Small Cap Value Report (30 Sep 2016) - VLK, TET, TNI, AVS, PIER

Friday, Sep 30 2016 by

Good morning!

First of all, a bulk apology. I've accumulated a huge backlog of emails & other messages requiring attention. So if you're waiting for a reply from me, then please accept my apologies, I'll try to catch up over the weekend. It's been manically busy of late.

Brighton ShareSoc

This is now a monthly meeting, on the 2nd Tuesday of each month. So the next meeting is on 11 October, at the same venue, the Caxton Arms, which is very handy for Brighton mainline station.

It was great fun last time, and people came from far and wide to support the event. I really enjoy these events, and at each one I'll be giving a 30 minute talk on the most interesting small caps that I've come across in the last month.

Plus, we get to meet a small cap company each month too. This month, 1pm (LON:OPM) will be giving a presentation. This is an interesting growth company, which helps small businesses finance their asset purchases.

Please could people book a.s.a.p. if you wish to join me at the next meeting in Brighton, as the organisers need early bookings to be able to press ahead and organise the food, etc.

Pension deficit information

Good news! Stockopedia now includes data on company pension deficits. This is something that many of us have been requesting for a long time, so it's brilliant that this has now been added.

This short video from Tom at Stockopedia explains all.

Or, this article also from Tom explains it in text format.

Vislink (LON:VLK)

Share price: 8.95p (down 44% today)
No. shares: 124.6m
Market cap: £11.2m

Interim results to 30 Jun 2016 - John Hawkins' disastrous stewardship of this company continues, with more terrible news for shareholders today. The situation looks extremely precarious, and I think that the company will need to do an emergency fundraising pretty soon, or end up potentially going bust. It's jammed up against the overdraft limit currently, of £15m, with covenant breaches being waived by the bank (so far). That makes it uninvestable, in my view, so I think anyone still holding this share is at large risk of further, maybe total, losses. So it's definitely one to ditch now, as too high risk, in my opinion.

Turnover, and order intake have both fallen sharply. So the…

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Pebble Beach Systems Group plc, formerly Vislink plc, is a software and technology company. The Company is engaged in the collection and delivery of video and data from scene to screen. The Company's Pebble Beach Systems division is a developer and supplier of automation, Channel-in-a-Box and content management software solutions for television broadcasters, cable and satellite operators. For the broadcast markets, the Company provides wireless communication solutions for the collection of live news, sport and entertainment. The Company's products include Marina, which is an enterprise level playout automation platform for multi-channel applications; Orca, which is an Internet Protocol (IP)-enabled cloud-based integrated channel delivery solution; Dolphin, which provides multi-format integrated channel delivery solutions based on information technology (IT) hardware, and Stingray, which is a self-contained Channel-in a-Box. more »

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Treatt PLC is a United Kingdom-based ingredients manufacturer and solutions provider to the flavor, fragrance and consumer goods markets. The Company's geographical segments include United Kingdom, Rest of Europe, The Americas and Rest of the World. The Company's products include Essential oils, Citrus, Treattarome, Functional ingredients, Chemicals, Organic essential oils, Vegetable oils and Treatt brew solutions. Its Essential oils include Amyris Oil, Angelica Oil and Aniseed Oil. Treattarome products include Pineapple Treattarome, Honey Treattarome and Cucumber Treattarome. Its Citrus products include citrus oils, CitrustT, TreattZest and Citrus add-back range. Its Functional ingredients include beverage specialties, fragrance ingredients and sugar reduction products. Its chemicals include aroma chemicals, natural chemicals and Treatt Flavour Wheel. Its Vegetable oils include Borage Oil and Baobab oil. Its organic essential oils include Organic Aniseed Oil and Organic Lime Oil. more »

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Reach plc, formerly Trinity Mirror plc, is a national and regional news publisher. The Company is engaged in producing and distributing content through newspapers and associated digital platforms. It operates through four segments: Publishing, which includes all of its newspapers and associated digital publishing; Printing, which provides printing services to the publishing segment and to third parties; Specialist Digital, which includes its digital recruitment classified business and its digital marketing services businesses, and Central, which includes revenue and costs not allocated to the operational divisions. The Publishing segment publishes paid-for national newspapers and paid-for and free regional newspapers, and operates a portfolio of related digital products. The Printing segment operates five print sites with approximately 20 full color presses. Trinity Mirror Digital Recruitment operates three specialist job boards: GAAPweb, TotallyLegal and SecsintheCity. more »

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30 Comments on this Article show/hide all

Damien84 30th Sep '16 1 of 30

Good afetnoon Paul

A company called Treatt (TET) put out an upbeat trading statement today stating that they will be 'comfortably ahead. This one has been on a watchlist of mine since 2013 and has never looked the right price to buy until today so i took some on the opening bell.

