Small Cap Value Report (Thu 29 April 2021) - CCT, ITS, XSG, PHD, STVG
Good morning, it's Paul & Jack here with the SCVR for Thursday.
Timing - TBC
Agenda -
Paul:
In Style (LON:ITS) - trading update for FY 03/2021 which is very light on numbers, and vague re profits. I'm sceptical.
Xeros Technology (LON:XSG) - pitiful 2020 results from this serial disappointer & big cash burner. More jam tomorrow is promised for 2021, with licensee products about to launch. So fingers crossed it might finally succeed, after 7 years of failure on AIM. Has enough cash to end 2022, after another placing in March 2021.
Proactis Holdings (LON:PHD) - a quick look at interims from this software company. Signs of improvement, but the big issue is the awful balance sheet. Management hint at a fundraising. I'm steering clear until the debt is reduced through a placing.
Jack:
Character (LON:CCT) - strong recovery from the Peppa Pig and Goo Jit Zu toymaker, with FY underlying profit before tax expected to be materially ahead of £10.5m market consensus.
Stv (LON:STVG) - advertising recovery 'ahead of expectations' & advertising revenue for 5m to be 'broadly' in line with 2019 levels. Interesting market position as one of Scotland's biggest free-to-air TV channels, but viewer habits are evolving and the group has struggled to generate meaningful top line growth over the years.
Paul’s Section
In Style (LON:ITS)
259p (up 4%, at 08:36) - mkt cap £136m
29 April 2021 - In The Style, the fast-growing e-commerce womenswear fashion brand with an innovative influencer collaboration model, is pleased to announce an update on trading for the 12 months to 31 March 2021 (the "Period") following its successful Admission to the London Stock Exchange's AIM on 15 March 2021.
This is laughably called a trading update but it’s more of a PR release, cherry-picking some positives, and not telling us anything specific about profitability.
Strong momentum and strategic progress continued since IPO to deliver very strong FY21 performance
What does “very strong performance” mean? With no numbers on any profit measure provided, then we’re in the dark. What one person might consider very strong, someone else might be disappointed with.
I had a quick look through the AIM Admission Document and reported here on 15 March 2021. My take on things was sceptical, since ITS had previously been loss-making every year, and in my view too small to compete effectively with the Boohoo (LON:BOO) (I hold) multi-brand behemoth, plus other much larger competitors such as MissGuided (also rumoured to be preparing a float).
ITS admission document showed that it had performed exceptionally well in the 9 months to 31 Dec 2020, generating £35.4m revenues and a maiden profit of £2.0m for that 9 month period - benefiting from lockdowns of course, and also I reckon probably a big boost from a TV documentary profiling the company, called “Breaking Fashion”, which was highly entertaining, and showed the fast-moving chaos and competing egos which are so typical of this sector, as I know only too well!
A similar TV documentary on MissGuided provided a major boost to sales, hence why I think the same may be true of ITS. That’s a big risk factor, as it could mean that the boost was a one-off, and could prove to be unsustainable growth. Hence why I’m sceptical. That hunch is reinforced because the company took advantage of this bumper period of trading to do a well-timed IPO which involved mainly (£49m out of £60m IPO proceeds) going to a selling shareholder. £11m was raised for the company, which had never previously generated any meaningful cashflow itself.
This is such a crowded space, it’s very tough for smaller companies to compete - they can’t afford the best social media influencers, or the big marketing spend. No barriers to entry, but huge barriers to achieving scale, in online fashion.
Also, how will ITS hang on to the best staff, when there are far better financed competitors on its doorstep, who can poach the best people with remuneration that ITS would struggle to match? Staff loyalty only goes so far.
Going back to the trading update -
Strong sales momentum ahead of prior expectations since the Group's Admission to AIM…
Turnover for the Period, subject to audit, expected to be no lower than £44.5m, an increase of more than 130% from the prior year (FY20: £19.3m)
I don’t know what those expectations were.
Digging deeper, deducting £44.5m turnover for FY 03/2021 from the £35.4m reported in the admission document for the 9 months to 31 Dec 2020, gives £9.1m turnover for Q4. That’s down from the £11.8m average sales in the quarters 1-3. This was a period when physical shops were closed, in lockdown 3, so it doesn’t strike me as a particularly strong Q4, although Jan-Mar is the quietest quarter of the year in fashion retailing, and there were no events to go to, plus the weather was cold & miserable for most of that time this year.
Overall then, despite the big PR effort to talk things up, I’m not particularly impressed with this update.
Various other points are mentioned, the one that stands out to me is the dramatic move to customers using its App - up from 19% last year, to 55% this year. Suggesting that fast fashion customers are browsing & buying on the move, anywhere, and at any time.
