Small Cap Value Report (Thu 18 July 2019) - ZANE - placeholder
Good morning, it's Paul here.
(all the below written the night before)
Many thanks to Graham for holding the fort with such aplomb. This has given me a smashing break, including being Uncle Paul for this week, enjoying every moment of my niece's graduation, and my nephew's fantastic progress in the family tradition of music. A lovely cluster of family birthdays, and parties, certainly gave me a much-needed boost, after a pretty miserable time with my stock-picks in the last year.
You have to roll with the punches in life, and this is a walk in the park compared with 2008.
I think about all the people I met in Zimbabwe in Feb 2019, literally every day. The situation there is getting worse by the day, as the latest currency (called RTGS, or bond notes) is devaluing rapidly. That makes my shrinking shares portfolio feel literally insignificant.
It's long overdue for me to do something meaningful. So I've decided to raise £100-200k for emergency help, for the destitute in Zimbabwe, to be distributed through ZANE. I met almost all their workers in Zimbabwe, and can vouch for the decency & diligence of everyone. It's a Christian charity network, that helps the poorest of the poor. I'm not religious myself, but I saw how people in desperate circumstances do cling onto religion as the only hope they have. So I found it moving when each meeting or meal, had a prayer before & afterwards. Maybe I don't need prayers, as my life is relatively comfortable?
I've come up with a way of magnifying donations. Here's the idea;
1) Individual donations via a JustGiving page I'll set up
2) Sponsors & Donors (individual & corporate) who pledge to match every donation £ for £ (I've already got one very generous individual who has pledged £3k, and one corporate that has said they will contribute at least £1k). This is before a proper fundraising effort, which I'll get busy doing over the summer. PRs, brokers, and small caps, please get in touch if you would like to contribute.
3) ZANE matching - I met with Tom Benyon, the founder of ZANE, who liked my matching idea so much, he has pledged that ZANE itself will match all the above donations £ for £ .
Therefore, every £1, that UK investors donate to this appeal, will QUADRUPLE (plus Gift Aid), in terms of money that will go directly to help people in distress, in Zimbabwe. 10% for admin seems reasonable to me, so I hope that's OK.
I spent over a week, observing ZANE's operations in early 2019. It's no exaggeration to say that it was life-changing for me, making me realise how molly-coddled my own life is.
I'd like to raise money for an emergency ZANE appeal, as follows;
Audiologist salary at Harare Hospital - I spent a morning at this facility, run by WizEar, and it treats 150 children every week (ENT). We can help the whole facility run, by funding the trained audiologist from South Africa. This is a gap in their funding. German funds fitted out the clinic, for about $250k, but it has a small running cost shortfall. We could fund that.
All the staff came in, on their day off, to see ZANE trustees, I met them all - their passion is obvious. A small amount of money will go such a long way here, in keeping this clinic open. The hospital had not had running water for 3 months - that's how bad things are.
Club Foot correction - a partner programme - just click on this link to see how a small cost intervention, early on, transforms a child from being a lifelong cripple, to being normal. It's breath-taking. A brilliant UK surgeon set up this programme, and ZANE partners him. Brilliant teamwork.
Womens' Refuge - another project which I visited. Women who have been traumatised in ways which were kept from visitors, but which dawned on me, when I heard first hand accounts of out-of-control army units, rampaging through the poorest areas, tearing families from their homes, and subjecting them to unimaginable horrors. Art, and seamstress type work is done, along with counselling. Hand-made products such as greeting cards are sold through charity shops.
Pop-up schools - ZANE has funded & set up small classrooms, in church halls, etc, in the poorest areas. This has great potential, and could help many disadvantaged children catch up with schooling. Women are trained to become teachers.
Pensioners living in abject poverty - I visited 5 care homes, and attended 4 other events, in my time in Zimbabwe. I saw how ZANE helps the most destitute pensioners, many of whom would otherwise die, in terrible circumstances (without basic nutrition & medical care), if ZANE was not there to be the helper of last resort.
