Small Cap Value Report (Thu 18 March 2021) - SIS, EVE, PMP, EMR, GYM, CAPD

18th Mar '21 by Paul Scott

52 comments 10864 reads

Good morning, it’s Paul & Jack here with the SCVR for Thursday.

Timing - This report is now finished.

In case you missed it, I added another section on Science In Sport (LON:SIS) to yesterday’s report in the afternoon. It looks potentially interesting. Here’s the link. The InvestorMeetCompany results webinar recording is now live for SIS, here. I've only watched a bit of it so far, but will report back if there's anything interesting in it.

My diary for today includes a webinar from Eve Sleep (LON:EVE) (I hold) at 13:30 on InvestorMeetCompany.

Empresaria (LON:EMR) is also doing a webinar on IMC at 16:15 today.

I’m so enjoying all these results webinars, it’s great to “meet” management for lots of companies. Small company investing is really all about backing the right people, with the right business models.

EVE has a pretty awful track record, but what’s interesting is that it’s got plenty of net cash, and has pared losses by cutting back on the previously huge marketing spend. It’s trying to develop internet sales. We’re in a bull market, so I thought it could be an interesting punt - very speculative though.

Agenda -

Paul -

Portmeirion (LON:PMP) (I hold) - Review of its FY 12/2020 results.

Eve Sleep (LON:EVE) (I hold) - quick review of FY 12/2020 numbers - a big reduction in losses, and plenty of cash.

Empresaria (LON:EMR) - fairly resilient in 2020, but 2021 recovery sounds hesitant.

Jack -

Gym (LON:GYM) - Full year results dominated by fact that sites were closed for 45% of full year trading days; set to reopen from 12th April

Capital (LON:CAPD) - strong results from this mining services provider, with an equally encouraging near-term outlook

Paul’s Section

Portmeirion (LON:PMP)

(I hold)

572p (pre market open) - mkt cap £80m

The share price chart here looks the same as everything else - plunging on covid in March 2020, then a bounce, flat over the summer, then a 50% gain since Nov 2020. I do sometimes wonder if there’s much skill in stock-picking, when you could have been long practically anything and made a similar gain in the last 6 months!

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ridavies

18th Mar '21

Re Kape Technologies (LON:KAPE) this may sound a bit like sour grapes because I sold out at around 200p just before the most recent acquisition. However, I am very influenced by and a great admirer of Leon Boros. At the Mello Bash on 25.1.21, he was extraordinarily negative about the company; its ownership; the huge figures for revenue growth, high levels of EBITDA quoted and not matched by cash flow or return on capital. Looking further into the balance sheet, there are some very unusual figures such as deferred marketing costs. I may have lost a very significant opportunity here, but I feel very comfortable about being no longer invested in this stock. All IMHO of course.

barnetpeter

Strong move by Quiz (LON:QUIZ) today. Close to a 52 week high although nothing much on a historical basis. I read today that a ton of cash is waiting to buy anything and everything as soon as the High Street opens. Not long now! Credit card debt is DOWN 19.3 per cent in a year (courtesy the Money Charity statistics). Never known that before! Buy now pay later seems to be everywhere too.

JCPr

(I hold). What I've suspected has been holding this share back is the Centamin contract. It is such a large part of future revenues that it really is make or break.

Rusty2

People have been buying online. Some shops are open because they sell "essentials" such as toilet paper.
Will be interesting to see where the money goes.

dealtn

Jack actually.

Martin VT

For you followers of PGM shares Tharisa (LON:THS) and Sylvania Platinum (LON:SLP) - I notice that Palladium is up 4% today to over $2700, following the previous rises in the last few days from $2350 since announce re the impact of the flooding problems in the Nornickel Russian mine.

Palladium up 8% now but that is a small part of Sylvania Platinum (LON:SLP) production?

Rhodium price is far more important and that has fallen back slightly.

JohnEustace

Rhodium is also up 8% today.

