Good morning! It looks like another busy week for results & trading statements in the offing.

 

 

Regenersis (LON:RGS)

My last report on Regenersis included the comment that their Balance Sheet was looking weak, and could do with being strengthened with another Placing. That's exactly what they've done today, and it's a whopper - the group has raised £100m in a "significantly oversubscribed" Placing at 345p per share. That's impressive because of both the size, and also the narrow discount to the current share price of 354p, just a 2.5% discount. Joint brokers Panmure Gordon and Cenkos have clearly done an excellent job here.

There is a current trading update buried in the announcement, which sounds reassuring;

 

The Group's trading for the period since 31 December 2013 remains in line with market expectations for the year ending 30 June 2014.  The Board expects that profit growth in the second half of the current financial year will come primarily from the Group's Emerging Markets and Advanced Solutions divisions.  

The Board believes that opportunities for growth, both organically and by acquisition, remain strong. 

 

About half of the money raised is being used to buy a Finnish company called Blancco Oy Ltd, which specialises in data erasure. It looks a high growth company, with revenue growing at 25% compound from 2008-2013. Figures for 2013 for Blancco are E12.3m revenue and E4.3m EBIT. I'm not keen on the increasing prevalence of EBIT or EBITDA, particularly for technology companies, since you never know how much cost is being capitalised into intangibles. They don't mention profitability. That said, Regenersis management are pretty shrewd in my opinion, so this will probably be a good deal.

 

 

 

 

Vianet (LON:VNET)

Not one of my better share ideas this one. Although the lesson I've learned from this situation, is that no matter how much research & screening you do, something unforeseen can always happen. In this case it was a Government review of the brewery tie for pubs, which took everyone by surprise when a section was included within the original Govt document suggesting that beer flow monitoring equipment (where Vianet is the market leader) should no longer be used. It was a rather bizarre suggestion,…

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