Cash (net? we’re not told) is £11.9m at 03/2021. It raised £11m before fees in the recent IPO, so not much difference there. In my view, ITS is way too small to be generating any meaningful cash for some time, if ever.
The lovely Stacey Solomon (here are her best bits, including unfeasibly bright, bleached teeth, possibly visible from space!), and ASDA, are the latest influencer & commercial tie-ups. I think this helps demonstrate how ITS goes for a softer, less edgy (I was going to say “tarty” but might have got into trouble for using that word, not sure?) type of product & customer, than the BOO brands & Missguided. So maybe there is a niche for ITS?
Furlough monies repaid to the Govt - well done!
Outlook - vague -
"We look forward to building on this momentum into FY22 to deliver our growth plans and create further value to all stakeholders"
My opinion - a poor update, with lots of positive talk, but hardly any specifics. The market expects better than this. The company needs to grow up, and look to the gold standard of reporting from Next (LON:NXT) - that’s what it should be emulating, not buffed-up PR releases. The risk is that they’ll talk up the share price to unrealistic highs, suck in gullible investors, and then see the price crash if they disappoint. That’s not the right way to do it. Companies should under-promise, and out-perform, giving realistic guidance. That’s the way to build trust with investors.
I remain sceptical about InTheStyle. There has only been one decent year in the company’s history, so I’m waiting to see if it can build a sustainable track record. The upside case is that, if this becomes another Boohoo (LON:BOO) (I hold) or Asos (LON:ASC) (I hold) then it could be a 50-bagger from here. What’s the likelihood of that actually happening though? Pretty slim, I would say, and it would take a long time to grow from £44m turnover, to >£1bn.
I’ll keep a watching brief on it, but at the moment, am not tempted.
.
Xeros Technology (LON:XSG)
275p (down 1% at 11:28) - mkt cap £65m
Xeros Technology Group plc (AIM: XSG, 'the Group', 'Xeros'), the developer and licensor of platform technologies which transform the sustainability and economics of clothing and fabrics during their lifetime, today publishes its audited results for the 12 months ended 31 December 2020...
major licensing progress...
There’s no sign of any progress at all in the actual numbers.
Xeros has been promising jam tomorrow since it floated on AIM in March 2014. The original business model of burning through large amounts of cash & trying to manufacture these low water washing machines (that use polymer beads I understand) didn’t work, so they pivoted to a licensing model.
Revenues for 2020: a paltry £0.4m!
Post-tax earnings: loss of £(7.0)m, down from £(20.6)m in 2019, includes the benefit of a £0.7m negative tax charge
Placing of £9.0m done recently March 2021, so post year end cash position looks OK for now -
As of 31st March 2021, the Group held cash of £11.7m with our ongoing rate of cash expenditure fully reflective of that of the asset-light and IP-rich licensing company that we are. We believe that this level of funding is sufficient to reach month on month cash breakeven by the end of 2022, assuming current and future prospective license partners activities go to plan without further major disruption from the Covid-19 pandemic…
Cash burn run-rate down to £0.4m per month in second half of 2020.
2021 is make-or-break time, I think. It remains to be seen if these licensee product launches are going to make XSG a viable business, or not -
Multiple licensees entering/ready to enter markets with XOrb™/XDrum™ technologies….
£9.0m raised to execute current license contracts and win additional contracts in targeted geographies.
My opinion - I’ve watched Xeros disappoint time & time again since it floated in 2014. It’s also burned through a large amount of investor cash. Will it finally work, with the imminent launch of products by licensees? I’ve got no idea. If it flops again, then the company would probably be thrown out of the last chance saloon.
Why would I want to gamble on a serial failure, suddenly succeeding?
We're in a bull market though, when people like gambling on this kind of thing, but to me, the story feels very stale now. Good luck to holders though, every now and then something blue sky like this does actually work. Not often though.
.
Proactis Holdings (LON:PHD)
44p (unchanged, at 12:08) - mkt cap £42m
A shrewd friend recently told me that I should have a look, with fresh eyes, at Proactis. His idea is that the client losses due to a botched takeover, have now happened, and it could return to growth.
I’m running out of time, so won’t regurgitate the detail here.
Interims are in line with management expectations.
There does seem to be some sign of progress, with churn rate normalising, and EBITDA up 10% to £6.2m in H1.
There’s a gulf between EBITDA and profits though, with a profit before tax of £(3.0)m loss.
Capitalised development spend in H1 was £4.2m
Balance sheet is still the deal-breaker for me, it’s just awful, when you eliminate the intangibles - heavily negative, and with far too much bank debt.
My opinion - I’ve seen enough to work out that it’s too risky for me.
I’d want to see a major sort-out of the balance sheet, through a big placing, to repair the damage from poor acquisition(s). Management says in the outlook section that it wants to “address the capital structure”, which is code for an equity fundraising, I’d say.
