Small Cap Value Report (Thu 22 Oct 2020) - QTX, SDI, G4M, CALL, CWD

22nd Oct '20 by Paul Scott

73 comments 10086 reads

Good morning, it's Paul here with the SCVR for Thursday.

Timings - mostly done now (14:00), I need a couple more hours to cover everything, so 4pm estimated finish. Today's report is now finished.

Agenda - here's what has caught my eye this morning. There are quite a lot of trading updates, from interesting companies;

Quartix Holdings (LON:QTX) - Trading statement

Sdi (LON:SDI) - Trading update

Gear4music Holdings (LON:G4M) - Trading update

Cloudcall (LON:CALL) - (I hold) - CMD Trading update (and investor presentation on IMC today at 3pm - open to all)

Countrywide (LON:CWD) - Interims & recapitalisation

Trifast (LON:TRI) - Trading update - see tomorrow's SCVR

Frp Advisory (LON:FRP) - AGM Statement - see tomorrow's SCVR

Possibles if there's time: Alumasc trading update, and 1PM AGM Statement

I'll probably take a look at the reader comments later today, once I've finished the main report, so please don't get offended if I don't reply.

Quartix Holdings (LON:QTX)

Share price: 335p (up 5%)
No. shares: 47.96m
Market cap: £160.7m

Trading Statement

Quartix Holdings plc, one of Europe's leading suppliers of subscription-based vehicle tracking systems, software and services, is pleased to provide an update on trading for the 9 months ended 30 September 2020.

This is the key part of today's update -

The Board is pleased to report that it expects revenue and free cash flow for the year to 31 December 2020 to be in line with current consensus market forecasts, which are shown at the foot of this announcement1.

Adjusted EBITDA is expected to be approximately 15% ahead of current consensus market forecasts.

[1] The Board believes that consensus market expectations for 2020, prior to this announcement, were as follows: revenue: £25.8m; adjusted EBITDA £6.9m; free cash flow: £5.2m.

I’m a bit confused as to why EBITDA is up 15% on forecasts, when revenue is just in line. This is not explained in the announcement, but possibly broker notes might add more colour (see Finncap's update note today, on Research Tree).

My thanks to the company & its advisers for including a footnote, stating what market expectations actually are. This is incredibly helpful, and saves us all a lot of time & avoids confusion.…

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TamzinPiworld

22nd Oct '20

Yes, the video and podcast of today's webinar with Andy Brough and Richard Leonard will be published on piworld tomorrow. I'll post a link here. It's a goodie.

email me, and we'll try to resolve for you. Have you tried doing a sound check?

Rusty2

One UK broker has no fees Trading 212, no foreign exchange fees either. But does not cover some shares, most AIM ones for example.

wildshot

I was most impressed by the reduction in debt for GB (LON:GBG) this really is a cash generating machine.

If he is reading this then many thanks to Robbie Burns for mentioning this share back in 2014. It piqued my interest so I researched and dived in. Multi-bagged since then and am happy to hold on, in spite of a high rating since this seems to be great technology, a fabulous client base and hopefully a big take over target for the future.

grumpy5

What's your email please?

HornBlower

Countrywide (LON:CWD) the placing to Alchemy includes up to 17.9m shares (6 for 11) at 135p, 27% discount to last night close of 184p. Gives TERP of 167p, not far off todays close 165p. Or disgruntled holders can tender 10.3m shares (1 for 3) at 180p.

A better deal for Alchemy perhaps(who underwrite the placing for £8m!) but all in not bad for existing holders either given major derisking of balance sheet.

55555

Can anyone help ... Sylvania P is shown as having a dividend yield on Stokopedia of 14%, yet it is paying 1.6pence PA per share with a share price of 65pence. Surely this is nearer 2.5% yield. Am I missing something? Thanks

intuitive6191

"Excuse the naive question but how does a broker make money and pay their bills if trades are free?"

This Bloomberg article gives some thoughts on the US.

https://www.bloomberg.com/news/articles/2018-10-15/robinhood-gets-almost-half-its-revenue-in-controversial-bargain-with-high-speed-traders

Logical David

Hi Tazmin, it was a very enjoyable interview on PIWorld today. Andy & Richard bounce off each other with ease. I thoroughly enjoyed watching it. The interview could easily have gone on for an other hour. Maybe you could arrange another joint interview sometime in the future. I am looking forward to Richard Leonard's interview regarding £NYCT (I hold) next week if all goes to plan.

Sorry, was preparing for the webinar. We're now editing, and it will be published on piworld tomorrow, with a link here.

Email through the piworld contact page here.

samfisher55

I think you are looking at the 12 month forcast dividend yield which is 14%, In the Financial Summary it says for 2020 the yeild is 2.32%

JamesS

Great, thanks

mort1980

Thanks a lot Tamzin. Amazing work.

Hi Tommy,

I am happy to see that that Novacyt Sa (LON:NCYT) held above £11 mark. What's your opinion now if any?

Cheers.

FuzzyHaha

I just don't get why Countrywide (LON:CWD) is becoming investable Paul? With advance apologies to any estate agent....but they're estate agents!

There's no USP that sets them above any other agent. Yes they have some brands that some people will recognise, but if the local Bairstow Eves or Austin Wyatt shuts on your High St, do people cancel selling or buying their house, No , they move along and use the next estate agent along.

Therefore to make them interesting surely they have to stand out from the rest of the rest.

Gromley

I'm not currently invested in Sylvania Platinum (LON:SLP) so not fully up to speed on what they are doing, but I do know that they have been considering windfall dividends based on the "super profits" they have achieved from the market prices of Rhodium & Palladium. So I presume these have been factored into the forecast dividends for FY 2021 (& 2022 - which would seem a bit more speculative).

If they do go for such a dividend it will be in the quarter after the new year - probably announced in the Half Year results around the end of January,

Tommy H

Hi Mort

I am happy that I bought some, they have almost got me back to breakeven for this year :)

Though obviously wish I had bought a lot more!

My holding is ~8% of portfolio so still at a level I can sleep at night, so I think I will continue to hold, though the debate is whether to roll the dice and top up slightly, even if the gains are potentially reduced.

Tommy

ken mitchell

You’re not missing anything. Unfortunately the biggest dividend payers list is inaccurate, There ate a lot of shares shown as paying very big dividends that don’t pay any dividend at all. I questioned this with them ages ago, but those top dividend payers lists have never been corrected.

Paul Scott

All I meant by saying "investable", is that it is no longer uninvestable, due to the balance sheet risk being mostly fixed, due to refinancing. I don't want to buy any shares in it either.

Small Cap Value Report (Thu 22 Oct 2020) - QTX, SDI, G4M, CALL, CWD

Quartix Holdings (LON:QTX)

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Paul Scott

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