Small Cap Value Report (2 Apr 2015) - KOOV, FBT, RNWH, TFW, MTEC, SGI

2nd Apr '15 by Paul Scott

11 comments 36863 reads

Good morning! I had a second wind again last night, and added comments on James Latham (LON:LTHM), Accsys Technologies (LON:AXS), and the takeover bid for Nationwide Accident Repair Services (LON:NARS). So to recap on yesterday's full report, please click this link. As you've probably already gathered, I'm more of an evening than a morning person!

Mello Workshop

Many of you know David Stredder ("Carmensfella"), a highly successful small caps investor, and creator of the Mello investor events. These are going from strength to strength, and after the tremendous success of the 3-day event in Derby last year, we are rapidly approaching the next event, which is a slightly different format, and will be held in Peterborough, on Thu 23 & Fri 24 April 2015.

The format this time focuses on investor workshops, run by experienced investors, on many interesting themes, such as "hidden nasties on the balance sheet and how to spot them", "how to use spread betting to your advantage", and many others. It should be another excellent event, of interest to investors from beginners to experts, and tickets are selling fast, so I do urge you to come along if you can. I'll be there for the two days, and am having my arm twisted to do a couple of sessions - one on balance sheets, and one on my (disastrous) experiences in 2008 from being geared up in illiquid stocks during the financial crisis. So hopefully people can learn from me what not to do with spread betting accounts, since I learned the hard way unfortunately.

There will also be about 20 or more interesting smaller caps - David hand-picks the companies at these events, and refreshingly, doesn't waste your time with dodgy junior resources stocks!

More info & sign up links are here.

STOP PRESS! Mello have kindly given us a special discount code! So if you enter this code in the box at the top of the booking form, you'll get a discount: STOCKDISC

Koovs (LON:KOOV)

Share price: 65p (down 45% today)
No. shares: 24.1m
Market Cap: £15.7m

Trading update - the market is seriously unimpressed with this update, with the shares down 45% this morning. Growth for the year ended 31…

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Thegrimester

2nd Apr '15

Hi Paul,

This isn't on the Paul Scott's Small Cap Value Report page

Paul Scott

Hi Grimester,

Thanks for flagging up - I have now corrected it, so the article should now appear correctly in the SCVR home page.

Regards, Paul.

janebolacha

The Thorpe acquisition perhaps also makes sense in the context of the present €/£ exchange rate being likely to handicap exports from UK to the eurozone countries and, conversely, give eurozone exporters a great advantage. UK companies ought, imo, to be thinking of using cash surpluses to buy up competitors in the eurozone countries, taking advantage of the present euro weakness, thus both giving them some protection for their UK manufacture and providing a more competitive eurozone base from which to export.

Hi Jane,

As usual from you, that's an excellent point, well made.

Thanks, Paul.

Georgina Raeburn

Re the Mello Workshop Event, if you purchase a ticket using code STOCKDISC you will receive a discount on the cost of general admission.

carmensfella

We are now nearly completely full on our quota of companies that we can fit into the event and can possibly squeeze in a couple on the Thursday and about four on the Friday. If you have a favourite good quality and profitable company that you think needs to raise its profile then why not invite them and contact me to see what we can do to get them in front of 500 serious investors ? We will release our next group of company names in the week after Easter but the first fifteen are listed below...

Quarto (QRT)
Ideagen (IDEA)
Creightons (CRL)
City Fibre (CFHL)
K3 Business Tech (KBT)
Tristel (TSTL)
Avation (AVAP)
Peel Hotels (PHO)
Wynnstay (WYN)
Accesso (ACSO)
Crawshaws (CRAW)
Plastics Capital (PLA)
Pressure Technologies (PRES)
IG Group (IGG)
Ergomed (ERGO).

A nudge on tickets for the event... Don't delay, buy your ticket today!

Admission and 'Gold' tickets have been selling fast and we are already 30% ahead of same stage sales compared with our Derby event last year and we cannot increase capacity beyond 500. Each workshop will have limited numbers of places available and we know some will be incredibly popular when available to book. At some point we may have to close the door on sales of tickets so do NOT leave it too late !

David

Paul, thank you.

On SGI, it's the second consecutive year their results disappoint.

A year ago, they also said this:

"The work to create a global online collectibles trading platform is progressing well and the Group is targeting the launch of the Stanley Gibbons branded online marketplace in the second half of 2014 - testing on core functionality to begin in April 2014"

Yet now they say this:

"Our online technical development projects, which are focused on launching a global collectibles online trading platform, have progressed in line with plan in the second half of the financial year. The "hard launch" of the new website is scheduled for launch in May 2015, slightly behind our original scheduled date of March 2015."

They are way behind with this and it seems to have slipped repeatedly.

Red flags, perhaps.

Glaws2

RNWH - the trading update stated "in line with board expectations" as oppose to "market expectations" (the phrase they used in September). I rang the FD to enquire why and its because there are no published broker forecasts for the interims.

I also raised with him the balance sheet weakness and he was quite vehement that this was not the case and that people (gulp) simply didn't understand it properly. For example he noted that customer up front payments were not large - £3.5m as stated in the Annual report.

I'm sure the issues lie in the £80m of accruals and deferred income that are incorporated in the trade payables figures. I wasn't able to take the conversation any further as a) I'm not an accountant and don't have detailed balance sheet knowledge and b) I'm not as clever as Paul.

ExpectingValue

Great line-up, David

dasv

RNWH "They should fix it whilst the sun is shining, in my opinion." Very well put.

That is only the first fifteen companies....we have space for about 26 and there will be nine presenting each day so lots of options for those attending the event each day....you can wander around and meet the companies at their stands, you can watch them present for 45 minutes with Q&A or you can attend a choice of three workshops every 45 minutes. It is going to be very buzzy and great for networking with other investors. Please book early and especially the hotel if staying over on the Thursday evening.

Small Cap Value Report (2 Apr 2015) - KOOV, FBT, RNWH, TFW, MTEC, SGI

Mello Workshop

Koovs (LON:KOOV)

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Paul Scott

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