Might be interesting, once the necessary equity fundraising has been done, but too risky for me before.
.
Jack’s section
Character Group (LON:CCT)
Share price: 485p (+2.75%)
Shares in issue: 21,379,781
Market cap: £103.7m
Character (LON:CCT) is a toy company. The Ranks have always been strong here but an obvious risk comes in the form of its toy licenses.
It does not own some of its biggest hits and shareholders were reminded of this when Hasbro announced plans to buy Entertainment One, which raised questions over Character’s ability to retain one of its most important toy licenses.
Since then, it has announced the extension of its Peppa Pig wood products licence until the end of 2023 - that’s still not a great deal of clarity but perhaps that’s just as good as it gets here. In which case that should be factored into the valuation of the company.
The shares have recovered strongly, so investors have been rewarded for keeping faith.
There were other dynamics that contributed to profit warnings back in 2019/20: the collapse of its largest Scandinavian customer, Brexit uncertainty, and a weaker sterling against the dollar were all quoted as reasons for underperformance.
My impression is that Character is well run. The managers bought shares at the time of these warnings and so presumably believed these issues would pass. But the business model will always bring risk with it and future operating volatility should be expected as the group continues to tend to its portfolio of licenses.
The group says:
We expect the 2021 full financial year's underlying profit before tax will be materially ahead of the published market consensus of £10.5m.
First half highlights:
- Revenue +44% to £74.5m,
- Underlying operating profit +168% to £6.1m; underlying diluted EPS +140% to 22p,
- Profit before tax +245% to £7.6m, diluted EPS+235% to 28.67p,
- Dividend per share up from 2p to 6p,
- Cash and equivalents has more than doubled to £34.9m, net assets +21% to £39.6m.
There is also a £2.02m profit on sale of property (the Vernon Mill freehold, in January 2021).
This looks like a strong comeback from Character Group.
The Scandinavian business has returned to profit and the group also says it has ‘one of the strongest portfolios that it has ever taken to both domestic and international markets’ and is therefore hopeful of a strong second half into the all-important Christmas period later in 2021.
Character's top brands have all shown significant sales growth. These include Goo Jit Zu (now the group's number one brand and is ‘penetrating all major markets’ with distribution in over 40 countries to date), Peppa Pig, Pokémon, Little Live Pets, Shimmer 'n Sparkle Instaglam, Stretch Armstrong, Fireman Sam, Scooby Doo.
All of these names, according to the group, are out-performing expectations. Either the group’s current portfolio is just head and shoulders above the competition, or there may be a lockdown-related tailwind to consider. Parents and kids both at home for weeks on end… I’d be buying a few more toys to keep the peace.
You’ve got to appreciate the bizarre names often associated with Character: it has been appointed Master Toy Partner by Moonbug Entertainment for its My Magic Pet Morphle brand. If anybody knows what a Morphle is, please do enlighten us.
Aside from that, it’s business as usual with new product range launches planned throughout the summer and into the autumn in order to keep the toy portfolio fresh.
Conclusion
This isn’t the most robust business model in some senses but the UK is the fourth largest toy market in the world and Character is one of the best in its class. And it is very cash generative. The cash pile is now some 163p per share and the average shares in issue are trending down over time.
With finances like that, I would back CCT to be able to navigate future tricky periods.
I was hoping to buy some before the recovery, but I’d been waiting for evidence of buybacks at lower levels over the past year.
The group has a history of buying back stock, and it makes sense that the team would take advantage of short term weak prices to ramp up this programme a bit. That never happened and I took that as a potential sign of ongoing struggles.
It looks like that couldn’t be further from the truth. There will always be risks and volatility here but there’s a good management team that has been in place for quite some time.
The growth seen in these results is forecast to continue through to and beyond Christmas 2021 and Character is ‘on target to deliver the best performance in any calendar year in the Group's history.’
Hopefully, that performance will be further enhanced with the reopening of non-essential retail shops in the UK in the months ahead.
STV (LON:STVG)
Share price: 351.5p (+0.57%)
Shares in issue: 46,723,000
Market cap: £164m
Stv (LON:STVG) is Scotland’s leading digital media brand. Its free-to-air broadcast channel reaches 3.2 million viewers each month and is home to the likes of Coronation Street, Emmerdale, and I’m a Celebrity... Get Me Out of Here.
As with so many stocks right now, we are seeing a concerted share price recovery here.
STV is worth monitoring due to its content and market position. It’s in a privileged spot as one of Scotland’s main free-to-air channels.
There’s a brief trading update today, so worth quickly touching on.
Advertising recovery ahead of expectations; positive future outlook
It’s a brief update so we can summarise it pretty much in its entirety:
- Advertising trends are improving and STV's January-April total advertising revenue (TAR) is +10%, ahead of previous guidance of +7-9%.
