Small Cap Value Report (Fri 19 Nov 2021) - WIN, MORE, VANL, CAR

19th Nov '21 by Paul Scott

57 comments 10116 reads

Good morning, it's Paul here with the last SCVR for this week. Today's report is now finished - have a lovely weekend!

Agenda -

Wincanton (LON:WIN) - impressive growth in profits in H1 results. Solid trading update, and it looks set up for a possible earnings beat for FY 3/2022 maybe? I like the firm grip the company has on supply chain/labour issues, with higher costs being passed through to customers. Balance sheet is still weak, and don't ignore the pension scheme - which is currently absorbing half free cashflow. Overall though, WIN looks good value to me.

Hostmore (LON:MORE) (I hold) - the demerger from ELTA (I hold) has been a disaster in the short term, with an obvious failure on the part of Numis to line up buyers - an essential part of a demerger! I think that's created a very good buying opportunity, because the fundamentals of the business are unchanged, it's just that hardly anyone seems to know it's listed! I give my current opinion, based on the fundamentals, not emotions or short term price, and flag up an InvestorMeetCompany early next week, which might interest you.

Van Elle Holdings (LON:VANL) - a solid trading update for H1. Confirms expectations for the full year, although I think it might be limbering up to beat forecasts which look modest. Strong balance sheet pleases me, so there's no insolvency risk in my view. Probably priced about right, with a big increase in next year's earnings already anticipated in forecasts.

Carclo (LON:CAR) - previously an over-indebted basket-case. Interim results today show a dramatically improved picture. Bank debt now looks more reasonable, given a strong improvement in profits. However, the pension scheme is sucking out £4.0m p.a. in cashflow, and rules out dividends for some time to come. Hence why the equity looks cheap - because the large pension deficit has first dibs on the cashflows.

Explanatory notes -

A quick reminder that we don’t recommend any stocks. We aim to review trading updates & results of the day and offer our opinions on them as possible candidates for further research if they interest you. Our opinions will sometimes turn out to be right, and sometimes wrong, because it's anybody's guess what direction market sentiment will take & nobody can predict the future with…

Unlock with Email

Unlock with Google

Already have an account?
Login here

matylda

19th Nov '21

Paul - I think Carclo (LON:CAR) have a 3 year agreement in place for the Debt and Pension - So hopefully any raise, if needed, will be at a higher price, if they can continue to make progress from here.

Have a great weekend.

FREng

Many thanks, djh. Petrotal (LON:PTAL) 's Q3 report looked positive to me and the medium term looks remarkably good. Maybe we'll see broker upgrades now.

davidjhill

They had a capital markets day which you can find on the website. I'm fairly certain I saw recent broker note recently that showed they were ahead of their planned £5.4m ebitda for this year at the half way stage.

The only thing that wasn't properly addressed in the financials of the capital markets presentation was debt. They are targeting sub 2* ebitda (so £11m or less) to net cash medium term but had already paid down below £10m at H1 so I'm guessing at £7-8m by y/e.

Agree we need clean accounts coming through but there's a lot of info in the capital markets presentation. Worth a read.

sharw

xricx - if ii have not solved your problem you should sent them a secure message headed Formal Complaint. That will trigger several mechanisms including a clock as they will wish to solve it before the point when you can take it to the financial ombudsman.

see https://www.ii.co.uk/legal-ter...

btw have you tried selling the Monreal? (without pressing the accept button!)

yep - fingers crossed!! I'm happy enough here. May have to wait a bit but I think they will re-rate upwards at some point next 12 months.

gus 1065

Wondered if there are any holders of/views on Gb (LON:GBG) ‘s US$736m acquisition of US firm Acuant and the placing done after hours last night.

https://www.stockopedia.com/sh...

Quite a big purchase requiring a £300m placement that was done at 725p share/a 17% discount to the closing price suggesting either a bit of indigestion in the placing process and/or a bit of a thumbs down for the acquisition itself. At face value it looks a good strategic fit giving a boost to US growth but maybe the suspicion that the price is a bit rich as even after full synergies it’s expected to be earnings neutral in the first year. Shares marked down today about 11% at the moment having been a fair bit lower at market open.

Gus.

