Small Cap Value Report (23 Dec 2013) - SAL, SSP

Monday, Dec 23 2013 by

Good morning! There was a positive-sounding contract wins accouncement from niche marketing company Spaceandpeople (LON:SAL) on Friday. This confirms my view that Spaceandpeople is on a roll, and should achieve about 10p undiluted EPS this year. Therefore at 134p the shares are priced at a fairly reasonable PER of 13.4, which is not an aggressive valuation for a good growth company.

It is interesting to note that their potential markets are much greater than just shopping centres. In this announcement the company mentions a new contract to manage space in 142 UK garden centres. This comes on top of previous announcements about railway stations. So there should be plenty of scope for SAL to continue growing market share in its main UK and German markets, with potential overseas expansion also a possibility. So I remain enthusiastic about this company.





Interim results from Solid State (LON:SSP) look to have slightly disappointed the market, at least in terms of its initial reaction - their shares are currently down 7.5p to 259p. Profit before tax has fallen from £732k to £564k, for the six months to 30 Sep 2013, compared with the equivalent prior year six-month period.

EPS dropped from 8.5p to 7.5p for the six months, although the outlook sounds encouraging, summarised here;


As in previous years, we expect the result for the year to be significantly second half weighted, which is supported by a record order book and strong enquiry levels. This order book strength underpins the Board's confidence in declaring an interim dividend of 2.75p.


A small (just over 1m shares) Placing at 240p has also been announced, to finance a bolt-on acquisition. It really is noteworthy how many fundraisings are going on at the moment, and the relative ease with which companies are obtaining financing. I can't see any reason why that would change any time soon, so let the good times roll. Although you would imagine that at some point investors appetite for fresh equity will be used up. No sign of us reaching that point yet. I suppose the warning signs might be when new issues start going to discounts - a lot of appetite for new issues must be coming from people who just think…

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SpaceandPeople plc is a United Kingdom-based media specialist company. The Company is engaged in marketing and selling of promotional and retail licensing space on behalf of shopping centers and other venues throughout the United Kingdom, Germany, France and India. The Company's segments include Promotional Sales, Retail, Head Office and Other. The Company markets, sells and administers promotional space in a range of footfall venues across the United Kingdom, including shopping centers, theme parks, garden centers, retail parks and airports. The Company offers a service covering from consultancy services to the provision and management of retail merchandising units in shopping centers. It enables venues to market, administer, promote and sell their promotional space. Its subsidiaries include MacPherson & Valentine Limited, SpaceandPeople GmbH, Retail Profile Holdings Limited, POP Retail Limited, Retail Profile GmbH, SpaceandPeople India Pvt Limited and S&P+ Limited. more »

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Solid State PLC is engaged in manufacturing of electronic equipment and distribution of electronic components and materials. The Company is a manufacturer and specialist design-in distributor to the electronics industry. Its segments are Distribution division and Manufacturing division. The distribution division comprises Solid State Supplies Limited and Ginsbury Electronics Limited. The manufacturing division includes Steatite Limited and Q-Par Angus Limited. Its geographical segments include UK and Non UK. The Company is a supplier of computing technologies, electronic components, antennas, microwave systems, secure communications systems and battery power solutions. It markets its products through brands, including ndura RUGGED and RZ Pressure. It acts as both a distributor to original equipment manufacturers (OEMs) and manufacturer of specialist units to clients with complex requirements. It serves aerospace, environmental, government, oil and gas, and transportation markets. more »

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  Is LON:SAL fundamentally strong or weak? Find out More »

18 Comments on this Article show/hide all

ericb 23rd Dec '13 1 of 18

Thought youd broken up on Friday already ;)

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Paul Scott 23rd Dec '13 2 of 18

In reply to post #80119

Hi Eric,

No, I don't take holidays during the year, so just have the occasional "duvet day" when little news is expected instead.

Regards, Paul.

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CliveBorg 23rd Dec '13 3 of 18

Re: Friday: "Sorry I'm late, went off the rails at the Elephant & Castle." (Only pub in London I've ever heard of that's also a tube station!) Merry Xmas all :)

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Gostevie 23rd Dec '13 4 of 18

In reply to post #80121

I'm sure there are plenty of pubs in London called The Victoria. Or how about the St Paul's Tavern? Any more since it's a quietish news day? :-)

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SteveM 23rd Dec '13 5 of 18

Have a great Christmas, Paul!


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Smudge 23rd Dec '13 6 of 18

I find your daily musings to be of great help and interest and thank you so much for for quality work you do. Have a well earned break and I wish you and your family a joyful Christmas and a healthy and succesful New Year.


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CliveBorg 23rd Dec '13 7 of 18

Interesting question Gostevie: There must be loads of pubs called the Royal Oak (Metropolitan line), and there used to be another similar one on the Northern line which caught fire, and is now known as Burnt Oak. My local supermarket sell a brew called Whitechapel and a cheap cooking sherry called Mansion House. Then there's Turnham Green, which I'm told serves a mean mint julip. Perry Vale's on the central line - pear cider obviously - and finally, surely the dodgiest pub in London: Spew Gardens. Sorry. What a strange combination of anorak chat and corny jokes this message has turned out to be. Think I'll go dahn the pub now, I need to drink to forget..

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Techno Trousers 23rd Dec '13 8 of 18

bitterly cold wastelands (!) of the a few stereotypes there, Paul?

Have a great Xmas and New Year, and I really appreciate all that you do and the manner in which you educate us all. You are a real treasure.


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Gostevie 23rd Dec '13 9 of 18

In reply to post #80126

Ha ha! I grew up in Perivale (Perry Vale) and ironically it doesn't boast a single pub!

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Michael Mariner 23rd Dec '13 10 of 18

Paul, thank you for your inspiring blog, a great Xmas and New Year to you and your family.

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RichardK 23rd Dec '13 11 of 18

By wastelands I presume you mean Lancashire?

Richard of York

Thanks for your valuable contributions and have a god break.

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Fangorn 23rd Dec '13 12 of 18

Indeed. Seconded. Superb informative blog PP - really enjoyed reading it and is my first port of call,each morning, for an insight into small caps.

Have a great Christmas...

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it_trader 23rd Dec '13 13 of 18

I should report you Richard of York for racism!!

It_Trader, the wastelands of Preston ;)

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Paul Scott 23rd Dec '13 14 of 18

Thanks for the kind messages, much appreciated.
I made it to the windswept, rainy, battered, besieged enclave of Crewe, so can relax now for a few days!

Cheers, Paul.

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garbetklb 23rd Dec '13 15 of 18

Hi Paul
Not as windswept & rainy & snowy as the West Highlands, I bet! And as for north.......
Hope you have a great & relaxing Christmas & New Year.
Thanks for such an informative, open & well written series of morning articles.
Andy (InTheHighlands)

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nicktudor 23rd Dec '13 16 of 18

Best wishes for the Xmas period Paul.
Appreciate all your efforts with the blog, provides a great starting point for investment ideas so thanks again and have a very merry (hic !) festive period.


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iwright7 23rd Dec '13 17 of 18


Thanks for the last year's insight. Yours is a great blog for pointing out red flags for companies that are more story than substance. Have a great break.


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genghis khan 23rd Dec '13 18 of 18

Best wishes Paul to you and your family,for Christmas and New Year!
I always find your articles very incisive and thought provoking,providing an ideal springboard for further research.
Is it possible you can recommend a book on analyzing the basics of company accounts,but for the absolute beginner?



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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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