ZANE keeps alive about 4,000 pensioners, with very basic food & medical help. I met several hundred of these old people, and they generally took my hand, and quietly said "Thank you". To every person, I listened to their life stories, and said that I would tell people back in the UK, and we would help them more. These were hard-working, self-sufficient, people. They don't ask for help, it's the last resort. Many are ex-services (Crown), or war widows. We have a duty to help these people.
I have no connection with Zimbabwe whatsoever. ZANE helps pensioners of all backgrounds. Having met many of these forgotten people, I feel so passionate about trying to help them, with small grants through ZANE.
Discretionary fund - one of the most moving parts of my trip to Zimbabwe, was the AGM, where each ZANE staffer gave a speech about everything they had been dealing with. Nobody cried. Everyone came close. I felt so privileged to be part of this amazing group of kind, passionate people, trying to help the poorest of the poor, with a very limited budget.
Experiencing this for myself, it struck me that we need some discretionary funds. Maybe we could provide that? ZANE staff on the ground know who needs the help, and I've heard numerous cases of how lives have literally been saved, by ZANE providing some diabetes or asthma medicine, that otherwise would not be available, and the dignified OAPs would suffer, and even die quietly. I talked to an old soldier, who had a boil on his neck that was the size of a tennis ball. It must have hurt him a lot, but he didn't mention it once. I winced just looking at it - something that in our world would be routinely removed.
These are wonderful, dignified, old people, of every background and ethnicity, in Zimbabwe. The visit touched my heart, and I hope that the due diligence I did on the ground (I paid for my own flights - ZANE insistence, and I was happy to do so) - might stimulate some interest from UK investors?
I thought that, rather than branding a fundraising with anything, we might call it "UK Investors & Companies, helping Zimbabwe". What do you think? All money put through ZANE.
I spoke to my broker today, and he's happy to sponsor with at least £1k, hopefully more.
Companies, and wealthy individuals, please get in contact, if you would like to help, with a sponsorship arrangement, matching donations from smaller investors. Guideline sponsorship from individuals and companies would be c.£3k+
I'm happy to publicise sponsors, or if you prefer, it can be anonymous. Every penny will help someone in desperate circumstances in Zimbabwe receive life-saving, means-tested help. the great thing with ZANE is that all the infrastructure already exists. So any additional money we can raise, goes straight over the top, directly to people in Zimbabwe who need it for basics.
Between us, I reckon we should be able to raise £100k+ by the end of 2019, and that will literally save a lot of lives.
I appreciate many of you have your own charities already. The reason I'm so passionate about ZANE, is because I saw it on the ground, and can vouch for the amazing work ZANE does,
And I donate c.£3k p.a. myself already. ZANE needs monthly donations really, as then the money can be planned & distributed, because the commitments to recipients are ongoing, not one-offs.
Right, on to small cap shares on Thursday morning (I wrote all the above on Weds evening) ....
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54 comments
Am a monthly contributor to Zane direct, so will continue that way rather than through Paul....but well done you and am sure you will raise the cash. Tom Benyon is a star...follow his daily blog...he and his wife do a walk every summer...this year Canterbury to Oxford......
Thanks also for the heads up on Just Giving....what a set of gougers...will immediiately stop all my donations through them and go direct....a bit more personal admin but worth it.
Where's the report for Thurs. Same old story!
8.00pm and where's the beef?
Any thoughts on ASOS?
Is there an ETA on today's report or will it be tomorrow now?
Paul; thanks for bringing to my attention the detailed work that ZANE are involved in;
I have now gone through all the items listed in the left panel of the Web Site & found the chapter on War Veterans / families that fought for Britain of particular interest & very emotional. As a fit able & active 85 yr old it just brings it home how easily one just recalls their contribution on Remembrance Day..... and How fortunate WE are. ........"Lets we Forget"
Hi guys,
I have been away and as a holder of Cloudcall wondered how their results were viewed on Tuesday. Can see price is down and quickly looked at results on internet. Clear they missed but seems quite positive. I can't see any comments on the thread, did Paul cover it?
