Small Cap Value Report (Fri 19 June 2020) - STAF, RCN, WHR, ANIC, TRI, COST

185

18th Jun '20 by Paul Scott

110 comments 9016 reads

Good morning, it's Paul here with Friday's SCVR.

Sorry I didn't manage to do any more writing yesterday afternoon, I was too tired by the time I got home, and not in the best frame of mind, with the car having failed its MoT for the second time in a week.

Estimated timings - I've started at 7am, so should be done by 1pm.
Edit at 13:07 - today's report is now finished.

Staffline (LON:STAF)

Share price: 48.5p (up 52% yesterday) - currently down 17% today, to 40p, at 08:54
No. shares: 68.9m
Market cap: £33.4m

Statement re share price movement

Some kind of speculative frenzy gripped this share yesterday, with it spiking up 52% on no news. Hence the company has needed to put out a statement today. The crux is;

Staffline, the recruitment and training group, notes the recent movement in the Company's share price and confirms it is not aware of any reason for the price movement...

Further points;

Bank facilities - expects to agree & implement revised financing arrangements soon.

Results - for FY 12/2019 should be published soon (they need to get their skates on, as I think the shares would be suspended if not published by end June). Audit work not yet finalised - which will presumably hinge on bank facilities being signed off, in order to publish accounts on a going concern basis. Although this might allow shares to continue trading, possibly? -

The full report and accounts for the year ended 31 December 2019 is now expected to be published and sent to shareholders in July. Accordingly, the Company has applied to AIM Regulation for an extension to the current reporting deadline of 30 June 2020, which has been granted in accordance with the temporary measures put in place due to the impact of COVID-19.

Figures - 2019 results expected to show small underlying EBITA loss, and pre-IFRS16 net debt of £59.5m - that's a lot of debt, but remember that Staffline has a blue chip client base, with a large receivables book. So the bank has quite good security.

Cashflow - benefiting from Govt deferral of VAT & payroll taxes - "significantly improved ... liquidity through the end of 2020". Whilst this is helpful, these liabilities will still have to be paid at a later date, which the bank may not be happy…

Unlock with Facebook

Unlock with Google

or Unlock with your email

Already have an account?
Login here

Unlock the metrics for all these stocks and more...

Paul Scott

19th Jun '20

Thanks Ginfred, I was not aware of that,

Would insurance still apply do you know? If a car was not MoT'd?

timarr,

The issue, I think, is that all of the deaths on the smart motorways are caused by the same thing - people stopping or breaking down on the dynamic hard shoulder and then getting out of their cars. That seems preventable while accidents caused by excess speed are accepted.

Personally I hate the things, but the actual evidence is that they reduce congestion and pollution and save lives. Not that that will make any difference of course.

Show the evidence for this please.

A Morris Minor with wet drum brakes, driving at 70mph is incredibly dangerous. A modern car that can stop on a dime with ABS is not.

Motorway accidents are NOT caused by excess speed. They are mostly caused by driver inattention, and drivers being too close to the car in front.

The safest thing you can do, to prevent motorway accidents, is to leave a good long gap between you & the vehicle in front.

I've looked into this stuff all my life, so DO actually know what I'm talking about, unlike the proud but foolish father.

Regards, Paul.

Gostevie

Apologies if this is off topic here but I wanted to post it somewhere for posterity.

I was on the 94 bus from Lancaster Gate to Oxford Circus early this morning and a very loud and obnoxious Australian (who incidentally felt he was *far* too important to obey current instructions and cover his face on public transport, despite everybody else doing so) was bragging on his mobile to somebody that he had inside information that an obscure and tiny AIM company called Gunsynd (LON:GUN) is going to issue a game changing RNS on Monday.

I have no position and no interest in this company, and the market is closed for the weekend anyway, but let's see if anything happens.

laurie

Paul,

Your MOT extension will no longer apply if you take your vehicle for its MOT and it fails.

Here are the rules: https://www.gov.uk/guidance/coronavirus-covid-19-mots-for-cars-vans-and-motorcycles-due-from-30-march-2020

JohnEustace

Whenever I hear Government ministers talking about "smart" solutions I immediately think they simply aren't spending the money to do the job properly and are pretending it will all be OK if they paper over the cracks with some technology.

And they'll be in another job before it all goes wrong so someone else can deal with the mess.

Another company with negative revenues. Seems to be a theme today. In these strange times that must mean it has infinite value.

sharw

20th Jun '20

It is classed as an investment company and therefore its "revenue" is the increase or decrease in the value of its investments.

This one is also an investment company see my post above.

Simon Rowan

Not something you really want to test Paul. You know how insurances like to wriggle out. I believe you are allowed to drive to an MOT test station, for a pre booked test, but might depend what it failed on. Most car insurances have a clause 'a vehicle must have valid Mot , road tax and be in a road worthy condition.' Best ring your insurance to double check if in doubt and state the purpose of the journey. If you have AA insurance you could always try and get them to tow it to the garage! Plan B, plead ignorance, which is no legal defence. GL

timarr

Hi Paul

Show the evidence for this please

It comes from the Highways England Smart Motorway All Lane Running Overarching Safety Report published in March this year.: https://www.gov.uk/government/...