- STV-controlled advertising continues to outperform the wider market, with regional advertising revenues up 12% in the first four months of the year.
- Video on Demand advertising on the STV Player continues to see strong growth, up 26% across January-April. 8 consecutive months of growth since August 2020.
- STV's record viewing performance has continued into 2021, with TV viewing up 12% in Q1 and STV now the most watched TV channel in Scotland for the first time since 2006.
- Online viewing was up 73% in Q1 and streams up 98%, with STV Player the fastest growing broadcaster streaming service in the UK.
- In terms of the outlook, STV expects advertising revenue for the first 5 months of 2021 to be ‘broadly in line’ with the same period in 2019.
- STV will broadcast over 20 live and exclusive Euro 2020 matches featuring both Scotland and England this summer.
- STV Studios also remains on track to deliver its most successful year yet, with revenues of £20-25m already secured for 2021.
Conclusion
This looks potentially interesting, with advertising revenues expected to quickly return to 2019 levels.
Meanwhile, the group has taken share and has the most watched TV channel in Scotland, along with the fastest growing broadcaster streamer service in the UK.
After months of lockdown, I’m sure we’re all painfully aware of the rise of Netflix et al and a fundamental shift in television consumption habits. Is this a risk to the group’s older free-to-air broadcast advertising revenue model, or is it more of an opportunity for its growing streaming service?
These streaming services are a potentially attractive way to more effectively monetise old content. They do say content is king and STV Player-only content has made up 40% of all streams so far this year. STV Studios is also currently producing 15 series for 11 different networks.
There are some interesting names on the Major Shareholders list - Slater Investments for a start - and it’s (just about) got a single digit forecast PE ratio, along with a useful c3% forecast yield.
Probably worth a closer look, although STV’s position in an evolving market requires some thought, and the group has struggled to generate meaningful revenue growth for a long time.
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67 comments
Thanks for the write up on Xeros Technology (LON:XSG) Paul. I share your lack of enthusiasm for this one.
I first looked at is as it was one of Woodford’s Patient Capital IT investments. The story was good but it quickly became apparent that those that trialled the machines didn’t go on to buy more of them so clearly the ROI was not good enough.
I think that it may eventually do just about alright - they are producing tech/products with a genuine need. So, I wish them well. But as an investment it seems like it has been an unmitigated disaster and has no hope of becoming a resounding success.
On 30 January 2020, Tclarke (LON:CTO) announced a “strategic partnership” with Gooee, in the form of “a 5 year UK exclusive agreement … to sell, install and maintain the revolutionary Gooee suite of smart building products”. The announcement also advised: “As part of this agreement, TClarke has made a small but strategic investment in Gooee”.
https://www.investegate.co.uk/tclarke-plc--cto-/rns/strategic-partnership/202001300700043401B/
At the time of that investment, the latest set of published accounts for Gooee, which were the unaudited accounts to 31 December 2018, showed it to be technically insolvent, with negative total equity (shareholders’ deficit) of £5.7m. The movement in the ‘profit and loss account’ line on the balance sheet indicated that a loss of £2.1m had been booked in 2018.
On 21 July 2020, CTO published its interim results to 30 June 2020. These quantified the Gooee investment at £2.0m and it was recorded as a non-current asset in the balance sheet accordingly.
https://www.investegate.co.uk/tclarke-plc--cto-/rns/half-year-report/202007210700055447T/
On 14 August 2020, Gooee published its accounts (unaudited again) to 31 December 2019. These showed a further severe deterioration in Gooee’s finances, with an apparent loss of £7.5m in the year taking the shareholders’ deficit to £13.2m.
On 24 March 2021, CTO published preliminary full year results for 2019. In these, the £2.0m investment in Gooee had vanished from the balance sheet, replaced with a £2.0m write-off against retained earnings of ‘minority shareholding equity investment’. This was reported in the ‘consolidated statement of changes in equity’, thus avoiding the income statement. There was no explanation of this in the prelims.
I emailed Trevor Mitchell, the CFO, on 29 March to enquire as to the change in accounting treatment of the Gooee investment. I received a reply from his Executive Assistant, giving the following explanation:
“Under international accounting standards we are required to fair value our investment at year end. This is very difficult when it comes to unquoted investments and so we took the decision to carry the investment at zero and let any profits from our offering go through the profit and loss account as and when they arise”.
My response to this was:
“Thank you for this prompt response. By way of feedback, given the materiality of this management decision, I do believe that it should have been specifically identified within the “Group financial review” section of the full year results statement. Its omission makes it seem like it is a subject that management preferred not to address directly. I am sure that is not the case in practice, but it is important not to give this impression, even inadvertently”.
