Small Cap Value Report (25 Sep 2014) - TMMG, HYNS, TMZ

Thursday, Sep 25 2014 by

Good morning! A quick, and early report today, as I have a packed diary of meetings in London today! So I really hope just for once, the train will be on time.

Regenersis (LON:RGS)

I listened to the Webinar yesterday, and it struck me that the sell-off in these shares seemed overdone, so I bought a few as a trading punt at about 221p. Lucky timing, as the price rose nicely into the close yesterday afternoon.

An announcement this morning states that two Directors have bought shares. The FD bought 12,500 shares at 235p (splashing out £29k), but Hanover Investors (connected with two other Directors) bought a more meaningful 212,000 shares also at 235p (costing £498k). So two Directors spending £527k is a decent sized signal of confidence in my opinion, and I expect the share price will continue recovering today on the back of this news.

(Note that Hanover banked £17.5m by selling shares at 300p in Jan 2014!)

Mission Marketing (LON:TMMG)

Interim results to 30 Jun 2014 are issued this morning and look alright.

Headline operating profit is up 3% to £2.1m.

The Balance Sheet here is my main concern, as it is negative once you write off intangible assets. However, net debt has come down to £7.3m, although as the company states in the narrative today, H1 tends to see a stronger cash inflow than H2. I recall a meeting with the FD last year, when he explained that debt was under control again after a difficult patch, and that looks about right to me.

Outlook - positive, but they've given themself some wiggle room in case anything goes wrong in H2!

Our financial performance remains solid. As in previous years, our second half weighting creates challenges ahead but, as we stand, we are confident that our business remains on track to deliver against our year-end expectations.

Valuation - it looks good value on a PER basis, but once you adjust for net debt, the valuation increases to a level that I think looks about right, maybe slightly on the cheap side? Note that the quality measures are on the low side, so it should be on a relatively cheap valuation:


Dividends - the yield is nothing to write home about, and there are better yields in this sector, e.g. Creston

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The Mission Marketing Group plc (the mission) is a United Kingdom-based marketing communications and advertising company. The Company's portfolio comprises integrated, multi-discipline, multi-sector agencies, specialists in specific marketing/communications activities and specialists in particular market sectors. The Company's segments include Branding, Advertising and Digital; Media; Events and Learning, and Public Relations. The mission includes a network of entrepreneurial marketing communications agencies in approximately 20 offices in the United Kingdom, as well as offices in Asia and San Francisco. Its subsidiaries include April Six Ltd, which is engaged in marketing communications and specializes in the technology sector; Big Dog Agency Ltd, which is engaged in Marketing communications, Speed Communications Agency Ltd, which is engaged in public relations, and Bray Leino Ltd, which is engaged in advertising, media buying, digital marketing, events and training, among others. more »

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Haynes Publishing Group P.L.C. is a United Kingdom-based company, which creates and supplies practical and informative content to consumers and professional mechanics in print and digital formats. The Company operates through two geographical segments: UK & Europe, and North America & Australia. The UK & Europe segment has subsidiaries in the Netherlands and Italy, among others. Its core business is the publication and supply of automotive repair and technical information to the professional automotive and do it yourself (DIY) aftermarkets in both a print and digital format. The North America & Australia segment publishes DIY repair manuals for cars and motorcycles in both a print and digital format. It publishes titles under the Haynes, Chilton and Clymer brands, in both English and Spanish. It has a branch operation in Sydney, Australia, which publishes various products under both the Haynes and Gregory's brands. Its consumer content is delivered via both print and digital channels. more »

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Frontier Smart Technologies Group Limited, formerly Toumaz Limited, is engaged in offering software and hardware technologies for Digital Audio devices. The Company through its division, Frontier Silicon, provides solutions for Digital Radio and Smart Audio devices. The Company is engaged in providing chips, modules and software for consumer audio devices. The Company offers fourth generation Kino 4 chip. The Company's smart audio module is Minuet, which offers hardware, software and services solution for the smart audio device. Its digital radio modules include Verona 2, Tuscany Bluetooth/digital radio and Verona HD Radio. Its digital radio platforms include Venus, Venus Colour, Neptune (Tuscany Platform), Venus H2 and Venus HD. Its digital radio software includes DAB and AUTODAB 2.0. The Company also offers Chorus 3 chips. Its Venice 6.5 FS2026-5 module is a hardware and software solution for Internet radio and network streaming. more »

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

5 Comments on this Article show/hide all

narp 25th Sep '14 1 of 5

Continuing yesterday's discussion on Tesco, Sports Direct have taken a stand:

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kenobi 25th Sep '14 2 of 5

not sure I share your confidence re Hayes myself, firstly new cars are much harder to work on, so there is much less that an enthusiastic youngster can do (I appreciate that young people buy 7-10 year old cars, but even going back to that age there's a lot more, plug it into the diagnostics machine to find the problem required),

Secondly, I'm imagining that they'll download the book electronically, and then print off the few pages they need. Having done that, it will only take one person to crack it somehow and share it on bit torrent for sales to fall through the floor.

It would be really sad if this happens, if because people steal their books electronically, they are forced to stop publishing them, but that isn't really a factor in whether it will happen.

However they have a novelty range, the baby one, the starship enterpise one etc, which I guess is immune to this kind of piracy as it's generally bought as gifts. I have no idea what proportion of their business these products represent, but they could re invent themselves and grow this side of the business?

Having said all that, the decline may be slow, I would assume it has already started, but you say that the results are pretty good so maybe I'm wrong.

BTW I saw yesterday that trinity mirror have admitted to some counts of phone hacking, I guess the flood gates are about to open there, I recall you mentioning this as a risk when you got out of trinity some time back, good call,


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jonesj 25th Sep '14 3 of 5

I did hold Haynes for a while, but got more bearish about it & sold.
I do all my own car repairs and have a Haynes manual for my current vehicle.

Bear points:
1 The younger people are used to downloading information for free. Many of them would get advice on how to do a repair or the necessary torque wrench settings on forums etc.
2 Electronic publications may be cracked or shared for free on forums. As stated in previous post.
3 I suspect their range of vehicle manuals is shrinking. e.g. Manuals for 306, 307 but not the 308 (launched 2007)
4 Mechanical parts have become more reliable, requiring fewer repairs. Additional electronic parts are fitted to cars, so there is more to go wrong on those. However, anyone doing their own electrical repairs may well be relying on home diagnostic equipment purchased on e-bay.

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Paul Scott 26th Sep '14 4 of 5

In reply to post #86451

Hi Kenobi,


I knew that TNI had hacked phones, because I made extensive enquiries at the time, through journalist friends, so me being paranoid about them hacking phones wasn't a misplaced paranoia, it was based on hard facts! So bloody annoying that I sold my TNI shares at whatever, 60p-ish, only to see them soar to 200p+. Never mind.

You could argue that the market ignored the risk because it thought that Murdoch would take the blame, and TNI would somehow limbo under the bar, which seems to be what has happened.

A good example of being right, but it costing you money!

I'm increasingly coming to the view that being right or wrong in the long term doesn't really matter. You just have to learn how to ride waves of stock market sentiment up & down, based on what the market thinks is correct, even though the market might be completely wrong.



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kenobi 26th Sep '14 5 of 5

the question re the mirror is will Piers Morgan get caught ? It sounds like he was involved, how else can he explain having heard Heather Mills voice mail?

Still I suspect he has friends in high places and this might not be pushed.

shame you got out too soon, never mind, you probably did well on what you bought next anyway !

thanks for the column, really enjoy it, be lucky,


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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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