It's riddled with jargon but the main findings are a reduction in the overall number of deaths:

Overall, there has been an absolute reduction of 27.9% in the casualty rate, from16.76 to 12.08 per hmvm. When taking into account the national motorway trend of a 12.3% reduction in casualty rate, there has been a statistically significant reduction of 2.62casualties per hmvm, which is a 17.8% improvement. This change was statistically significant.

Naturally the press have ignored the findings. Still we wouldn't take any notice of the press when it comes to public safety, would we?

TheArb

Graham, I think it’s a bit different, it’s on the right not the left and it depends on which way most of the traffic is going, and it’s been like that from the beginning. Similar system on Sydney Harbour Bridge I believe,

re Smart motorway design. ‘.....due to people not using them properly.’ Then that is down to bad design! Good design foresees and caters to human behaviour, that is why you can’t put an electrical plug in the wrong way. You can’t blame people, you blame the designer for not understanding crowd behaviour!.

I read the executive summary and some of the report. There are 3 types of smart motorway and I believe one of them, the dynamic hard shoulder, has created a lot of the problems and is being knocked on the head. It's introduction was a mistake.

peterg

Tim,

I think part of the issue here (at least) is that there are more than one type of "Smart Motorway". Controlled motorway schemes - like the M25 with its dynamic speed limits seem to make a lot of sense, and I have no problem accepting they save lives and improve traffic flow.

But the real issue, and I'd assume that's what Paul is talking about, are the all lane running schemes (no hard shoulder) and the dynamic hard shoulder ones (no hard shoulder in rush hours erc). Those are where the excess deaths have been happening, and it's pretty clear that some of those are inevitable if you don't have a hard shoulder. However, good your CCTV monitoring and however quickly the signs are lit if someone has to stop on the HS then there is a real, and increased, risk of someone running into the back of a vehicle stopped on what has become the inside lane. Add to that normal human issues, drivers and cctv operators not paying 100% attention and the risks get bigger still.

I'd think it's pretty clear, that in contrast to what someone posted earlier, the driving force behind their adoption was not the ideas of academics, but the desire in transport departments to increase the number of effective lanes on some motorways without the considerable costs of building one.

no that would be two jabs.

Zipmanpeter

"(Re Smart motorways)..the desire in transport departments to increase the number of effective lanes on some motorways without the considerable costs of building one."

As this site has discussed re Covid, should the calculation not be : risk of death or injury compared to the cost of building vs the opportunity cost of other road safety investments - just as NICE compares the cost of alternative new medical treatments (or at least did until Covid!).

It could be that avoiding the extra motorway cost and fixing 200 traffic light junction/blind bends saves more lives more cost effectively; especially if autonomous motorways are only 10-15 years away. This is the tyranny of the big and obvious - think HST2 vs new suburban platform extensions and track links!! Health & safety is most about choices not eliminating risks.

Disc. - I own no SMART motorways or trainlines (nor have any special expertise in these :)

Hi peterg

The report is on the all lane running schemes - basically the safety aim seems to be to keep death rates at or below the levels seen before they were introduced. Which the report claims is the case.

To be honest, I don't really have a dog in this fight, I was just pointing out that the actual evidence suggests smart motorways aren't any more dangerous than normal ones. Personally I hate the bloody things, but I do feel we should try and weigh the evidence rather than jumping to conclusions based on gut feel and Daily Mail reports.

smatthews1

These 'smart' motorways are only as smart as the people driving on them. Most drivers will use them sensibly but unfortunately as Paul points out people don't pay attention. I have seen countless amounts of times people in high end cars, just modern ones in fact, driving whilst holding the phone to their face, or texting. Truck drivers fiddling around with 1 of their many Sat Nav devices on their dash. Yet most of these vehicles are fitted with Bluetooth connectivity.

Its a fact cars will always break down, yet one car can cause so much chaos because drivers are not reading the road ahead. More pressure should be put on manufacturers to tackle phone use in cars.

For that reason I am going to avoid Costain (LON:COST)

Diversification 99

21st Jun '20

RNS or no RNS the share price will probably get a boost on Monday now anyway by the mere mention here.!

22nd Jun '20

RNS out this morning:

https://www.investegate.co.uk/gunsynd-plc--gun-/rns/strategic-investment---rincon-resources-pty-ltd/202006221013086412Q/

Share price up about 23% at the time of writing. I wish I had bought some now.

Small Cap Value Report (Fri 19 June 2020) - STAF, RCN, WHR, ANIC, TRI, COST

Staffline (LON:STAF)

Unlock this Article with a 14 day free trial

About the Author

Paul Scott

110 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...