Small Cap Value Report (Fri 22 June 2018) - THAL, PRP, WINK

Friday, Jun 22 2018 by

Good morning! Today I'm interested to look at:

If there is time, I will then circle back to one or two stocks hanging over from earlier in the week. Cheers!


Thalassa Holdings (LON:THAL)

  • Share price: 84.5p (unch.)
  • No. of shares: 19.1 million
  • Market cap: £16 million

Final Results for the year ended 31 December 2017

The long-awaited results from this holding company are out at last.

It's a book value play, so I'm not too concerned about the profit figure. Thalassa was profitable in 2017 due to the business which it has disposed of, so the profit figure for 2017 is in any case irrelevant to the future.

Thalassa's balance sheet equity reduced last year from $27.3 million to $25.6 million, because of its share buy-backs.

The business disposal was completed on 1 January 2018, so it is not reflected in the financial statements issued today.

The company helpfully provides a pro forma look at the position after disposal:


The total book value includes some very uncertain values. I can break it down like this:

  • Net Cash: $20.3 million = £15.3 million (latest exchange rates)
  • 25% stake in Local Shopping Reit (LON:LSR) = £6.7 million (latest share price)

We then have the company's 100% stake in Autonomous Robotics Ltd ("ARL").

ARL is still in prototype stage. External financing for the project was sought in 2017, but has not materialised yet. The operating loss generated by ARL/Thalassa for the year amounts to $1.7 million.

I have no idea if ARL has positive value, so will write it down to zero for my own purposes.

A conservative estimate for Thalassa's  book value is therefore £15.3 + £6.7 million = £22 million, or 115p per share, to be reduced by further short-term losses at ARL.

There is another $10 million payment the company might receive in contingent consideration for its disposal last year. This would boost NAV to 154p per share.


The Chairman's statement is fascinating.

As Thalassa no…

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All my own views. I am not regulated by the FSA. No advice.

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Thalassa Holdings Ltd is a holding company. The Company is focused on providing marine geophysical services, autonomous underwater vehicle (AUV) research and development and homeland security and real estate services. Its directly owned subsidiaries in the energy services industry include GO Science Group Ltd (GO), which is an autonomous underwater vehicle research and development company with a subsidiary Autonomous Robotics Limited. more »

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Prime People Plc is an international recruitment services organization. The Company is engaged in providing recruitment consultancy and other ancillary services. The Company's segments include UK, Asia and Rest of World. It offers both permanent and contract specialist recruitment consultancy for large and medium sized organizations. As distinct brands, Prime Insight and Prime Energy serve the data analysis and customer insight, and renewable energy and sustainability sectors respectively. Its brand also includes Macdonald & Company, which is engaged in real estate and built environment sectors. Its subsidiaries include Macdonald & Company Group Limited, which is a holding company, and Macdonald & Company Property Limited, Macdonald and Company Freelance Limited and Macdonald & Company Ltd, which are engaged in recruitment business. The Company has its offices in the United Kingdom, the Middle East and the Asia Pacific region from which it serves an international client base. more »

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M Winkworth PLC (Winkworth) is United Kingdom-based franchisor of residential real estate agencies. The Company operates through franchising business segment. The Company's business is the franchising of estate agency sales, residential lettings and property management services under the brand name Winkworth. The Company offers a platform to estate agents from which to access Winkworth's compliance, marketing, public relations and administration services. Winkworth Franchising also offers additional products, such as financial services, auctions, surveying and commercial property sales. The Company has offices in various locations across the United Kingdom, as well as in France and Portugal. more »

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

12 Comments on this Article show/hide all

MrContrarian 22nd Jun '18 1 of 12

My morning smallcap tweet:

Thalassa Holdings (LON:THAL), M Winkworth (LON:WINK)

Thalassa (THAL) The very tardy FY17 results. Pretax $1.4m ($2.0m) but continuing ops -$2.5m (-$0.2m). Soukup unwisely comments on SP "I am, nonetheless, confident that, as we realise gains on our current holdings, THAL's returns will, in time, be reflected in the Company's share price, which should, in due course, make up lost ground on the major indices and more closely reflect THAL's intrinsic value." No big cash return coming: "any premature return of capital could jeopardise Management's ability to realise targeted returns on the Company's current holdings." How much cash will the autonomous flying node system (ARL)? ARL will continue to seek potential sources of funding.
M Winkworth (WINK) Return of Capital of 9p/sh coming. SP 126p.