MiserableJacktPotato

Investors - Unbound Group PLC

Recording available here

BnB

Re Gb (LON:GBG)

I'm a long term holder and not unhappy to see a more aggressive stance from what has been a steady burner over recent years. Thankfully, my profit is higher than the company's growth thanks to a judicious entry. Also like my shares, the target has a much stronger growth rate than the acquirer so I hope for a boost to performance. The purchase is apparently neutral in F22 and accretive from FY23 although that remains to be tested. Meanwhile I take comfort from today's moderate bounce from the placement level. I actually added 20% at the placement price shortly after open, reflecting the increase in the share count, as I like the management and sector. No new research notes have been issued to my knowledge but Edison and Canaccord both cover.

bryaz

i will have em if you don"t want them

Hi BnB,

I bought some Gb (LON:GBG) through the PrimaryBid offer that came out last night. Good that they offered some to the PI although at £5m in aggregate it was quite a small bone for them to toss. I was slightly surprised that the PB offer didn’t seem to be oversubscribed (I got the full allocation I requested) as the PB offers are usually scaled back. Possibly because they gave no hint as to likely placement discount which was a fair bit higher than I anticipated. I agree it’s a good purchase - makes sense to buy in growth in the US - main concern being the acquisition price given we maybe seem to be towards the top of the tech cycle at the moment. If it works out today’s purchase price will be largely irrelevant in the scheme of things.

Good luck to us both!

gmtrader

If you look at the Edison broker report (you can see this for free if you register with them) it states Electra Private Equity (LON:ELTA) are 8% ahead in EBITDA for the first 7 months. Staying at 8% and the EBITDA for the whole year would be £5.8m. I’d guess they will beat that and probably hit £6m EBITDA.

laurie

Re: Interactive Investor

I've found the people who answer the phone at Interactive Investor quite variable in their ability to solve problems. I may be easier to hang up and call back later in the hope that someone more able to help will answer the phone. There are people there who know what is going on. Finding those people can take several attempts.

garbetklb

I've had similar issues with Interactive Investor recently.

Last week rang Customer Services & was put through to someone on the Estates team - got cut off.

Rang back 2 minutes later and was categorically told that Estates were "not customer facing" and, after a bit of disagreement, had a long session of asking a question, him asking Estates & relaying the answer back, which prompted another question from me - you get the picture.

Later in the week spoke to Customer Services again, got better advice and, at the end of the conversation, she volunteered that I'd be better ringing the Estates Team directly next time and was given the number..........

GloucesterBob

Reference Hostmore (LON:MORE) late RNS today states

Position

No. of Shares under Award
Robert B. Cook Chief Executive Officer 639,136
Alan Clark

Chief Financial Officer 448,054

The awards were granted as Performance Share Awards subject to a two-year
Holding Period on 17 November 2021.

The Vesting Date of each Performance Share Award shall be 17 November 2024.
The Exercise Period of each Performance Share Award shall expire on 16
November 2031. A two-year Holding Period applies to each of the Performance
Share Awards.

Does anyone know what the Performance criteria is in order for the shares to be awarded?

Rusty2

20th Nov '21

Some companies customer services are appalling in this country. Ig Group (LON:IGG) are really bad, can take well over 1 hour to get through and then they are clueless and just give duff information to get rid of you. Barclays I just spent 3 hours in the last few days, trying to sort out access to my credit card account and I'm still no nearly to resolving it, spoke to 4 different people, each time had to start again, numerous security questions etc, last person was trying to talk to another dept. to resolve it but after 30 minutes still no response, completely useless.

Customer services seems to have got a lot worse in the last 2 years.

Gostevie

Hello RustBucket.

I have no dealings with Ig Group (LON:IGG) or Barclays, but on a broader level I completely agree with you regarding customer service generally. Far too many times I have been put on hold for ages, only to finally be put through to somebody who barely even speaks English.

peterg

21st Nov '21

No experience of Braclays banking, but in general I've found customer service for Barclays Stockbrokers very good. When I've needed I've always been able to get through to someone in the UK, who doesn't read from a script, generally knows what they are talking about, and will find out if they don't. It's not as good as before Barclays made such a mess of integrating stockbrokers with banking, and they've failed to reintroduce secure messaging, as repeatedly promised, but thankfully the telephone help desk seems to have survived the massacre.

JSLDUK

The price of Electra and Hostmore following the de-merger look like bargain price at the moment. Feel the main risk to both is any further lockdowns. TGI Fridays should have a great xmas trade if they are allowed to open for xmas parties and Hotter Shoes should also do well in the same scenario with people wanting to dress up to go out. Don't yet hold, but that may change soon.

Harry Hindsight

Good Lord. Maybe a separate post to highlight what both do and synergy for future growth. Somebody did not like it so a buy op?

Small Cap Value Report (Fri 19 Nov 2021) - WIN, MORE, VANL, CAR

Unlock the rest of this article with a 14 day trial

About the Author

Paul Scott

57 comments

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

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