Tuesday's SCVR comment 53:
https://www.stockopedia.com/content/small-cap-value-report-tue-16-july-2019-brby-ful-mpac-bag-xlm-492971/?comment=53#53
Argh thanks Skweeka completely missed it. Too much sitting on my desk when i returned. Totally answers my question.
I have supported ZANE for some years now and it a truly excellent charity. I would not object to channeling my own future donations through Paul’s suggested new structure if a benefit accrues to the charity. I would only add that whatever may be set up needs to have the agreement of Tom Benyon, the charity’s excellent boss. My concerns revolve around not upsetting the Charity Commission in the UK and not compromising ZANE’s relationships with the Zimbabwean authorities.
https://en.wikipedia.org/wiki/Rhodesia%27s_Unilateral_Declaration_of_Independence
Morning Paul.
I liked the MMX trading update today.
I like it for the reasons highlighted by Mr Contrarian (HI inline, legacy issue solved with one-off payment and share buyback up to £1million.
Added today.
Your opinion would be appreciated Paul.
Also I agree charity is important.
Michael
Takeover bid for EI (LON:EIG) from Stonegate today at 285p, approx 40% premium. I, ahem, sold EI (LON:EIG) a couple of weeks ago for 50% profit after a break in the steady upwards momentum.
When I bought, they were at about 0.57x tang book. When I sold approx 0.85x, but tang book better validated by the sale of a significant chunk of sites at around the book value.
I guess the lessons for me are 1. There are Ben Graham type deep value situations out there, even in this day and age of internet information, and 2. Hold on until parity with tang book if the business is performing OK (as it was), since there's always the chance of a trade buyer seeing the value.
Don't worry, you weren't the only one who sold EI (LON:EIG) after a big gain in the share price. I would suggest the takeover by Stonegate is bad news for Revolution Bars (LON:RBG) who previously received an offer from Stonegate, who I would presume are now skint and highly unlikely to be looking at Revolution Bars (LON:RBG) now...?
Another up vote for Paul's off-piste sections. If it was all the time, it might irk me. But it's now and again and I have no problem with that.
Paul,
Would you consider using Virgin Money Giving rather than Just Giving? The former are not for profit and charge 2% on donations and whereas the latter are for-profit and charge 5%. Also, and perhaps this is just me, but Just Giving have an unfortunate association with causes such as paying for uninsured Brits who have thrown themselves off a Spanish balcony rather than "genuine" charities.
(Sorry to clutter up the comments section, but this seems the surest way of reaching you. I have donated before and hope to do so again.)
I strongly agree there are better fund-raising sites to use than JutGiving to maximise the amount of donations that actually reach your chosen charities.
I think JustGiving (which trades through Giving.com) has been cleaning up its act by lowering its main fee from 6% to 2% of donations in GBP to UK charities, but it still takes 5% of GiftAid as well. It made £3.5m in 2017 (its last set of accounts available).
There a few look-alike companies making money out of charities but there also a couple of companies that provide a platform on a not-for-profit basis including BT’s MyDonate as well as VirginMoneyGiving which has a page comparing its donation costs with those of JutGiving. Both of these platforms pass on 100% of GiftAid to the charities.
Disclosure - I am a trustee of two charities: one directs donors to MyDonate and the other to VirginMoneyGiving. We receive a lower proportion of donations from donors who use JustGiving.
I concur with this comment. I would like to subscribe as Zimbabwe has a place in my heart from happier times
Reach (LON:RCH) (up 2% today and 9% yesterday) inform us that they are in the early stages of discussions in relation to acquiring certain of JPI Media's assets.
Frankly, it would have been much more surprising if they told us they were not.
More 'interesting'* (imho) will be the interims on the 29th.
(* interesting is a relative term - will they possibly be able to vary from the "in line" as per the last several dozen reports.)
I must admit I have no issue with Paul posting more than he usually does about his personal life, recent share performance and his commitment to ZANE. I find it helps quite considerably to know more not less about people whose share commentary I read, as personal circumstances undoubtedly colour one's analysis and how one interprets different situations.
