Small Cap Value Report (5 Sep) - SID, CAP, EMR, FFY

Thursday, Sep 05 2013 by

Good morning! The lack of communication over the suspension of Silverdell (LON:SID suspended) really has been shocking, and to a certain extent reinforces my belief that private shareholders are regarded as an after-thought, and are last in the queue to find out what's happening when something goes wrong, and to have our interests considered and defended. It's not good enough - the information vacuum here has been appalling, since the shares were suspended on 2 Jul 2013.

The company or its NOMAD still haven't properly informed private shareholders as to what actually happened, whereby part of the group fell into Administration and the shares were suspended on 2 Jul 2013. Here we are just over two months later, and there still has not been a clear explanation as to what happened, why, and what is being done about it. Suppliers and employees were thanked for their "patience & forbearance", leaving many shareholders wondering why, as the owners of the business, they have been largely ignored!

Anyway, this is clearly a unique situation - it's not a normal insolvency, because the existing Bank, HSBC, have been helpful in refinancing the Group, in order to enable it to buy back the business & assets of its subsidiary from the Administrator. So either there was some enormous liability which emerged, and had to be ring-fenced by putting Kitsons into Administration, or (as I've always believed seems more likely) the whole thing was some gigantic cock-up, over a Winding Up Petition for a relatively trivial amount of money, which was paid but apparently the Winding Up Petition not withdrawn for some reason or other.

I believe that shareholders will probably do alright in the end here, with the shares likely to come back from Suspension, with an equity fund-raising being needed fairly urgently one would imagine, to restore confidence and repay the Bank the bridging finance they have provided. Clearly though management credibility is shot to bits, and recognising that fact, the CFO (Chief Financial Officer - I see we are slowly adopting the Americanism [don't we always, eventually?!]) has today fallen on his sword, which strikes me as a good thing. It's his job to ensure things like this don't happen, so he had to go.

A new CFO has been found, being Mark Hazlewood, formerly Group FD at May Gurney before its acquisition by…

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Empresaria Group plc is a United Kingdom-based international specialist staffing company. The Company's principal activity is the provision of staffing and recruitment services. The Company is organized across three regions: UK, Continental Europe and Rest of the World and operates across seven key sectors. The Company targets a balanced and diversified spread of operations across its regions and sectors. The Company also targets professional and specialist job levels where its brands can offer value added services to clients. The Company has three main service lines, temporary recruitment, permanent recruitment and offshore recruitment services. The Company’s offshore recruitment services represents a range of different recruitment services and provides training services in South East Asia. The Company's brands include Alternattiva, Ball and Hoolahan, Become, FastTrack and Greycoat. It has operations in 21 countries. more »

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1 Comment on this Article show/hide all

rmillaree 5th Sep '13 1 of 1

Ref Fyffes
Nice to see you mention Fyffes - they have done quite well over the last couple of years gradually increasing profits and future expectations too . They seem to have put the their past wobbles behind them although being a fruiterer (is that the correct lingo?) they are bound to have some issues with harvests at some future point in time. Hopefully their Melons and Pineapples stuff add some needed diversification with this regard.

The balance sheet is still pretty rock solid although not as tasty as it was a couple of years ago when the company was only worth its Net Tangible Asset Value.

I have TD Direct saying divi should be 2.4p (or is it euros) - subject to Irish withholding tax so the yield should be over 3%.

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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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