On 28 April, Gooee entered administration.
https://find-and-update.company-information.service.gov.uk/company/08495558/filing-history
The sequence of events set out above do not sit at all comfortably with me, and I have sold my entire holding in Tclarke (LON:CTO) today.
I hold CTO.L.
It has cash of £25m so a £2m write off is not a lot.
CTO must have known Gooee was a turkey (or a goose) from very early on.
CTO has probably learned from being burned by all this.
Anyway, I saw a TClarke white van at a nearby building site last week.
That heartened me.
PS.: The idea of getting to zero CO2 for buildings (if anyone at all is bothered) may help TClarke.
Re an old favourite, ...or not, I notice that Boohoo (LON:BOO) have been doing a very nice soft opening of Debenhams. First noticed, when my wife went ‘oh wow’ when she tried the difficult, sluggish, old Debenhams website, and instead up popped a shiny, new and slick, Debenhams website with a range of clothes brands. Now a few weeks later, they have kids clothes (including what appears to be a Debenhams brand, Blue Zoo, with some cute small kids clothes) bedding (again some bedding appears to be own brand) other household, lots of women’s underwear (much of it under what appears to be a Debenhams own brand: Gorgeous), loads of perfumes (covering a wide range of brands) and they are also beginning to put make-up on the site. It seems new lines are being added everyday, so by the annual results in May, the store should be pretty much fully kitted out.
So, when we look at Boohoo (LON:BOO) in the future, how much will sales of new own brand goods bring? How many more own brands will be developed, eg household, make-up, or grooming products? How many new lines of product will be added to the Debenhams website? And will it all be profitable?
I suspect I can guess the answer to the last question, but it will be interesting to see how the others develop.
Martin
I hold Boohoo (LON:BOO)
Had a look - horrendous for mens clothes. I used to rely on debenhams for my twice yearly ordering of a ton of t shirts and shorts (mainly Rocha) but my choices now are burtons or boohoo men being modelled by a guy with half his head tattooed. Lovely. I now feel every one of my 50+ years.
I'm considering buying into JPMorgan China Growth & Income PLC (JCGI) after reading Edmund Shing's comment on 28 March 2021:
"I also like to look at the JCGI and FCSS investment trusts, which have impressive long-term growth records."
According to the II chart screen, a Bottom Triangle - Bottom Wedge Intermediate-Term Bullish signal was generated on 28 April 2021:
Volume 200,663
Close Price 687.00
Target Price 802.00 - 830.00
Pattern Duration 37 days
Inbound Trend Duration 30 days
Thoughts welcomed.
Hi turbo.
(Appreciate these ITs are not really SCVR territory but hey, ho .....).
Both the JCGI and FCSS IT’s are well established and give good access to the Chinese market. I’m not knowledgable or brave enough to take individual company exposure to China (although recent IPO small cap Samarkand (OFEX:SMK) has taken off like a scalded cat in the last couple of days) but feel it’s a market investors can’t really ignore. I agree with Edmund that these two ITs are a good vehicle for investing here. I also hold a bit of the Janus Henderson China Opps OEIC which has done well too but is a laggard by comparison to these two ITs.
I‘ve held the Fidelity IT for a few years, buying into the hype when Anthony Bolton kicked it off and have been with it since despite a few early teething problems and have topped up from time to time including after the recent dip. A quick direct comparison between the two suggests over the longer term (3 to 10 years) the JPM fund has had significantly better returns but has tended to be a lot more volatile. Fidelity has done better over the past 18 months or so and seems to have already recovered from early year doldrums while JPM has yet to do so. If you think they will get their Mojo back they could well be the better buying opportunity. Here are the 10/3 year and YTD comparisons.
Gus
I need to gather my thoughts on China...
3 problems:
1. Renminbi is an exchange controlled currency, with, I believe, a cap on how much China currency can be converted to Foreign currency. And so its hard to peg its true value: It is both over-valued and under-valued. There is a rising middle class wanting to buy foreign goods, "silk-road" expansion world-wide, and obviously China's "trick" is its massive exports. Its (to me) mysterious.
2. China controls who owns Chinese companies, with The State maintaining controlling shares in all companies. Foreign investors are only permitted to be minority shareholders, and The PLA are no fools, unlikely to relax this in the short term.
3. The bogeyman is China is Communism emulating Capitalism but with some complex Chinese Communist Party and PLA controls in the background leading to corruption and dodgy practices.
Bonus points
4. The Internet isn't really free there and there's a sophisticated State surveillance programme that makes The UK, US, EU countries jealous.
As a Sys Admin, I've noticed that when someone fires a URL at my servers from China, we then quickly get copy requests from other IP addresses within seconds. I notice cyber-attacks, probes, and weird internet behaviour regularly from that block.
