Small Cap Value Report (5 Apr 2016) - KOOV, BLNX, MOSB, IND, ADT

Tuesday, Apr 05 2016 by

Good morning!

Apologies for no report yesterday. As usual, I'll catch up with the backlog later this week. Timeliness may not be my strong suit, but I hope my reports are usually interesting & worth reading, even if they're a little late.

Koovs (LON:KOOV)

Share price: 20p (up 16.5% today)
No. shares: 44.9m
Market cap: £9.0m

Trading update - given that fashion retail is my sector, I keep a close eye on potentially interesting shares. Koovs has been a car crash to date - it's got a very high rate of cash burn, and has run out of money basically. It's tried & failed to raise adequate funding, and instead has had to rely on a small amount of extra cash provided mostly by its own Directors. 

So this has to be seen as a very high risk punt, not really an investment at all. However, if they do pull it off, to become a big player in India's online fashion sector, then the shares could potentially become a serious multibagger. So I'm keeping an open mind on this one.

Today's trading update looks to me mostly like a PR release, to get investors excited about growth, to push up the share price before the next Placing. In fairness to the company, it has been completely open about the fact that it needs substantial extra financing, about 4 times the current market cap, to get to breakeven. That's a big ask, and so far there hasn't been any significant investor interest - in terms of actual money being stumped up. I'm sure there have been plenty of meetings, but no cash.

Today the company trumpets an 189% increase in sales, to £10.0m for y/e 31 Mar 2015. Sounds great, but make sure you read the little footnote, which says;

Gross sales order value placed through the KOOVS.COM website including taxes.  This does not represent the revenue of the Group.

Doing a bit of googling suggests that India has VAT rates which vary from state to state, and for different products. However, a rate of about 12.5% seems the norm for general goods, which might include clothing perhaps? If any readers can clarify on this point, that would be helpful.

However, a further deduction is needed, because Koovs has an unusual capital structure. The group holding company only owns 57.5% of the main operating subsidiary. So 42.5% of the value…

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Koovs plc is a supplier of branded fashion garments and accessories for sale by a third party through Website principally in Republic of India. The Company offers dresses, tops, jumpsuits and playsuits, skirts, trousers and leggings, cardigans and pullovers, lingerie and sleepwear, and swim and beachwear, among others, for women. It offers shirts, t-shirts and polo shirts, vests, jeans, jog pants, shorts, hoodies and sweatshirts, coats and jackets, and innerwear and socks, among others, for men. In addition, the Company offers bags and wallets, accessories, sunglasses, jewelry and watches. The Company offers its products of various brands, including Knockaround, KOOVS, Kultprit, Pataaka, Pepe Jeans, Shuffle, Sole Threads, Vans, Voi Jeans, Modello Domani and Mr Button, among others. The Company's subsidiary is Koovs Marketing Consulting Private Ltd. more »

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RhythmOne plc, formerly blinkx plc, is an online advertising company that connects digital audiences with brands through content across devices. The Company is engaged in offering online advertising through a range of formats and pricing options that include video, mobile, social, display, native, text and media covering brand, and performance advertising campaigns, sold both directly and programmatically. The Company offers RhythmMax, which is an integrated programmatic trading platform. The RhythmMax platform offers a common point of access to RhythmOne inventory across owned, controlled and extended supply sources. The RhythmMax platform includes specialized brand safety technology, RhythmGuard, which combines third-party verification methodologies with filtering technology to ensure quality inventory. The Company works with advertisers, publishers and content providers to offer integrated, cross-screen advertising solutions. more »

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Moss Bros Group PLC is engaged in retailing and hiring formal wear for men. The Company operates through Moss Bros branded mainstream stores. The Company's segments include Retail and Hire. The Company offers various types of suits, skirts, jackets, trousers, coats, casualwear, ties, shoes and accessories. The Company offers clothing and accessories for various occasions, including weddings, prom, race day suit, tuxedo and black tie, interview attire and graduation. The Company also trades through Savoy Taylors Guild fascia. It has approximately 100 Moss Bros and Savoy Taylors Guild branded stores and over 20 Moss Bros outlet stores, which trade Moss Bros own brands and selected third-party brands, including Hugo Boss, Canali, Ted Baker, DKNY and French Connection. The Company has approximately 120 Moss Bros Hire outlets, which are contained within Moss Bros Retail and Savoy Taylors Guild Stores. The Company's sub brands consist of Moss London, Moss 1851 and Moss Esq. more »

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

43 Comments on this Article show/hide all

Paul Scott 5th Apr '16 24 of 43

In reply to post #126404


Please don't copy my advfn posts here. They are 2 very different places, and my posts (especially late at night/early morning) reflect that.

