Small Cap Value Report (Friday 1 April 2022) - QUIZ, RBGP, RNWH

1st Apr '22 by Paul Scott

57 comments 7944 reads

Good morning! It's Paul & Jack here with the last SCVR for this week.

Agenda -

Paul's Section:

Quiz (LON:QUIZ) - a positive trading update for FY 3/2022, moving back into a (small) profit, which compares favourably with a forecast £(2.9)m loss (from Panmures). Sound balance sheet. Looks to be getting back on track, and market cap of £18m seems stingy, even after today's c.36% rise.

Renew Holdings (LON:RNWH) - a reassuring H1 update today, everything is in line with exps. Renew has an excellent long-term track record, and is worth considering, on a reasonable forward PER of 12.4

Jack's Section:

Rbg Holdings (LON:RBGP) - a higher tax rate means fairly pedestrian earnings per share growth despite encouraging progress on revenue, EBITDA, and profit before tax. The valuation is undemanding and the strategy and growth potential are there, so I’m happy to hold with the 4-5% dividend.

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 certainty. We are analysing the company fundamentals, not trying to predict market sentiment.

We stick to companies that have issued news on the day, with market caps up to about £700m. We avoid the smallest, and most speculative companies, and also avoid a few specialist sectors (e.g. natural resources, pharma/biotech).

A key assumption is that readers DYOR (do your own research), and make your own investment decisions. Reader comments are welcomed - please be civil, rational, and include the company name/ticker, otherwise people won't necessarily know what company you are referring to.

Paul’s Section:

Quiz (LON:QUIZ) (I hold)

14.5p (up 36% at 08:54)

Market cap £18m

Trading Update

QUIZ, the omni-channel fashion brand, is pleased to provide a trading update for the financial year ended 31 March 2022 ("FY 2022").

Some good news, which is welcome in a very difficult market for small caps. Consumer discretionary shares, especially smaller ones, have been absolutely destroyed in the last 6 months, as inflation begins to squeeze household incomes (and looks set…

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Bouden54

1st Apr '22

Thanks for write up on Rbg Holdings (LON:RBGP) Jack. Decided to sell out this morning - nothing drastically wrong just a bit underwhelmed by results (as I think you were!) and slight concern over the large bonus for CFO. Always slightly wary of investing in legal companies as there will always be mismatch between who takes the profit - the lawyers or the shareholders - I think we all know the answer to that.

I do see attractions in litigation finance but would prefer to invest in one of the dedicated funders Burford Capital (LON:BUR) Litigation Capital Management (LON:LIT) or Manolete Partners (LON:MANO) whereas for RBG it's just a small part of their business.

Andrew Ross

Is acquiring professional services firms really a sustainable business model? I know accountants who worked at Tenon - it went bust! Imagine that, a firm of accountants going bust! Bought too many firms and after a lock in period the key people leave and so do clients, who then rejoin the accountants/lawyers they trust and like. SP rise in the short term as EPS grows etc... but fundamentally a flawed strategy as I see it. Fine to trade but not a coffee can stock and not one you want to hold when the music stops.

Cuddlesticks

Atalaya Mining: ATYM

I wonder what the story is behind Yanguu Copper selling its 22% stake via a secondary placing at a 20% discount to yesterday’s market price. Good to see the share price has bounced back somewhat but I’m curious to understand what caused the forced sale. ATYM management sounded very upbeat during a recent InvestorNeetCompany presentation so it looks like the issue was with Yanggu

davidjhill

Onthemarket (LON:OTMP) really interesting anomaly highlighted today in one analyst note that Boomin is about to complete a £20m funding round with a valuation of £150m!! It has 8k advertisers compared to Onthemarket (LON:OTMP) and is loss making whereas Onthemarket (LON:OTMP) is profitable with net cash.

Currently Onthemarket (LON:OTMP) sits on a valuation of just £69m and must be far more valuable than Boomin.

Just goes to show there appears to be materially more value to a company in the private equity space than there is as a listed company, which is supposed to be the opposite!

