Good morning, it's Paul & Roland here today. Today's report is now finished.
Agenda -
Paul's Section:
Beeks Financial Cloud (LON:BKS) (I hold) - another big (for the small size of company) contract win. This quarter has now delivered record contract wins, of 3 times the previous record quarter. Something big is happening here, so despite it being difficult to value, BKS is becoming a top conviction holding for me, as a long-term investment.
Surface Transforms (LON:SCE) - a large increase in its contract with (possibly) Tesla, for ceramic brakes. This looks like a genuine game-changer for the company, although at nearly £100m market cap, a lot of the upside is already priced-in. In more bullish market conditions, I could see this share going higher. Execution risk is considerable, going from negligible revenues, to mass production.
Mccoll's Retail (LON:MCLS) - as mentioned before, I think existing equity is now almost certainly worth nothing. Departure of the CEO today looks like it's imminently game over for existing shareholders. The business looks likely to survive, but with new owners, and reduced debt, I imagine. Please don't buy these shares, imagining it might multibag! You'll almost certainly lose all your money within days or weeks.
Activeops (LON:AOM) - my first look at an AIM float from H1 of 2021 (a terrible period for over-priced, opportunistic floats). Today's trading update for FY 3/2022 looks OK, in line with expectations. The 17% drop in share price seems harsh, with only a couple of minor negative comments from the company. Trouble is, it floated at a gross over-valuation. So I think it's likely to continue falling, because the starting point was so high. A loss-making, moderate growth company, valued at £70m, is not going to appeal to many people right now.
Roland's Section:
Sopheon (LON:SPE) - Software group Sopheon has delivered another year of revenue growth and reports some promising KPIs. But profits continue to fall despite strong cash generation. I’m not convinced the pace of growth justifies the valuation here.
Kin And Carta (LON:KCT) - strong organic growth, with half-year revenue up 59% like-for-like. However, this pace is expected to moderate in future years and I have concerns over the quality of profits and cash generation. I’m struggling to see much value here.