If people want to read my ramblings on advfn late at night, they can do so there.

I see you couldn't resist a little dig at me too re the gearing. Thanks for that.


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Cockerhoop 6th Apr '16 25 of 43


Regarding Hornby HRN, from memory they participated fully in the fund raise last June substantially increasing their investment (though not % holding) and have since slightly reduced.. I certainly don't dispute the ineptness of their selling but don't believe they're distressed.

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Fangorn 6th Apr '16 26 of 43

In reply to post #126407

I don't see why you've an issue, unless you're embarrassed at the content of your posts on Advfn - they certainly aren't different places - they're both Bulletin boards for starters, they share a good proportion of the same posters, and the topic was IndigoVision specifically - which led to your outburst in the first instance.

Perhaps your followers here don't look at advfn - perhaps they venture over to the zoos at LSE/3i. Perhaps they tend to just visit here.

As to the "little dig" claim.....

Stop being a wet blanket Paul.

I was merely pointing out the factual hypocrisy of your attempted character assassination of some fund manager despite being guilty of making an even bigger mistake yourself!(You aren't alone in the over leveraged department.We all make mistakes before you get on your high horse.)

As I said, you like to dish it out but as soon as someone says something you take offence at it it's play victim time. Case in point being here. We won't mention the ridiculous tosh relating to Winnifrith's over exuberant pottymouthdom!

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simoan 6th Apr '16 27 of 43

In reply to post #126404


The great joy of this place is that posters "play the ball, not the man" unlike some of the more tedious bulletin boards. Please, let's keep it that way. No-one minds bearish comments on companies but they do not need to be personalised.

All the best, Si

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Fangorn 6th Apr '16 28 of 43

In reply to post #126461


I quite agree with your remarks.

I merely asked two innocent questions and was met with the aggressive response highlighted previously.

Just because it is another bulletin board is no excuse and I'm pretty sure If I had asked the same questions here PP's extended aggressive response wouldn't have materialised.

As I mentioned, it was clear he had a bad day Sunday as there was evidence of such littering the internet.

I certainly wasn't having a dig as frankly I really couldn't be bothered being that petty.

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herbie47 6th Apr '16 29 of 43

In reply to post #126455

They are different places fortunately, I have been on Advfn unfortunately. If you think this is the same as that then I can't agree. From my experience Advfn is worse than LSE. I don't think you should be copying information from bulletin boards to here. What is on there should stay on there.

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Fangorn 6th Apr '16 30 of 43

In reply to post #126467


They are essentially the same, stockopedia being where people exhibit better manners and the spammers/trolls are relatively non existent.

Given my comments questioning whether the FM knew something PI's didn't and what the state of the IND Tech currently was I certainly didn't expect to be on the receiving end of the overlty aggressive response Paul posted. Which clearly he wouldn't have posted IF I'd have put my questions here on Stocko.

Don't see why some people should get special treatment - if you aren't happy to stand by your aggressive comments on one bulletin board, whilst maintaining an innocent persona on another, then the answer is surely not to engage in the former? Or have we all lost sight of common sense?

Anyway best leave it at that.

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herbie47 6th Apr '16 31 of 43

In reply to post #126470

Its probably because of the nature of different boards, some people really wound me up with their ramping and other rubbish thats why I rarely visit them now, you can't reason with them. Yes I think you are right, don't go there. Lets hope this board does not go down that route.

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nehpets 6th Apr '16 32 of 43

I have just got round to reading the Moss Bros (LON:MOSB) results and I am probably splitting hairs here as the amounts are not that material but I am a bit irked/confused by the exceptional items. This year there was an exceptional charge of £748K regarding property dilapidations which is exceptionally high this year - fair enough - but there is usually a £100K charge, as indeed there was in 2015 and it seems (although this is not entirely clear) that the group has included the whole dilapidation charge as exceptional - surely at least £100K of that £748K is underlying?