If you really don't like it, you can hit the "Page Down" button 5 times and completely avoid the personal stuff.
Not too big a problem (at worst) IMHO.
Whilst I can understand people come here to read about Paul's opinions on selected stocks, I think it's important that we maintain the human element within Stockopedia.
I see Stockopedia as a community of liked-minded investors, but we don't only need to discuss market news on this forum. I don't mind talking about charities, macro news, politics with members of this forum as whilst we have shared interest in shares, many of us come from diverse backgrounds. I like learning about charities or whatever else it maybe that wouldn't ordinary come onto my radar.
I think it would be a shame if we just 'kept it professional' all the time.
In line trading update from Strix (LON:KETL) today.
another profit warning from asos £2billion market cap so might be outside the SCVR remit
Hi Paul,
It's a great cause that you're promoting. However, I have an issue with your logic in what you wrote here:
"I've come up with a way of magnifying donations. Here's the idea;
1) Individual donations via a JustGiving page I'll set up
2) Sponsors & Donors (individual & corporate) who pledge to match every donation £ for £ (I've already got one very generous individual who has pledged £3k, and one corporate that has said they will contribute at least £1k). This is before a proper fundraising effort, which I'll get busy doing over the summer. PRs, brokers, and small caps, please get in touch if you would like to contribute.
3) ZANE matching - I met with Tom Benyon, the founder of ZANE, who liked my matching idea so much, he has pledged that ZANE itself will match all the above donations £ for £ .
Therefore, every £1, that UK investors donate to this appeal, will QUADRUPLE (plus Gift Aid), in terms of money that will go directly to help people in distress, in Zimbabwe. 10% for admin seems reasonable to me, so I hope that's OK."
As ZANE is a charity whose sole aim is to help people in Zimbabwe, surely any money that ZANE donates to your campaign is coming out of money that it would have eventually used to help Zimbabwe in another way.
Presumably Zane either has donors who will be willing to shell out extra to match or the charity has reserves which they are willing to access (bank, property, shares) if it gives overall value accretion.
PHTM,please.
I also think Photo-Me International (LON:PHTM) is looking an interesting story. I see SP rates it a SuperStock.
Afternoon Sunday Trader,
What's your reason for interest in Photo-Me International (LON:PHTM) ?
I had a quick look, but too many questions remain:
1 Large photo booth operation with £147m turnover. Declining. Obviously a buggy whip business as it's now very easy to take a passport photo yourself and upload it (as I did recently). I would expect the decline to accelerate.
2 OUTDOOR laundry machine business. Turnover £43.7m & that increased by 19%.
Plus some other lines.
Having skimmed their results, they seem to do segment reporting by country, not business sector. So I haven't managed to directly figure out how profitable the laundrette business is or anything else about the economics of their growing sector.
The presentation also doesn't seem to explain this.
So insufficient transparency for me to evaluate the business.
I also don't understand how much scope there is for growth. I guess the growth is for the minority of people without access to their own washing machine and for washing large items like duvets, which don't fit in the home machines.
It's difficult to figure out how much they can expand this, since all the small towns around here have a proper laundrette.
The laundrettes charge the same price as these outdoor laundries & when I do make a rare trip to wash duvets at a laundrette, the waiting time can be spent having a hair cut or a Costa.
Maybe the outdoor sites have a cost advantage ?
Thank you for your posts re Photo-Me International (LON:PHTM) - sorry I am a bit late responding.
I don't hold, but am interested because
Some puzzles which make the numbers difficult to interpret, as you rightly point out
So, I think it is interesting. I should really have a further go at the numbers - I feel the price could be missing out on the turnaround.
Hi SundayTrader,
I recently renewed my passport with a photo uploaded from my mobile - I'm aware (as a previous shareholder) that it's more than just photos, but I believe that it is in secular decline and will be a drag rather than a catalyst for a rerating.
I remember taking some heat on Twitter when I sold out at 175ish and the SP climbed further, but I'm glad I did and don't intend to revisit.