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Gromley 22nd Jun '18 2 of 12

Not of any investment interest whatsoever, but I was taken by the reported contract win from Imaginatik (LON:IMTK)

Imaginatik plc (AIM: IMTK.L), the #1 ranked leader in corporate innovation management according to Forrester Research,

Well, you wouldn't want to be invested in the "#2 ranked leader" would you? Just  the type of company I love, a management consultant that spouts BS.

Anyway, aside from flagging the nonsense, there was a serious point. 

It reads to me that they are playing essentially in the same space as Sopheon (LON:SPE) which has been discussed here previously (and whose share price has nearly tripled this year).

Given that Imaginatik (LON:IMTK) has a market cap of £1m and turnover of c.£4m pa compared with Sopheon (LON:SPE) £95m & c. £30m I'm curious as to how they can be seen by Forrester as the "#1 leader"? Any thoughts from Sopheon (LON:SPE) holders?

Oddly the put themselves up for sale a few months ago, but could not get any offers that they considered good enough to recommend to shareholders, so the Chairman & CEO promptly resigned (although the former chair seems to have contributed to a refinancing).

Looking at one of Graham's favoured metrics; shares in issue increased from 4.56m in 2012 to 156m most recently. Wow!

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rwalford 22nd Jun '18 3 of 12

If you have time, might you be able to comment on the announcement by Augean (LON:AUG) that it has sold a loss-making business (running losses £0.7m, anticipated closure costs £1.6m) for a receipt of £1m plus £100k rent pa for the lease?
Many thanks

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Andrew Mitchell 22nd Jun '18 4 of 12

I held Thalassa Holdings (LON:THAL) some time ago. I sold out during the latter part of 2014 after a pretty murky property deal which involved the company moving its UK operations from Cornwall to Wiltshire. I won't say anymore in relation to that deal (you can easily find reports online including the response of the board) but I will say that it was a red flag for me and was the reason for selling. I will not invest in this company again.

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Banzii 22nd Jun '18 5 of 12

I know it's no longer a small cap (or even a medium one) but Fevertree Drinks (LON:FEVR) is well known in these parts and it's a slow news day.

Analysts at Jefferies have upped it's target to £40 and says £60 is possible if it takes off in the US market. Suspect this is the reason for the 3% rise today.

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Brookeda 22nd Jun '18 6 of 12

Thanks Graham for the write up on Prime People (LON:PRP)
I've been an holder for a couple of years now albeit it's my smallest holding and agree with your statement. The stock has generally moved slowly down over the last couple of years on very little trading and my biggest concern is if they decide at some point to delist.
They claim and have done so for several years that the listing helps them with business. I expect a good return from this in the longer term and will enjoy the dividends in the meantime but as you say it's not an industry that will ever set the world alight.

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tomps3 22nd Jun '18 7 of 12

Just posted the Empresaria (LON:EMR) presentation from Mello Hever.

Quite a comprehensive overview by the CEO and new Group FD.

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rhomboid1 22nd Jun '18 8 of 12

In reply to post #377439

Hi Brookeda

I found Prime People (LON:PRP) totally unhelpful & unresponsive when as a shareholder I had a few legitimate Q’s ...I sold my tiny starter position immediately as trust in directors is incredibly important in a microcap


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Graham Neary 22nd Jun '18 9 of 12

In reply to post #377439

re:: Prime People (LON:PRP)

You're welcome. I agree - unlikely to set the world alight, likely to send some nice divis. Good luck! G

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Graham Neary 22nd Jun '18 10 of 12

In reply to post #377399

Hi Andrew, I've heard about that and didn't want to get into it because I don't have all the details but I agree, it sounds questionable. G

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Graham Neary 22nd Jun '18 11 of 12

In reply to post #377364

Hi Ricardo, I don't follow Augean (LON:AUG) because it strikes me as an energy/utility-type of stock, and these are sectors I don't typically follow.

Today's news from the company sounds constructive - good luck if you are a holder! G

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goodapple 23rd Jun '18 12 of 12

In reply to post #377404

I remain mystified by the flat footed response of the Sch.... ( you know who )'s response to the explosive growth of Fevertree in the tonic market. Instead of upping their game, Schweppes branding now looks distinctly 'cheap' in style on the shelf next to Fevertree Drinks (LON:FEVR).
Fevertree haven't simply stolen Schweppes lunch, Schweppes have given it to them.

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About Graham Neary

Graham Neary

Full-time investor and independent analyst. Prior to this, I spent seven years in the financial markets as an analyst and institutional fund manager. I'm CFA-qualified, also holding the Investment Management Certificate and the STA Diploma in Technical Analysis.Away from finance, my main interests are recreational poker and everything to do with China, especially Mandarin Chinese. more »


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