Like I say, it's probably neither here nor there but thought I'd mention it anyway!

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DJLJ23 6th Apr '16 33 of 43

In reply to post #126296

Regarding Sepura (LON:SEPU)

Pauls analysis of the situation (back end of last year) was bang on. Unfortunately it did not stop me investing in them. But it does, again, high light the value of Pauls analysis.

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rhomboid1 6th Apr '16 34 of 43

In reply to post #126545

I'd have thought that the correct treatment for dilapidations is to take the hit as they fall as it usually results from a lack of ongoing maintenance expenditure which would have flattered the p & l in prior years?

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Paul Scott 6th Apr '16 35 of 43

This is NOT a bulletin board.

This is a safe & COURTEOUS place where readers of my Stockopedia articles may add relevant & interesting comments about that particular article. I might respond to comments, if people write something interesting, and have some basic manners towards me & others.

Copying comments from advfn here is totally unacceptable. I shall be asking Ed to consider removing any such posts in future. Hope that clarifies. End of discussion.

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Fangorn 6th Apr '16 This post has been moderated
Murakami 6th Apr '16 37 of 43

Hi, I would hope it's widely understood that we set Stockopedia up to be a very different site/community to the various UK bulletin boards, with a strong focus on high quality fundamental data and frankly different standards of debate / discourse. We would especially like to avoid the noise and bickering that often seems to arise elsewhere in order to focus 100% on investment idea generation and hopefully how to make money. For that reason, we have our own Rules of Engagement - they are set out here

As a result, what happens between posters on, say, Twitter or other sites is not considered relevant to the moderators of this site - we regard any posting elsewhere as a private matter that is off-topic for Stockopedia. If people want to take issue with someone/something and/or "let off some stream", they can do it elsewhere and that's totally fine by us, just not here please because it quickly drowns out the useful investing content.

If anyone has any questions or comment about these Posting Guidelines (which we've developed over several years to hopefully best serve everyone's interests), please do feel free to contact our staff via the Green Feedback button. However, as we want to move the discussion on please, any more posts on this topic here will be removed/moderated. Thanks.

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gus 1065 11th Apr '16 38 of 43

I fear anyone not already aboard might have missed the boat on Indigovision (LON:IND). I've tried to buy on line a couple of times in the last couple of trading days without success and I see the share price is now back up to 157p. There have also been a couple of RNS about parties building up sizeable stakes and perhaps this has been mopping up supply. It also looks as though the Swiss trust has stopped selling for the time being. The opportunity may yet come back but currently not quite as lucrative as when Paul first flagged it up.

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gus 1065 11th Apr '16 39 of 43

In reply to post #127253

Stranger and stranger. New Pisoia fund just issued an RNS stating they have purchased 195,000 shares in Indigovision (LON:IND) taking their holding back above 26%. Assuming these are the shares they sold last week at about 125p, that's a negative b&b of about £50,000.

Can't live with you, can't live without you (as the Carpenters nearly once sang).

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bsharman 11th Apr '16 40 of 43

In reply to post #127265

I saw that Gus and was very surprised - why would they do that unless it was something to do with the financial year end?? Did Richard Winston Farmiloe also go up to 6% today.

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CliffPeat 12th Apr '16 41 of 43

12/04 Tuesday 11:00 : Indigovision (LON:IND)
New Pistoia Income Limited holding now back up to a tad under 29% and Richard Winston Farmiloe bought 100k on Thursday and has 6.57%.

Given Paul's own significant holding and knowledge of the company, it would be interesting to know his view on the potential and likelihood of the sale of the company (if he is in a position to express it).

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cig 12th Apr '16 42 of 43

In reply to post #127265

Could it be they lent that to a short seller who have now closed their position?

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TraderTim 30th Apr '16 43 of 43

Blinkx (LON:BLNX) I have held for over a year and still hold till this day - quite why I do not know. The shares have shown very little sign of moving upward. It is probably up there in my Top 5 of worst trades - I can't see this doing anything other than grinding lower and lower.

Blog: Trader Tim
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 Are LON:KOOV's fundamentals sound as an investment? Find out More »

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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