Small Cap Value Report (3 Jul 2015) - NET, UBI, SDM, PXS, EAH

Friday, Jul 03 2015 by
33

Good morning!

I'm away from home today, with a very poor internet connection, so am hoping I'll be able to get through this article without any more technical problems!


Netcall (LON:NET)

Share price: 51.5p (down6.4% today)
No. shares: 137.0m
Market cap: £70.6m

Takeover deal is off - an unusual announcement today from Eckoh (LON:ECK) stating that a major Netcall shareholder has been reluctant to support the deal which had been agreed between the companies' management:

5596403b5545eNET_takeover.JPG

This is certainly embarrassing for both Boards - usually when a recommended deal is announced, the deal would go through, with major shareholders having been taken inside, and agreeing it beforehand.

Netcall's biggest shareholder is Livingbridge VC LLP, who hold 17.9%, so presumably it must have been them who scuppered the deal? The next largest shareholder is Gartmore, with 10.8%, then Investec with 8.7%.

The problem with this mooted deal was that it was mainly in shares - 63.94p for each Netcall share, of which only 13p was in cash. The balance was in Eckoh shares (based on them being priced at 40.75p), but in my view Eckoh shares are significantly over-valued, so personally I wouldn't want to swap shares in something reasonably priced, and get paid in shares that are over-priced! Perhaps that's why the deal floundered?

From the point of view of Netcall shareholders, at least they now have the comfort (and potential future upside) of knowing that a third party is interested in buying their company. A better deal might come along in the future perhaps?


Ubisense (LON:UBI)

Share price: 96p (-13.1%)
No. shares: 36.3m
Market cap: £34.8m

Profit warning - yes, another one! It last warned on profit on 30 Apr 2015, and stated that it needed to raise more money. Then on 8 May 2015 a Placing at 90p was announced, to raise £10m (pre-expenses). Then on 4 Jun 2015 new banking facilities were agreed with HSBC.

Today it says there have been further contract delays:

5596490d093e2UBI_pr_warn.JPG

More detail is given:

55964b3132183UBI_pr_warn_2.JPG

So a bit of a mixed bag. Without guidance on how these various points will combine to affect profits, it's difficult to draw much of a conclusion. So it would be a case of…

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Netcall PLC is a United Kingdom-based company, which designs, develops and markets communication, workforce management and business process management (BPM) software and services to the healthcare, public and private sectors. The Company provides corporate solutions, health solutions and public solutions. The Company's corporate solutions include multichannel contact center, workforce optimization, customer self-service and proactive outbound applications. The Company's health solutions include patient self-service, appointment management cycle, and resource management and work optimization. The Company's public solutions include case, record and document management, and customer service. The Company offers platforms, such as corporate liberty platform, public liberty platform and health liberty platform. The Company also provides deployment services, including on premise, cloud and hybrid; professional services, including training, and support services, including SolutionCare. more »

LSE Price
32.5p
Change
-3.0%
Mkt Cap (£m)
46.5
P/E (fwd)
23.5
Yield (fwd)
1.1

Ubisense Group Plc is engaged in providing enterprise location intelligence solutions for manufacturing, logistics, transit, communication and utility companies. The Company operates through two segments: Real-Time Location Systems (RTLS) and Geospatial. The RTLS segment takes real-time location data from its own sensing hardware, or from standards-based integration with third party hardware, and transforms this data into spatial event information, delivering asset identification, real-time location and spatial monitoring. The Geospatial segment delivers software solutions that integrate data from any source, including geographic, real-time asset, global positioning system, location, corporate and external cloud-based sources into a live Geospatial common operating picture. The Company offers various products, such as SmartSpace, Smart Factory, myWorld, myWorld Damage Assessment, myWorld Inspection & Survey, myWorld Network Insight, Dimension4 and AngleID. more »

LSE Price
68p
Change
 
Mkt Cap (£m)
49.7
P/E (fwd)
n/a
Yield (fwd)
n/a

Stadium Group plc is a provider of integrated electronic technologies. The Company operates through two divisions, including Technology Products, which incorporates wireless, interface and displays, power and stontronics, and integrated Electronic Manufacturing Services (iEMS) provided through design and manufacturing operations in the United Kingdom and Asia. It offers various services, such as design (electronic, mechanical and software), prototype, new product introduction (NPI), global procurement, in house tooling and molding, printed circuit board (PCB) assembly, box build and test, packaging and global logistics. It provides wireless machine-to-machine (M2M) connectivity solutions for original equipment manufacturer (OEM) devices in vehicle tracking, telematics, fleet management, smart metering, asset tracking, wearable technology, handheld devices, infotainment and security systems. It serves various manufacturers in the marine, aviation, medical and broadcast industries. more »

LSE Price
121p
Change
 
Mkt Cap (£m)
n/a
P/E (fwd)
n/a
Yield (fwd)
n/a



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


6 Comments on this Article show/hide all

Gostevie 3rd Jul '15 1 of 6
3

Hello Paul,

Re Netcall (LON:NET), I am speculating here but Livingbridge VC LLP run the Baronsmead VCTs so presumably their holding in Netcall is spread across those. It could be that a combined Netcall/Eckoh business would be too large to be a 'qualifying investment' for a VCT to invest in, and that could cause them problems.

I stress I haven't checked this, it is just a thought.

Steve

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m_uller 3rd Jul '15 2 of 6

Re Ubisense (LON:UBI), I recommend you read the HSBC loan facility announcement on 4 June - you have HSBC saying what a high quality this business is

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Camtab 3rd Jul '15 3 of 6
2

With you on the Primary Bid Platform Paul. What a good idea!

I have looked at UBI several times, not only because I am based in Cambridge, and I just can't get excited when looking at the Revenue growth forecasts against the profits forecast given the implied risks of supporting a loss making business. Looking backwards when they have made profits not exciting. I may be missing the point but its not for me. In an environment where there are quite a lot of profit warnings coming through and I happen to think the market is expensive I want to see real potential supported by real revenue growth if I am going to go down the risk route.

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apad 3rd Jul '15 4 of 6
1

Ubisense.
One of my generic rules is that any fool in a lab can cobble together cameras and software - it doesn't make a business, even in Cambridge.
This is a prejudice based on research experience, not a proper opinion of this company.
apad

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ericb 3rd Jul '15 5 of 6

apad - do you actually know what UBI does .. ?

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apad 3rd Jul '15 6 of 6

Location Technology. Lots of papers from 2009. I might have made a mistake though?
apad

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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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