Wish holders good luck.
Regards,
Sully.
In line and quietly upbeat trading update from NAHL (National Accident Helpline) this morning
Eagle Eye Solutions (LON:EYE) released a positive trading update for year to June. Quite unusually for a growth stock, it has turned adj EBITDA positive in FY19 and generated FCF in H2. It genuinely has a chance of reaching its growth goals without needing to raise more equity. Exceptionally low churn (<1%) - also gives confidence. The downside to the good cash management, is that revenue growth seems to have come in slightly below what Stockopedua reports as the FY19 consensus. (I hold).
I don't really do much for charities although my wife gives to a select few and in particular donkeys! Having said that I can't see why anyone should be bothered about Paul putting forward his ideas for something in which he passionately believes. If you don't like it just skip to the end. Perhaps his concern for others may make some (including me) feel a little guilty. Incidentally Paul, I tried to vote the first adverse comment down but all it did was to add several to the thumbs up so I wouldn't take much notice of that response. I do think the thumbs down option should be removed. I don't know what purpose it is supposed to achieve.
The thumbs up is to praise good posts (interesting content, good points erc).
The thumbs down is to flag up bad posts (spam, needless arguments, rudeness etc)
Both are required.
Anyone getting a large number of thumbs up or thumbs down has probably deserved it. However, there is no point getting stressed out about one or two of them.
I see no problems with Paul making the occasional pitch for his favoured charity. Anyone not interested can scroll down.
Re SDI, my thoughts on reading the RNS were that it read like an ad to solicit company managements to sell up to them. I wonder if that means potential targets are proving more elusive?
ZANE - I wholeheartedly commend Paul for emphasising that there is life outside balance sheets.
One of the reasons that i find the SCVR so useful is that it is not a narrow view of the target market, but ranges into other areas that interest Paul & Graham - and this generates new ideas and demonstrates how human they are..
The average reader of the SCVR lives a lifestyle that is unimaginable to 99% of people in Zimbabwe and it's occasionally good to be reminded of this.
We'll be donating - not sure which route.
Please can you cover Cello Health (LON:CLL) Paul? There is an "at least in-line" statement from them, and the rating isn't that rich.
I have sold my last slice of Scientific Digital Imaging (LON:SDI) this morning as I think the rating is to rich with only 16% eps growth.
I'm with dpshares on the ZANE matter. Whilst I commend Paul for the work he is doing to support this charity, I don't think that the SCVR is the place to do it. Why not start a new thread for this, or a blog on his own website? Both of these could be briefly linked from the SVCR with a one-liner when there is something new to report. Those that are interested could follow the links, those that are not could not reasonably be bothered by such a brief and well-intended diversion from the main subject here.
Very touched to read your about your new Zane project. I was especially touched to read about how small early interventions (the club-foot initiative) can change people’s lives so dramatically. I’m more than happy for you to include this in the SCVR. We are, in my opinion, human beings first and investors second. I will look forward to getting the details of your just giving page.
Julian
Agree with Julian...wholeheartedly
I’ve already set up a standing order to ZANE but will be delighted to do more ...excellent initiative Paul
Very encouraging results from SRT Marine Systems (LON:SRT) this morning.
- Revenue a small beat on consensus (£20.6m vs £20.4m)
- EPS a big beat on consensus (2.36p vs 1.90p)
- Cash in the bank (£3.9m vs £1.6m last year) and big receivables due (£18.0m vs £4.4m last year)
- Massive opportunities in the pipeline, expressed with great confidence (six "which we expect to be contracted in the relatively near future", total value £220m+).
The only material downside is the negative cash flow from operations. However, this would have been eliminated if the £4m+ received after year-end had arrived within the period.
You can't ignore the history of over-promise and under-delivery at SRT, but it does seem that they have learnt from that and, at the current share price, I believe the opportunity looks very much skewed to the upside.
I'm sorry - but this isn't what I personally come here for.
I subscribe to this website and visit this page for financial data, and interesting fiscal documentary. I think that those of us interested in making donations all have our own ideas, beliefs, and charities that we are interested in supporting.
