Small Cap Value Report (28 Nov 2014) - CFYN, ODX

Friday, Nov 28 2014 by
13

Good afternoon! My last report of the week, and the last one from Las Vegas. I was out & about again last night, having a Thanksgiving turkey dinner, and playing on machines a little at the Rio casino. Rather over-did it on the aperitifs, so it's all a bit of a blur.


Caffyns (LON:CFYN)

Share price: 565p
No. shares: 2.76m
Market Cap: £15.6m

Interim results are out today, for the six months to 30 Sep 2014.

Underlying EPS is up slightly from 33.5p to 35.6p, which looks a tad disappointing, but the company says that trading was disrupted with four sites having major upgrades.

Note that Caffyns is family-controlled, due to a strange share capital structure. Some investors may not like this, as these type of skewed control structures (where one class of shares has additional voting rights) are frowned upon these days.

I particularly like the Balance Sheet here, as it has a lot of freehold property, which gives opportunities for releasing value, as has been done from one site where surplus land was sold for £1.4m. Freeholds also make the company much more secure in any downturn - banks are usually happy to lend against property, and it protects the company from rental increases which would otherwise happen if property was rented.

Pension deficit - is £9.4m net of tax, and requires modest overpayments of £358k p.a.+inflation.

Outlook - sounds encouraging.

My opinion - I was hoping for a stronger increase in profits, so the share price is probably up with events for the time being.


Omega Diagnostics (LON:ODX)

A Director bought 173,500 shares at 15p, a meaningful but not huge purchase for a small cap, and that seems to have put a rocket under these shares, which are up 30% today. Maybe it's also a delayed reaction to results earlier this week?


There's nothing else of interest today, so I'll sign off.

Monday's report will be late, as I'm flying back into the UK overnight, arriving mid-morning. So jet-lag permitting, I'll hope to get a report up here on Mon afternoon or evening.

Best wishes, Paul.

(of the companies mentioned today, Paul has a long position in CFYN, and no short positions. A fund management company with which Paul is associated may hold positions in companies mentioned)


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Caffyns plc is a motor retail and aftersales company in the southeast of England. The Company is engaged in the sale and maintenance of motor vehicles, including the sale of tires, oil, parts and accessories. The Company is engaged in new car sales and offers used cars for sale, corporate sales car servicing, car repairs, wholesale parts, Motability and accident repair. The Company is operated and managed on a dealership-by-dealership basis. The Company operates from its own freehold properties, which offers long-term returns. It focuses on approximately three key areas, including used car sales, used car finance and aftersales. The Company represents a portfolio of six franchises, comprising Audi, Seat, Skoda, Vauxhall, Volkswagen and Volvo. The Company operates through approximately seven franchises. The Company offers deals on various cars in over 10 locations across the southeast of England. The Company provides fleets to companies across Sussex, Kent and Hampshire. more »

LSE Price
400p
Change
2.6%
Mkt Cap (£m)
10.5
P/E (fwd)
n/a
Yield (fwd)
n/a

Omega Diagnostics Group PLC is a medical diagnostics company. The Company's segments are Allergy and Autoimmune; Food Intolerance; Infectious/Other, and Corporate. Its product categories include allergy, anemia, autoimmunity, fertility and growth hormones, food intolerance, infectious disease, inflammation, quality control, thyroid hormones and tumor markers. For allergy, it offers Allergodip, which is an enzyme immunoassay for the semi-quantitative determination of Specific immunoglobulin E (IgE) in serum or plasma. For anemia, it offers ATHOZYME Ferritin, which is an enzyme-immunoassay (ELISA) test for the detection and quantification of Ferritin in human serum. It offers a range of products for Rheumatoid Arthritis, Systemic Lupus Erythematosus (SLE), Antiphospholipid Syndrome (APS), Connective Tissue Disease, Gastrointestinal, and Vasculitis and Renal Disease. Its Fertility Hormones products include PATHOZYME-LH (Luteinizing Hormone), PATHOZYME-Prolactin and PATHOZYME-Oestradiol. more »

LSE Price
10p
Change
4.7%
Mkt Cap (£m)
12.7
P/E (fwd)
n/a
Yield (fwd)
n/a



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


5 Comments on this Article show/hide all

Metier9 28th Nov '14 1 of 5

Paul,

Any opinion on the SOLI news release about directors selling shares to institutional investors? (900k)

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janebolacha 28th Nov '14 2 of 5

Paul, good morning.

There's a note in the CFYN RNS which, I think, explains the seemingly disappointing EPS comparison. I take it to mean that underlying EPS this year are 35.6p compared with (33.5p less 12p), that is with 21.5p last year. Is that not right? If so, the result is pretty good.

"Basic earnings per share are 38.0p (2013: 30.8p) and underlying earnings per share are 35.6p (2013: 33.5p). In the corresponding period last year, following a reduction in the rate of corporation tax, there was a consequent tax credit of £333,000 which increased basic earnings per share by 12.0p."

Enjoy that tacky place, take time out to visit the Grand Canyon, much more interesting than the fake Sphinx, etc, etc.

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janebolacha 28th Nov '14 3 of 5

Paul, any thoughts on Gleeson's figures?

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janebolacha 28th Nov '14 4 of 5

In reply to post #88170

Sorry, my mistake, that seems to apply only to "basic earnings per share"!

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shipoffrogs 28th Nov '14 5 of 5
2

Gleeson is a funny one - it keeps updating the market to say it's exceeding expectations and shortly afterwards the share price drops.

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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 Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

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