5. Geopolitics: Taiwan, South China Sea, China military expansion, India border, and as a side-show Hong Kong.
There's a big China story coming over our lifetimes.
Hello. Re Jpmorgan China Growth & Income (LON:JCGI) Im sitting on a loss at the moment, though that loss has halved in the last few weeks. Clearly bought at the wrong time. I thought that China had won the C 19 war and they would come out of this best. Against my better moral judgement I bought in (I blame them and their horrendous wet met market customs and use of wild animals for eating, pets etc for C19 and similar potential outbreaks in the past and likely to continue in the future). However, it haunt worked out for me that way. Anyway, glad I held as the loss sinks down and down and hope the Edmund Shing - a great fan of his - forecast turns out to be correct.
UK_Investor's comments - Some ISA movements (so no draw down):
Plus500 (LON:PLUS) - Bullet dodged: Got off @1540p, now 1406p. I think Investors will want to come back when it gets a little lower, perhaps another -7.5% or so.
British American Tobacco (LON:BATS) - Stubbed this out today @ 2643p, thanks for the profit and Dividend for 2 months investment. It may be worth another look when it falls to 2500p.
Sylvania Platinum (LON:SLP) - Added the above proceeds, pre-earnings announcement, bringing me up to about 9.5% of my holdings. Looking for long term quality and growth given the big sum I've now put in, most within an ISA tax shield.
Small holdings of bitty-small shares tend not to interest me these days. Holding just 7 shares now with a purpose, until a better rational appears.
SCS (LON:SCS) - I am bowled over by SCS's recovery, +37%.
International Personal Finance (LON:IPF) (41% of my holdings) has held up on its earnings release today +5%. I am +87% on this and looking towards a long term holding and future yields, so keeping away from the sell button. (My ISA holding is +108%.) The Management seem to be competent and steady.
XLMedia (LON:XLM) - results on Tuesday were "meh". £1M profit - so effectively notional for 2020. Its entirely about whether growth and return to profit is delivered in 2021, which indications suggest that is a probable of the two scenarios. XLM's value of 66p last week and 54p today is a little bitter sweet, but I think it shows where XLM will end up once it delivers.
Have a nice day - and try not to lose any money!
How does this post add value to this board? Why don't you set up your own page somewhere else rather than muddy this one with your self congratulatory nonsense?
Cheers
Francis
UK Investor is most comfortable indeed with the performance of his investments and indeed businesses, and encourages other investors to utilise the Stockopedia data set to evaluate the companies commented upon, making their investment decisions where judged wise.
My wish is to spread wealth and happiness to my fellow humankind. Good luck. Hope it works out well for you.
Hi UK_Investor,
I don't mind your posts, so please ignore self-appointed policing and keep posting what clearly some people find useful.
I hope you take up Francis's excellent suggestion to set up your own post and explain further your investment process and outcomes to spread wealth and happiness to our fellow humankind.
All the best
BSV
Hi Jack
Thanks for the write up on £STV. I don't hold, but hopefully the positive news on advertising trends will read across to Itv (LON:ITV) in which I have a reasonable sized position. I noticed that a non executive director bought close to £100,000 of shares at £1.20 on 12th April.
I have naively held it through thick and thin and badly misjudged the impact of on-line advertising on the company. Despite this I added at around the lows last year on the basis that the jewels in the crown, ITV Studios and extensive back catalogue are not factored into the share price. This is still my view and I am close to break even on what was an ill judged investment sometime ago.
Still I have had the benefit of some good dividends and it may yet be bid for, but if the Q1 trading statement expected soon, is half decent I would expect the share price to head towards the 150p mark. On top of which it is likely to be re-admitted to the FTSE at the next re-shuffle, which will result in buying by index tracking funds.
Fingers crossed!
All the best
Snap. Did exactly the same as you! I've just gone into profit recently and have to keep sitting on my hands to avoid selling which is what I said I would do when I was 50% down. The more fingers crossed the better.
Very happy with progress on Character (LON:CCT) . I hold and can add that the recent contract extension for Peppa Pig also involved a widening of the of the number of products covered.
Now my 2nd biggest holding behind Argo Blockchain (LON:ARB) who announced excellent results today. Very happy to keep holding!
De La Rue (LON:DLAR)
Here is a link to an excellent interview with Clive Vacher CEO of De La Rue on 'The Money Maze Podcast'
https://moneymazepodcast.com/
It's not a stock I currently own but have been considering a position in it for some time. An impressive turnaround of the company has taken place under Clive. He comes across very well and I feel De La Rue are in good hands for the future. The interview lasts approximately 50 mins and covers many interesting topics.
Thanks Paul for link to Stacey Solomon best bits. Made my coffee break far more fun than usual. Worth this year's Stocko subs on its own.