Of course people are entitled to drum up support for charities and causes that they are interested in. It is my personal opinion though that this isn't the right place to do it.
As I said - only an opinion. I look forward to today's financial commentary, I thought the results from SDI were good. I wonder if they will find it less easy to find suitable acquisitions as the group grows in the future, as JDG has occasionally struggled with.
That seems fair enough. For what it's worth, while I have my own charities that I support, I find it uplifting that people feel passionate enough about helping others to use whatever platforms they have to reach people that otherwise may not be aware of the particular issues.
If my positive opinion cancels out your negative opinion, the view from the gallery may be neutral, leaving Paul to chose whether or not to do such consciousness raising pieces.
Back to opinions, rather than an artificial separation of life into neat and tidy parcels (shares here, pain and suffering over there), I personally think it's important that these things DO from time to time encroach on our neat and ordered world, as otherwise they're all too easy to ignore.
I see no problem in Paul's passionate occasional (because it isn't that often) 'ramblings' on ZANE.... but to keep everyone happy, I wonder if it would be more appropriate to actually create a completely different post Paul for your ZANE activities and information so that those moaning about wading through it can just ignore it and those that want to read it can do so - you could always put a summary note in the SCVR and provide a link to it.
I also have my own charities that I support, quite a lot of them in a small way... but there are also many people out there who are too greedy and self-centred and give nothing! If Paul manages to reach out and persuade even one person to give, then he has made an improvement,
I agree, Thank you,
The thumbs down thingy isn't working.
Seemed to work for me just then
(LON:SDI) How do i tag a stock?
Scientific Digital Imaging (LON:SDI) results out this morning - Looks good value for its Quality metrics - Likely to re-rate?
Scientific Digital Imaging (LON:SDI) down 3% on the back of these.
Trouble is I think they are already on a punchy valuation and growth might seem to be moderated in the future. There may not be many tiny companies out there which provide both strategic fit, value for money and a buy price of sub £2m, which is about their ballpark.
Finncap upgrade their target price to 60p today, and we almost reached that earlier this year.
With most holders sitting on very good gains I do think the 60p zone will be the ceiling unless fundamentals improve further. Certainly I was planning on reducing if we got 60p today but looks quite unlikely now.
Final results from £SDI this morning. Look like good results but currently down 3%! Opportunity to buy in perhaps?
Final results from Scientific Digital Imaging (LON:SDI) this morning.
Ben - the above is copied and pasted from your post so you did the right thing. Why it did not work is beyond me.
My morning smallcap tweet: Eve's rose-tinted glasses
eve Sleep (LON:EVE), Cello Health (LON:CLL), Minds Machines (LON:MMX), Aeorema Communications (LON:AEO), Nuformix (LON:NFX), SRT Marine Systems (LON:SRT)
Eve Sleep (EVE) H1 trading: U/L* rev £12.9m down 8%. On course to meet full year loss reduction expectations on slightly lower revenue growth. * excluding countries it has exited. So that's sales ignoring places where we've failed, well, failed more.
ASC warns on sales due to 'transformational' warehouse programmes disruption in Europe & US. Expects transition issues to continue for the remainder of the FY. Guides pretax £30-35m after c.£47m transition costs (previously c.£35m) and c.£3.5m restructuring costs.
Cello Health (CLL) H1 trading strong, Guides FY at least in line with current market expectations.
Minds + Machines (MMX) H1 trading in line, share buyback up to £1m because the SP "reflects neither the stable recurring revenue nor the ongoing growth". Legacy contract problem solved with a one-off payment of c.$5.1m.
Aeorema Communications (AEO) Guides FY pretax over £350k, which is ahead of market expectations (not stated). I don't have a F/C.
Nuformix (NFX) FY includes going concern stmt. Outlook: "we expect another exciting year."
SRT Marine Systems (SRT) slight FY beat with pretax £3.2m vs guidance £3m. Bullish as always.. I hold.
A concise and moving illustration. I'm in.