Small Cap Value Report (Thu 22 Aug 2019) - ALY, CGS, GDWN, MACF, ARC, SPE, D4T4

Thursday, Aug 22 2019 by
37

Good morning, it's Paul here.

Please see the header above for the list of companies that have caught my eye on my first sweep of the RNS.

Estimated timing for today's report: should be finished by about mid-afternoon. I thought I had a lunch meeting, but just realised that it's been moved to another date, so I've actually now got plenty of time free today to focus on the report here.

Laura Ashley (ALY)

Share price: c.1.8p at close, last night
No. shares: 727.8m
Market cap: £13.1m

Final results - 52 weeks to 30 June 2019

I won't spend too long on this company, as I appreciate that a lot of readers are (very sensibly!) not interested in struggling retailers.

With a market cap down to only £13m, I see the outcome here being binary - either it's heading for 0p and a CVA/pre-pack, like plenty of other retailers. Or, it might be able to survive in slimmed-down size, and online. There's also an interesting angle on the new tea shops being opened, and expansion into China (where I understand traditional British brands are attractive to consumers). Therefore, it's either a wipeout for shareholders, or potentially a multibagger from this level in the unlikely case of things working out well. I suppose a third possibility here might be that the wealthy Malaysians who control the company, might decide to take it private. At what price level, who knows? Bidders for struggling retailers don't tend of be generous - e.g. lowball bid for Bon Marche recently, after that quickly unravelled. The high fixed cost base of retailers means these companies can go wrong very quickly, if they get the fashion products wrong, on top of declining footfall. Higher staffing costs are also killing retailers which might have otherwise survived.

These numbers look pretty bad to me. Key points:

Revenues down nearly 10% to £232.5m (nearly 3% below consensus forecast of £239m)

LFL retail sales down 3.5% - which masks a sizeable difference between fashion (doing well, up 9.2% on a LFL basis), and home furnishing, down an unspecified amount, but it must be a lot. Measures are being taken to improve home furnishings product.

eCommerce sales are also down, which is blamed on technology re-platforming. The drop of 14.2% is very poor - I look for strong eCommerce growth as a key element in considering whether to…

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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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23 Posts on this Thread show/hide all

jonthetourist 22nd Aug 4 of 23
11

"I won't spend too long on this company"

Yes, just a couple of throwaway remarks there. You can't help yourself, Paul!

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andrea34l 22nd Aug 5 of 23
2

In reply to post #506886

Another vote for Goodwin (LON:GDWN) please Paul - the order book up 94% is very promising.

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iwright7 22nd Aug 6 of 23
1

In reply to post #506886

Yes Goodwin (LON:GDWN) looks interesting and also worth noting that they have appointed 2 MD's for their 2 diverse divisions. Greater sales and profit focus for the the future ? 

Due to the diversity of the business and the global reach, the Board has decided to split the role of Managing Director between Mechanical Engineering and Refractory Engineering, such that appropriate focus and energy can be applied to continue growing these 2 important but quite different divisions.

Also note the forward order book  ....the Group has never before been in such a favourable position.

I have taken an initial position today. 

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doug2500 22nd Aug 7 of 23

Interesting price reaction from Sopheon (LON:SPE) today if nothing else.

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Paul Scott 22nd Aug 8 of 23
11

In reply to post #506906

Hi jonthetourist,

I know, LOL! Once I get stuck into the figures, most sections end up longer than I planned!!

Best wishes, Paul.

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Paul Scott 22nd Aug 9 of 23
8

Due to popular demand, I'll add £GDWN to my list of company results to look at today.

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Laughton 22nd Aug 10 of 23

Hi Paul - good to have you back.

Unfortunately:-

https://www.stockopedia.com/columns/paul-scotts-uk-small-cap-value-report-1/

goes to yesterday's report

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Catherine Doig 22nd Aug 11 of 23

why can’t I find the report on Marf?


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Cleeve 22nd Aug 12 of 23

I keep getting logged out on Stockopedia every time I press a share name it just logs me out - anyone else have the same issue?

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rwalford 22nd Aug 13 of 23
2

In reply to post #507126

Me too - something has clearly gone wrong, as it used to remember my login details and now forgets them each time.
Ricardo

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Laughton 22nd Aug 14 of 23
2

I don't get logged out but I do go to the new site view of the share, which I don't like.

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herbie47 22nd Aug 15 of 23

In reply to post #507141

Depends which share, I guess it depends if the poster is using the old or new system, I suspect Paul is on the new system but others are using the old one. So Goodwin (LON:GDWN) I'm still staying on the old system.

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herbie47 22nd Aug 16 of 23

In reply to post #507096

It has not been published yet.

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Laughton 22nd Aug 17 of 23

herbie47 - I think you're right.
Bit confusing though.

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sharw 22nd Aug 18 of 23

You can tell which by hovering the cursor over the link. Those going through on the old site begin "www.stockopedia.com" whereas Paul's links to Laura Ashley Holdings (LON:ALY) and Castings (LON:CGS) begin "app.stockopedia.com"

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Laughton 22nd Aug 19 of 23
8

Ha! Maybe they do if you're viewing on the new site but they don't for me (on the old site). Or maybe it's dependant on which browser you use.

For me - hovering over Paul's link does nothing whereas hovering over your two links gives "Laura Ashley Holdings Share Price ALY" and "Castings Share Price CGS".

Either way - who's got time to be hovering over links. Fortunatley (or not) my subscrioption doesn't come up for renewal until next June so lots of time for the kinks to get ironed out or me to come to terms with the new site which I really don't like on a desktop.

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herbie47 22nd Aug 20 of 23
1

In reply to post #507166

Yes, I'm not keen in going into the new system when I'm using the old one. Some features don't work on the new system yet such as the Goodwin (LON:GDWN) and I can't get on with the replies on the new system.

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herbie47 22nd Aug 21 of 23
1

In reply to post #507171

Hovering over the link does not show me anything, just the company share price.

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brownrigg 23rd Aug 22 of 23
1

What happened to the rest of the reports that were not covered?

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Paul Scott 24th Aug 23 of 23
4

An unknown technical problem emerged with this report, such that every time I try to update it, the new sections vanish.

For this reason, I've had to abandon it, and put updates into Friday's report.

So far, Friday's report now includes sections on Goodwin (LON:GDWN) , Sopheon (LON:SPE) , and D4t4.

I've got other things to do now, but will add further comments on £MCAF and Arcontech (LON:ARC) which will also go into Friday's report later this weekend.

Friday's report is here: https://www.stockopedia.com/content/small-cap-value-report-fri-23-aug-2019-gdwn-esl-eto-stl-d4t4-spe-507301/

Sorry for any confusion or inconvenience. I should have put up this comment earlier, but only just occurred to me.

Best wishes, Paul.

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