Its a £109M market cap company and describes itself as One of the worlds longest established ingredient solutions provider to the flavour, fragrance and personal-care industries. A sector thats in favour imo.

I think broker forcasts are for £85.5M revenue and about £8.3M PTP. There will be a currency headwind of about £0.5M and a one off charge of £0.9M to me the shares look like they may re-rate a bit higher and im targeting about 250p as a short term trade. Whould love to know your opinion of the company.

Another company Zambeef produce (ZAM) issued a very bullish statement this morn but i admit to knowing absolutly nothing about it. But on first glance they look cheap!

Have a nice weekend.

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Paul Scott 30th Sep '16 2 of 30

In reply to post #152294

Hi Damien,

If you refresh your page, I've recently added a section about the positive update today from Treatt (LON:TET)

As regards Zambeef Products (LON:ZAM) - the clue is in the name! I'm bargepole on nearly all overseas companies on AIM, because they nearly all go wrong, sooner or later.

Regards, Paul.

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John Cannadine 30th Sep '16 3 of 30

Interesting announcement from Avesco (LON:AVS) - they seem to be following the script and focusing on the Creative Technology division of the company. Time for a rerate?

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yamaha865 30th Sep '16 4 of 30

Surely Avesco should be gearing up a bit to fund expansion or else pay some special divis. Cant see being debt free is the most efficient structure at the moment.

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herbie47 30th Sep '16 5 of 30

In reply to post #152294

Yes Treatt (LON:TET) has been on my watchlist for a while now, still not bought any. One thing that has put me off buying in the past is the relocation plans, has there been any developments?

Zambeef Products (LON:ZAM) I would be wary off, I remember there were in IC shares of the year a few years ago, nearly sank them, think they do put out bullish statements (pun intended).

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bsharman 30th Sep '16 6 of 30

I'd be F'ING fuming if I was still a Vislink (LON:VLK) shareholder and I feel extremely sorry for those that still hold here. The "value creation plan" became a "value destruction plan" by the management, who have lost all credibility. How they managed to destroy this business would make an interesting business school dissertation. I managed to get out as soon as the management announced the ""Value"" ""creation"" scheme but I've had other investments in the past which have gone as badly wrong. I'd be interested to hear from those that have a system of red flags if Vislink (LON:VLK) was exposed as being in danger.
Have a great weekend,

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jjis 30th Sep '16 7 of 30

Hi Paul I was surprised to see this morning that Brighton Pier Brighton Pier (LON:PIER) was listed. On checking the results I see it seems to have come about from some kind of reverse takeover of the former Eclectic Bars. Furthermore I see that Luke Johnson is now involved and seems to want to turn it into a destination venue group and be a potential consolidator. Looks like it could be interesting and since you live in that area I guess you may have more of a view on the viability of the pier. Finally I see they do also apparently have rooms for hire for meetings and catering facilities so it might even work for your Sharesoc meetings if you don't find your current venue up to scratch at some point. 

Hope this might be of interest / helpful to you - have a great weekend. I do not hold the shares only came across it this morning out of curiosity.



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Paul Scott 30th Sep '16 8 of 30

In reply to post #152324

Hi Jamie,

Yes that's right, Brighton Pier (LON:PIER) is a Luke Johnson vehicle, which bought the Palace Pier in Brighton, and tacked it onto what was Eclectic Bars. I went to a meeting where LJ gave a short talk to explain his plans for PIER. He described it as wanting to make it into a "mini Merlin".

He's a brilliant entrepreneur of course, so PIER shares certainly deserve a LJ premium.
I'll take a look at the latest accounts now, and will add a section to today's report.

Regards, Paul.

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herbie47 30th Sep '16 9 of 30

In reply to post #152312

I was lucky I sold out at 60p so I did make about 50%, I sold because of valuation having listen to Paul's opinion. Vislink (LON:VLK) seemed to go wrong when this VCP was announced. I would interested in Paul Rosier's views now as he was quite a strong supporter of VLK last year.

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jjis 30th Sep '16 10 of 30

Hi Paul,
While you're at it you could update your bit about 1pm (LON:OPM) who had a trading update which was in line & included this great comment by the Chairman - ""Trading and financial results for the first quarter ended 31 August 2016, were in line with management's expectations. This period included the "Brexit" referendum decision, which has in fact had no overall impact on business activity to date, reflecting the broad spectrum of SME sectors the Company serves through its three subsidiary entities, Onepm Finance, Academy Leasing and Bradgate Business Finance Limited."

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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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