Small Cap Value Report (25 May 2017 - Part 2) - DODS, VANL, GTLY, CLG

25th May '17 by Graham Neary

14 comments 8244 reads

Good afternoon!

Since there were quite a few announcements over the past few days, I'm going to add a few on those which haven't been covered yet.

Paul produced a huge numbers of comments in a Part 1 report this morning at this link:

Fevertree Drinks (LON:FEVR)
Revolution Bars (LON:RBG)
Elegant Hotels (LON:EHG)
Belvoir Lettings (LON:BLV)
Minds + Machines (LON:MMX)
Henry Boot (LON:BOOT)
Flowtech Fluidpower (LON:FLO)
Redx Pharma (LON:REDX)

Please let me know anything we've missed, and I'll include a comment (preferably small-caps).

Cheers

Graham

Dods (LON:DODS)

Share price: 12.125p (-8%)
No. shares: 341 million
Market Cap: £41 million

Final Results

This is a media business providing data, events, research and training, focusing on political and public policy matters.

It's a big turnaround story - after many years of losses or marginal profitability, it swung back to a decent profit result last year.

The momentum has continued this year (ending March 2017), with a further improvement in PBT to £1.6 million (from £1.1 million).

Looking at the Director backgrounds: the current CEO is said to have gained considerable internal influence in 2013, and was subsequently promoted to his current position in August 2016. He has been at Dods since 2001, but appears to deserve particular credit for the turnaround.

But for what it's worth, the Dods share price does remain considerably below it's pre-Great Recession levels.

But things are looking up now:

The Group's operations generated £3.4 million of cash during the fiscal year. Continuous improvement in back office procedures, a decrease in days sales outstanding from 37 days to 32 days and diligent management focus all contributed to cash generation. The Group used £3.1 million in investing activities during the year of which £2.5 million was used for the build-out, furnishings and equipment related to the relocation of Dods' registered office and headquarters into new premises at The Shard in London Bridge Quarter.

It's a shame that free…

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BH1991

25th May '17

Hi Graham,

"Please let me know anything we've missed, and I'll include a comment (preferably small-caps)."

Gateley Holdings (LON:GTLY) released an trading update this morning - sounds positive!

Graham Neary

Ok, I'm on it! Thanks BH

tabhair

Any thoughts of £DX obviously a total car crash, but it was covered by Paul here frequently enough and is interesting at very least..

Ramridge

Graham - I wonder if you could look at Clipper Logistics (LON:CLG) which today announced the acquisition of Tesam.
The consideration paid is £12m but the company has £3.4m cash and a freehold which CLG are saying will be sold forthwith for £2.7m. So that makes CLG are paying cash adjusted only £5.9m for the acquisition.
Tesam has been profit making for a number of years and the last audited net profit was £1.5m There is no debt. So they are buying on a cash adjusted multiple of only 4. ( I looked up their company accounts in Companies House)
Revenue is £20m and P/S comes to 0.6
Clipper's net profit was £11m. So a £1,5m contribution form the acquisition is 13.6% . Not small by any account.

The one negative is that CLG is on a high PE of 32 , but eps growth rate is 22% and ROCE is 40% .

Thanks, Ram

FREng

Van Elle Holdings (LON:VANL) has managed to recover to above its IPO price, having stumbled in Q3. There has been no further mention of the contingent liability. The short series of RNS since IPO are worth reading. I wonder why the insiders have bought such tiny volumes of shares.

simonty

Dodds is the old Huveaux which was a complete dog. It is also a vehicle for Lord Ashcroft.

Covered it, cheers Ram

Hi tabhair, maybe next time it has results or an update? cheers

Many thanks, Graham

Howard Marx

Charlie Munger often uses the phrase "invert, always invert", to emphasise a thorough appraisal.

If Clipper Logistics can buy an aligned business for a multiple of 4x, maybe this shines a light on the appropriate valuation for companies exposed to the business of contract logistics.

Maybe 4x IS cheap. Perhaps the 10x p/e of Wincanton is more appropriate. But the 27x earnings rating for Clipper appears excessive.

ricky65

Sorry wrong button!

For me DX (Group) (LON:DX.) is a complete bargepole. I had a go catching the falling knife last year thinking the problems were fixable and, as often the case catching falling knives, I got burned. Lesson learned! The share price is down 92% from the IPO which tells me that management are massively incompetent.

26th May '17

Volvere (LON:VLE) today please, Graham.

Redrichmond

7th Jul '17

GATELY HOLDINGS PLC

Looking at the chart and comparing rises on or just before a news release. You can make up your mind on Tues 11th July 2017. But my guess is 12-15p upward climb or more.. Easy money :)

Law is the future with the £500-£700 per hr corporate layers having to rewrite post brexit business contracts etc.. Lots and lots works for them

RESULTS releases and how the price went up in ALL but 1 release they have ever done

25th May 2017 - 161p increased to 195p up 34p (17.4%)
6th Dec 2016 - 109p increased to 130p up 21p (16.1%)
19 July 2016 - 95p increased to 120p up 25p (20.8%)
19th May 2016 - 103p increased to 107p up 4p (3.7%)
16th Nov 2015 - 103p increased to 105p up 2p (1.9%)

3rd Nov (approx 2 weeks before a release on 16th No 2015 it jumped up 8.6%)95p increased to 109.50p up 9.5p

Only time it has been down since float in over 2 years was for a release on 15Sep 2015 where it went from 101p-97p down 4p (nearly 4% down)

Small Cap Value Report (25 May 2017 - Part 2) - DODS, VANL, GTLY, CLG

Dods (LON:DODS)

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Graham Neary

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