Stacey Solomon's best bits ?!!!
And just to tie things together, I thought Morphles were the people you sold your Argo Blockchain shares to!
Well, Paul. I didnt think it would ever happen, but in the markets you cover we have finally found that chink in your armour with Character (LON:CCT) and Morphies. I though everyone knew what a Morphie is....but there again you don't have children, do you?
Prelims out today from Shield Therapeutics (LON:STX) . The main story here though is what happens going forward with their launch of their product (Feraccru®/Accrufer®) in the US for iron deficiency anaemia (launching in June 2021).
The product is non-IV and is well tolerated, overcoming the primary issues with existing meds for iron deficiency. This isn’t normally an area Id invest in but I’m very much aware of the need for a product like this (I worked with many IBD sufferers in the past, who often suffer with anaemia) and the upside to the current mkt cap, if successfully executed, appears very large (Finncap have a target price of 250p). They have the financing and regulatory side all sorted as far as I can see, it now just comes down to execution.
Obviously DYOR, but the risk to reward ratio here makes it feel worthwhile to me. There’s a good presentation here from the CEO, and slides here. I hold.
gwilli68.
Thank you for this link to the presentation , seems very interesting.
I will show this to my wife who is a pharmacist of 30 years standing and get her views on it.
No problem. Would be great to hear what she thinks! Thanks
Thank you for the links @gwilli68 .. looks interesting and you're right on the risk reward being worthwhile. I now hold some as well
I also hold Shield Therapeutics (LON:STX) and I agree the upside downside trade-off is good. But I think it is also worth explaining the company’s mis-steps which mean many investors have lost faith in the management and the product.
Several years ago, after years of losses, the company switched from a go-it alone strategy to an outlicencing model for its key product, Accrufer. Licensing deals have been signed in Europe and China - but revenues are currently tiny.
The founder /CEO resigned following a “misreporting” of the results of a key non-regulatory clinical trial (H2H). The CFO then became current CEO.
The key target in 2020 was to find a licensing partner in the US - but no suitable deal was found. Shield Therapeutics (LON:STX) then decided to launch the product itself (reversing its previous strategy to outlicence). This required a big capital raise (done in March 2021).
Therefore the stock is cheap - but for a reason.
The next key date will be in mid-May when the strategy for the now high-risk/ high-reward US roll-out will be explained in more detail. US launch by end Q2.
Shield Therapeutics (LON:STX) (I hold). Revenue is starting to come in now, from its Europe roll out, with loss dropping to £2.8m. The product is proven sound; albeit through another round of validation / trial. There is risk with them setting up their own sales team in the US (rather than rolling out via a 3rd part contract like in Europe). I just hope they are over the hard part, the product speaks for itself making sales easy and America takes off. Not much to hope for then :)
Character (LON:CCT) - I've held these since 2002 and it's been an interesting ride. Still have all my holding and not planning on selling anytime soon. 20p to 566p over 19 years with dividends to boot. Glad I kept the faith :)
I believe this is a Morphle. As ever, DYOR .....
1Spatial, #SPA Full year results webinar today, 29th April 1pm. Liberum say, "SPA delivered FY21 results ahead of expectations with evidence that the turnaround strategy is on track. Well positioned into FY22, with an increasing sales pipeline, record levels of committed revenues and the cloud platform launch later in the year. A rerating should come as the company continues to develop repeatable, own IP based business applications charged on the SaaS model. Their target price is upgraded to 70p (from 60p) based on an increased CY22 EV/Sales multiple of 2.5x. Register for 1pm today here.
I suspect like some others here although I would not buy a loss-making company I hold Checkit (LON:CKT) effectively for free as a residue from a very successful investment in Elektron Technology.
Well done to the company and Yellowstone for presenting to PIs at 13 00 today and not just institutions.
Key question for me is whether the cash pile retained from the Elektron sale is sufficient to see the company through to profitability.
Ditto
A ten bagger plus the CKT shares
There will probably be an Equity Development note as well
There's an Edison note out today which suggests net cash will fall to £3.5m by the end of FY23. which indicates they may need to raise more in a year or so. It also says Checkit (LON:CKT) is significantly undervalued and suggests an 83p target SP. You can read it here:
https://www.edisongroup.com/pu...
(I hold)
Cheers
Francis
I would appreciate views on Appreciate (LON:APP) trading update today. It's never quite clear whether they got a bit of a one off profit benefit from the free school meals involvement and ONS giving out love2shop vouchers as part of their covid studies. In other words could these figures have been even worse? On the former they have never made a big deal of it in their results which makes me think they did it for free or made tiny margins.
i am sitting on the fence a bit here. If it returned to say 5p EPS then I could see this share going up 50% from 40p pre market open this morning. On the other hand it was struggling to make much growth pre pandemic and never traded on a multiple higher than about 12 so is there enough potential upside? Would welcome views.
