UPGRADE. I could also be looking to move to another provider.

Sniggolb

4th Sep '17

Graham

If you charged for your newsletter I would buy it (I am sure it is very good)
I never take free stuff seriously

Just thought you should know

Tom.

Small Cap Value Report (1 Sep) - RFX, AVG, EMAN, VTU, SAT

Ramsdens Holdings (LON:RFX)

Avingtrans (LON:AVG)

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Graham Neary

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