Small Cap Value Report (Mon 1 Oct 2018) - BOTB, WEY, BST, RNWH | Paul Scott

1st Oct '18 by Paul Scott

24 comments 9563 reads

Good morning!

CEO Interview - Best Of The Best (LON:BOTB)

(at the time of writing, I hold a long position in this share)

It's been nearly 3 years since I last interviewed William Hindmarch, CEO of BOTB - a small AIM-listed company which operates weekly supercar & luxury goods competitions. The company has transitioned from operating in airports, to online. There is only 1 airport location left, Birmingham. This has partially obscured the growth from online.

My feeling is that the company has the potential to become more highly valued, if the growth rate can be stepped up. It has been paying generous divis in the last few years, including specials.

As usual, I like to crowd-source the questions for my interviews, from you. Therefore, if you have a question that you would like me to ask William, please leave a comment on today's report here, below.

Wey Education (LON:WEY)

Share price: 15.0p (before market open today)
No. shares: 130.7m
Market cap: £19.6m

(I no longer hold any position in this share)

Trading update

This is an educational business, operating online home schooling services.

Setting up the proposed JV in China is taking longer than expected.

The delay is not expected to have any material effect on revenues or profits for the current year given the internal budgets for the anticipated build-up of the operations this year.

The current year ends on 31 Aug 2019.

Current trading - the main business seem to be going well;

The Company is pleased to report that at this early stage of the new financial year all business divisions are reporting an encouraging start. The Company has previously stated that in addition to its international operations, its priority for the current year is to drive growth in its traditional online school and B2B division.

It is pleased to note at this stage of the year, those divisions are reporting sales activity materially ahead of the equivalent position at this time last year.

Broker update - the house broker has put out a short note today, saying that it will not be making any changes to existing forecasts.

My opinion - the 2019 forecast looks very aggressive - with revenues more than doubling, and…

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MrContrarian

1st Oct '18

My morning smallcap tweet: Peter Pollock kicked in the, er, kicked upstairs.

Eckoh (LON:ECK), Trakm8 Holdings (LON:TRAK), EPE Special Opportunities (LON:ESO), Imaginatik (LON:IMTK), LPA (LON:LPA), Wey Education (LON:WEY)

Eckoh (ECK) wins two-year US contract worth $7.4m to provide secure payment solutions.
Trakm8 (TRAK) wins 3 year contract extension for 2000 vehicles at first and 10,000 and 15,000 vehicles over the lifetime of the contract.
EPE Special Opps (ESO) sells investment in Process Components Limited for £13.6m. NAV gain of 11.16p/sh to 216.3p.
Imaginatik (IMTK) financial performance has improved. Talks to appoint new nomad. Talk is cheap. "Several existing and new potential investors have approached the Company since the announcement on 26 September with interest and proposals. Since the management changes at the start of June, the immediate focus of the new team has been for the business to become self-funding as soon as possible and this continues to be the aim." Cap now only £740k.
LPA Group (LPA) CEO Peter Pollock kicked upstairs. Paul Curtis [internal appointement] becomes Chief Operating Officer and will become CEO in due course, at which point Peter will move to Non-Executive status.
Wey Education (WEY) JV setup in China delayed and is not expected to have any material effect on revenues or profits in this FY. FY has encouraging start.

Brookeda

Paul on Best Of The Best (LON:BOTB) I would like to understand how they perceive the benefit of a listing and if there are any discussions on taking it private?. As a follow up is there any plans to increase the liquidity of the shares to broaden the appeal? On your comments now they have pulled out of a physical presence what do they expect growth to be over the next few years and do they expect to increase marketing costs to support that growth? I guess ultimately should we consider it as a cash cow or growth stock? Finally what do they see has the biggest risks to their business given the relatively lucrative margins they are able to attract.
Thanks
Dave

ken mitchell

A request for Wey Education (LON:WEY) please Paul following the trading update and news of China delay today. Graham ended his comment in May by writing that he also had concerns about probable difficulties in China.

john652

Hi Graham,

Re botb, id very much like to know the payout ratio. I’ve posted on this before as the previous model seemed to be the car won that week or month could be a focus or a Ferrari with no concideration given for the ticket revenue, they don’t loose on a Ferrari and make a big margin on a focus. If the payout ratio doesn’t ratchet up against revenue it’s as bad as a scam at worst, or at best a publicity accident waiting to happen. There was no reference to this in any company docs that I could find.

Thanks Graham

Small Cap Value Report (Mon 1 Oct 2018) - BOTB, WEY, BST, RNWH

CEO Interview - Best Of The Best (LON:BOTB)

Wey Education (LON:WEY)

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Paul Scott

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