At this level rhodium is expected to account for half of all PGM revenue in South Africa.

Bullygig

Apologies, Jack!

falsegods

I've noticed Boohoo (LON:BOO) (I hold) are making a bit of a push in signing up some reasonably big sports names to sponsorship deals - Jon Jones recently signed up to a one year deal and will have a pretty big following both in the UK & US. A great move imo

Also agree there is great opportunity for growth once lockdown eases with people wanting to cheaply refresh their wardrobes ahead of holidays, nights out, festivals etc

Actually I think Sylvania Platinum (LON:SLP) produce approx twice as much Palladium (24%) as Rhodium (12%). Rhodium’s huge price rise the last couple of years distorts, as it produces so much of the profit. That said, the broker estimates had Palladium down for this year at $2k - $2.4K and Rhodium at $15k - $20k. With Pd at $2.7k and Rh at $27k....it’s possible estimates may need to be raised!
(Broker estimates dated Jan 2021, from Sylvania Platinum (LON:SLP) interim results).

Dojosan

£CAPD @JCPr - I beg to differ on this point IMO, What has been holding back the SP is the ex shareholder CB selling out his shares. How many left? Not known. There is another fund (check out recent RNS, who is also selling out). Obviously the act of selling out in this case has nothing to do with the underlying business performance. CB has been selling since Oct 20.

So the situation is similar to Tharisa (LON:THS) - with if I am not mistaken Fidelity selling out their position and in £ORPH - Invesco selling. Let's hope in all 3 cases (I hold all 3), the dam will bust soon!

rbiggs91237634

It's still 23.7% of their prill production, Rh more important yes but not a 'small part' imo

Ok, do you have a breakdown of revenues and prices. Rhodium is now around 10x the price of Palladium.

Albertos

https://www.miningmx.com/top-story/45622-soaring-rhodium-price-will-contribute-half-of-total-sa-pgm-company-revenues-in-2021/

All the PGM producers are now totally Rh dependant - price falls occasionally on "buyers strikes" but comes back because it is very hard to substitute and in supply deficit. To me it doesn't matter whether you're in Jubilee Metals (LON:JLP) , Sylvania Platinum (LON:SLP) or Tharisa (LON:THS) (or others) just keep an eye on the Rhodium price and the demand /supply balance - nothing else matters.

dcon85

https://www.sylvaniaplatinum.com/component/jdownloads/send/84-2021/529-hy1-fy2021-presentation

19th Mar '21

Thanks but I can’t open that link.

shanklin100

Hi Jack

Thank you for your write-up on Capital (LON:CAPD) . Here's a link to the latest Tamesis Partners article. Its free to access but registration required.

Https://www.tamesispartners.com/research-portal#/portal/tamesis-partners/research/02461d34-5f21-4f56-aa54-d51403022041

Their note starts

FY Results – Strong on Every Level
Target price: 127p

P.S. Its probably pretty obvious, but I am currently long CAPD.

Zipmanpeter

(Shein) helped (inits fight with BooHoo et al) by the fact it's China direct and postage is subsidised by the UK tax payer.

This must be a bit of a LT risk for Shein - its removal is an obvious politically savvy green 'Brexit bonus' tidy up. It was created when China was much poorer and much less was online.

(A theme I keep raising is the risk of innovative green stealth taxes - dressed up as to save the environment but in reality to fill tax coffers with breaking election pledges. I support them BTW!)

26th Mar '21

Link to this tweeted by Capital (LON:CAPD) overnight. Essentially seeking to highlight that West Africa is a sweetspot for them... ...and presumably that their SP is completely wrong :-)

https://www.capdrill.com/news/white-paper-exploration-boom-in-west-africa-opportunity-or-challenge

Small Cap Value Report (Thu 18 March 2021) - SIS, EVE, PMP, EMR, GYM, CAPD

Paul’s Section

Portmeirion (LON:PMP)

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Paul Scott

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