Small Cap Value Report (Thu 18 July 2019) - ZANE - placeholder

Wednesday, Jul 17 2019 by
56

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…

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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


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54 Comments on this Article show/hide all

SundayTrader 18th Jul 35 of 54
2

In reply to post #493956

I also think Photo-Me International (LON:PHTM) is looking an interesting story. I see SP rates it a SuperStock.

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Richard Goodwin 18th Jul 37 of 54
2

In reply to post #493966

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.

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Cricketfan 18th Jul 38 of 54
2

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.

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jonesj 18th Jul 39 of 54
3

In reply to post #494061

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 ? 


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Splode 18th Jul 40 of 54
9

In reply to post #494021

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. 

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Sully8786 18th Jul 41 of 54
1

In reply to post #494061

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.

Company: Dave Sullivan - Talking Stocks
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Camtab 18th Jul 42 of 54

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?

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Camtab 18th Jul 44 of 54

In reply to post #494161

Argh thanks Skweeka completely missed it. Too much sitting on my desk when i returned. Totally answers my question.

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Funderstruck 18th Jul 45 of 54
1

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"

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moolahcoast 18th Jul 46 of 54
9

Is there an ETA on today's report or will it be tomorrow now?

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esfinancial 18th Jul 47 of 54
1

Any thoughts on ASOS?

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coleloram 18th Jul 48 of 54
1

In reply to post #494021

I concur with this comment. I would like to subscribe as Zimbabwe has a place in my heart from happier times

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Zoiberg 18th Jul 49 of 54
19

In reply to post #493841

The thumbs down thingy isn't working.

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alanshares 18th Jul 50 of 54
7

8.00pm and where's the beef?

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xcity 18th Jul 51 of 54

In reply to post #494246

Seemed to work for me just then

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Jetman100 19th Jul 52 of 54
5

Where's the report for Thurs. Same old story!

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SundayTrader 19th Jul 53 of 54
2

In reply to post #494111

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

  • Priced as a "buggy whip" business
  • Good cash flow from the declining business - i.e. passport photobooths
  • Active strategy to invest in supposedly profitable and growing niches
  • Existing network of maintenance engineers which can be deployed across multiple niches - a useful moat

Some puzzles which make the numbers difficult to interpret, as you rightly point out

  • The UK photobooth business looks in terminal decline.  However, it seems to be still growing a little on the continent and other territories.  Is this really going to continue?
  • The weight of the business seems to be shifting away from the UK - this makes it harder to validate their strategy.  I think as you do that the niche for outdoor launderettes in this country does exist, but is limited, but I have no idea what the opportunities are elsewhere.  Much the same goes for the juice machines.
  • I would have thought an outdoor laundrette must have a cost advantage - presumably the payments to the site owner will be much less than the lease of retail premises.  I would have thought they are targetting unserved locations, plus choosing sites accessible by car - try taking your duvet to wash at a town centre laundrette - so they can charge the same as an indoor laundrette.  So in theory they could be very profitable as long as they are disciplined about location.
  • I couldn't figure out from their numbers how profitable the new businesses are, and you couldn't either, so how can one value the business?
  • At a very macro level, the costs and availability of automated equipment for various services are falling - in theory they have scope for growth.

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.

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David Brightside 19th Jul 54 of 54
1

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.

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

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