Jamboreebop

Atalaya Mining (LON:ATYM)

"Creditors to Yanggu Xiangguang Copper Co., one of China’s biggest copper smelters, have stopped providing more loans over concerns about its ability to repay"

https://www.bloomberg.com/news...

psin

Re Mr Contrarian. You have got to be spot on.............. And if so, he's caught a few.

Trading on an EV to EBITDA of sub 3 which looks too low.

KevinS1

1m shares in Rbg Holdings (LON:RBGP) is over 1% of the issued share capital. I am flabbergasted. I haven't looked at their annual report to see his remuneration, but this stinks.

I was looking further into Rbg Holdings (LON:RBGP) as a potential investment, but will now avoid it like the plague.

That is a disgrace. I'd love to see this put to a shareholder vote. I would question the CEO, Chairman and Non-Exec who chairs the remuneration committee and ask them if they felt this was in the best interests of the shareholder or simply getting another crony onto the fat-cat gravy-train which will later allow them to also issue similar packages to themselves.

Completely uninvestable.

Michael Tee

RGB Holdings (LON: RBGP).

At the IMC today I asked Nicola Fulston about the rationale behind the entirely non-performance related EIP.

The answer was that Robert Parker (easily confused with Peter Parker (AKA Spiderman)) has not received bonus or shares for the last 3 years as it has not been possible without causing an accounting issue. The 1,000,000 nil cost shares which vest in 2 years time actually cover 3 historic years and 2 future years so 5 years in total. I may not have explained this very well but it made sense. Watch the IMC recording for clarity.

I owns shares in #RBGP.

planetx

Still a wind up .

And still a gravy train for directors / senior employees at the expense of shareholders .

Really annoys me that it is accepted practice and that the investment community is willing to turn a blind eye .

Red flag now , there are better companies out there that don’t do this so just don’t waste time on companies that do this .

You will never guess what just happened .

My FD just walked in and said that she is happy to stay at the company but I need to pay her 400k cash in 2 years time on top of her current package .

I thanked her for her commitment to the cause and of course signed her up because that’s no problem .

Oh hang on, I’m the owner of the company and that’s 400k of my profits, so I told her to do one .

jonno

I have just watched the Rbg Holdings (LON:RBGP) presentation on investor meet company. Several positives but also as commented below some perceived negatives, one being the issue of 1,000,000 nil cost options to the CFO. Rbg Holdings (LON:RBGP) is however a people business and I suppose there is a difficult balance to be struck between keeping the best people, but not doing so to the detriment of shareholders. Having said that the company has to date always fronted up and you have to hand to Nicola Foulston, she takes no prisoners.

On balance I am happy to hold as I think that the management team led by Nicola Foulston who holds 12% of the equity, are competent and ambitious. There is also a potentially attractive dividend going forward with a stated intention of paying out up to 60% of earnings.

As mentioned earlier it is my preferred way to access the litigation finance arena, as the breadth of Rbg Holdings (LON:RBGP) activities de-risks the former.

lyndhurst25

I will certainly be investing and urge others to do so too. Remember to tell Sid.

TheFloatingInvestor

What a great chance to top up on a down with ATYM today. Yanguu must need the cash....but with copper prices high that's bad news for them I think.

The Scribe

The CFO can always be replaced. They're not indispensable.

AAhhh Jamboreebop..makes sense...thanks for this!

Its not bad and lets face it, there's a lot of people who have not been so well remunerated over the last 3 years as he has, I bet. I never received GBP200k of Share Options a year.

Silver Moon

I'll consider dipping my toes into Rbg Holdings (LON:RBGP) in two years time, the SP has been slipping since around this time last year so must give it time to be turning around guided by you-know-who. As of now I don't hold.

eggbaconandbubble

April fool

Brilliant info, thank you

Small Cap Value Report (Friday 1 April 2022) - QUIZ, RBGP, RNWH

Paul’s Section:

Quiz (LON:QUIZ) (I hold)

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Paul Scott

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