Small Cap Value Report (Mon 25 Sep 2017) - SPRP, ELCO, FISH, XPD

Monday, Sep 25 2017 by
43

Good morning!

Sorry for the slow start today.

Candidates for coverage:

Any other requests? Please let me know. (Edit: Switched in Elecosoft (LON:ELCO) to the above list, took out Spaceandpeople (LON:SAL) as too small.)

Cheers,

Graham



Sprue Aegis (LON:SPRP)

Share price: 210p (unch.)

No. of shares: 46 million

Market cap: £97 million

Half-year report

This is a maker and marketer of fire alarms and carbon monoxide detectors which has been making decent share price gains in 2017 (up from c. 180p in January).

It had some damaging inventory problems in 2016 which it now appears to have moved on from, and has recovered to profitability. Basic EPS is 2.8p per share, up from a 1.3p loss in H1 2016.

Highlights:

  • Group revenue of £26.0m (H1 2016: £25.9m)
  • Adjusted operating profit* of £1.5m (H1 2016: operating loss* £0.9m)
  • Gross margin pre-BRK distribution fee up by 6.2% to 31.7% (H1 2016: 25.5%)

Note that the BRK distribution fee is a specific payment to one of its suppliers in exchange for the right to distribute that company's products. The agreement with that supplier is ending next year, so it's probably irrelevant to analysis of Sprue's future value!

Sprue has net cash of £10 million and the dividend is maintained.

Adjusted operating profit is before £0.2 million of share-based payments, so I would make sure to also deduct them from the profit figure.

The highlights also mention that inventory has reduced - making the probability of another stocking mishap less likely! Continuing to reduce inventory remains an objective, so hopefully the probability will reduce even further.

I won't pretend to be an expert in the alarm industry but the strategic report sounds quite promising, with new partnerships and products on the way, e.g. "Europe's first domestic battery powered gas alarm"!

Today's share price is unchanged because ultimately, today's numbers and the outlook are in line with expectations:

Our product roadmap out to 2020 provides…

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Disclaimer:  

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

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Fireangel Safety Technology Group plc, formerly Sprue Aegis plc, is engaged in the business of design, sale and marketing of smoke and carbon monoxide (CO) detectors and accessories. The Company also operates its own CO sensor manufacturing facility in Canada. The Company is also a provider of home safety products. The Company's principal products include smoke alarms and CO alarms and accessories. Sprue manufactures CO sensors for use in all its CO alarms. Sprue serves in the United Kingdom retail and the United Kingdom's fire and rescue services. The Company offers a range of brands, including FireAngel, AngelEye, Pace Sensors, First Alert, SONA, BRK and Dicon brands. The Company's subsidiaries include Sprue Safety Products Limited, which is engaged in distribution of smoke and CO alarms, and Pace Sensors Limited, which is a manufacturer of CO sensors. more »

LSE Price
41p
Change
-4.7%
Mkt Cap (£m)
18.8
P/E (fwd)
19.2
Yield (fwd)
n/a

Elecosoft plc is a United Kingdom-based company. The Company is focused on providing software and related services to the architectural, engineering, construction and digital marketing industries. The Company’s software programs cover project management, construction site management, estimating, timber engineering, 3D design and visualization, and cloud-based digital marketing solutions. more »

LSE Price
70.5p
Change
 
Mkt Cap (£m)
57.7
P/E (fwd)
16.6
Yield (fwd)
1.3

Fishing Republic plc is a fishing tackle retailer in the United Kingdom. The Company's principal activities are the retailing, production and wholesaling of fishing equipment. The Company operates through the segment, being that of the retail of fishing tackle and equipment. It operates from a chain of retail outlets principally located in the North of England and online. It caters for various types of the anglers, such as coarse, carp, game and sea fishing, and supplies a range of products, including brands. It also offers consumables, such as bait, lines and hooks; clothing, and luggage products. The Company's product offerings include a range of own-brand ranges, such as Klobba for clothing and Theseus for carp fishing products. Its stores are located in Barnsley, Doncaster, Hull, Manchester, Rotherham, Sheffield and Sunderland. Its subsidiaries include Fishing Republic Trading Limited and Fishing Republic Retail Limited, which are engaged in the retail of fishing equipment. more »

LSE Price
5.25p
Change
 
Mkt Cap (£m)
2.7
P/E (fwd)
n/a
Yield (fwd)
n/a



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


32 Comments on this Article show/hide all

Dieselhead2 25th Sep '17 1 of 32
2

ELCO please Graham!
Regards D2

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truegent 25th Sep '17 2 of 32
1

for me, Elecosoft (LON:ELCO) please graham, i think Paul is long on this too...thank you...

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fredericktug 25th Sep '17 3 of 32

might not be your or Paul's bar but Hydrodec (LON:HYR) please - could be an amusing read (nurses loss)!

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willhampson 25th Sep '17 4 of 32
2

Posted in other thread, but unless I'm being immensely dumb (which is very possible) I can see nothing released today by GAME Digital (LON:GMD)... It's finals are expected in the second week of October as far as I knew.

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Ramridge 25th Sep '17 5 of 32
1

Hi Graham - Xpediator (LON:XPD) is a very recent IPO (Aug 2017) and it has issued HY results this morning.
The company has been in existence for some years and has been running a profitable international logistics business.
Today's results look decent and point to a growth story in the EC.
Would be interested in your views.
Regards, Ram

declaration: went long this morning with an initial stake

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robin66 25th Sep '17 6 of 32
2

In reply to post #222133

I can't see any news from GAME Digital (LON:GMD) either on here, investegate, advfn or co. Website but must be somewhere as Graham has it listed above!

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Ramridge 25th Sep '17 7 of 32

In reply to post #222143

..... but Zoo Digital (LON:ZOO) has issued an AGM statement ...

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rwalford 25th Sep '17 8 of 32

How about Bioventix Bioventix (LON:BVXP) ?

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FREng 25th Sep '17 9 of 32

In reply to post #222143

The update is on Stockopedia and ADVFN ( and I have just posted it to Matylda's blog).


EDIT my mistake - apologies - that's an old one.

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InvestedGeordie 25th Sep '17 10 of 32

Third vote for £ELCO

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robin66 25th Sep '17 11 of 32

In reply to post #222163

Thanks FReng, doesn't appear on my iPad so must be a fault at my end!

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Logic 25th Sep '17 12 of 32

The update FREng is referring to seems to be rather similar to the one released 23rd of August. Is there a glitch suggesting it was posted more recently?

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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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