Hi Paul / Jack, I would love your take on Argo Blockchain (LON:ARB) who reported an analyst beat this morning. The CEO's shareholder communication via youtube/twitter over the last year has been better than any company I've ever seen, so it's good to see the results back it up.
I know there is some negativity on this forum around blockchain (e.g. Mr Contrarian calling it "Boll**kschain" to guffaws all around but to me that's just ignorance.)
All the big investment banks are falling over themselves to hire blockchain developers as it has many real risk reduction and income generating use cases.
Hi Shamusj
Your last comment re blockchain having real uses is undoubtedly true. The scepticism, which I share is not about the technology, but rather about the cryptocurrency application, and more pertinently the frenzy around it.
That said there is often money to be made from market frenzy....
It is a healthy scepticism that I once shared. However having spent a long time researching it, I cannot see the downside of a decentralised store of value coupled with the power of network effects. In traditional cashflow based stock comparisons, the network effects reminds me of an early £FB, but with the added benefit no single entity or management team able to halt its progress.
The relationship between Bitcoin and the various blockchain currencies powering the projects is a pretty tight correlation in terms of market dynamics.
Conversely Argo Blockchain (LON:ARB) is a centralised miner (so risk weighting is wise), but it's one with greener credentials, and more secure storage than if I mined bitcoin myself.
Your last comment re blockchain having real uses is undoubtedly true. The scepticism, which I share is not about the technology, but rather about the cryptocurrency application, and more pertinently the frenzy around it.
Hi Martin
If blockchain applications are your thing then the very recently listed Nft Investments (OFEX:NFT) is in the area of interest. Caveat emptor, buyer beware, etc.
I hold a few.
timarr
Thanks timarr
Congratulations on showing me the emptiest Stocko page I’ve yet seen! And yes this does look interesting, I will investigate further. I’ve been wittering on about thinking the blockchain technology important, this seems to be an interesting application. And I guess that a company that looks for applications outside of cryptocurrency may over time find quite a few.
Hi Martin
RE: Nft Investments (OFEX:NFT)
I wouldn't risk anything more than a fraction of funds on this. However, don't be fooled by the "non-fungible token" monicker. Most people will associate that with the recent sceptical publicity around digital art works or the auctioning of Jack Dorsey's first tweet but the real applications are things like provenance and sustainability. Being able to assign a unique digital identity to a real-world object and then track it is probably the most interesting general use case (although it's not the only one).
There's no doubt NFT are hitching a ride on a bandwagon, but there are real applications underneath this and no other ways (at least that I can see) of playing this in the UK. Could go bust, could go ballistic.
timarr
Agreed.
Blockchain reminds me a little of a Tomorrow’s World programme, back in the mists of time, where Raymond Baxter very excitedly gave the first TV show of a laser in action. At the end he said something along the lines of: ‘scientists don’t know what lasers will be used for but think it will be a very important invention’.
That said providing quality assurance on high value products and brands that are undermined by copies appears to be an interesting move, away from frothy crypto and possibly even more frothy ‘art’.
A real world example of what can be delivered on blockchain was announced this week with IOHK.io announcing a partnership with the Ethiopian gov't to implement a national student and teacher ID system to digitally verify grades, monitor performance and drive understanding over national education standards.
This is (one of) the first full country adoption of a blockchain based service, with further applications in Ethiopia including a digital transport ticketing system ..... tip of the iceberg?
This is all on the long time researched / developed but under the mainstream radar "Cardano" blockchain, a spin off created by one of the co-founders of Ethereum, Charles Hoskinson.
https://www.cityam.com/ethiopi...
Thanks for the ref to Nft Investments (OFEX:NFT) timarr, will check it out.
Gregatron
I’d really like to understand why a decentralised distributed database is superior to a centralised one for these applications.
Looks like an interesting prospect but can I ask where you hold? I cannot get a quote for a price on either AJBell or Interactive Investor. Thanks
RE: Nft Investments (OFEX:NFT)
Hi HelooB
Looks like an interesting prospect but can I ask where you hold? I cannot get a quote for a price on either AJBell or Interactive Investor. Thanks
I just bought on AJB, online, with no issues. Very small amount, mind.
timarr
Thanks. Must have just been a glitch yesterday because I can get a price on AJBell now too
NFT Investments (OFEX:NFT) No live quotes on IG and the spread is crazy, almost 50%, 2.7p bid, 4p buy.
Not available on HL.
The results, while showing ARB's maiden profit are in no way reflective of current trading. BTC was around 5k GBP for most of last year, only had the massive increases very late in the year. Unlike most companies, ARBs performance is an open book. Their mining capability and amount of BTC's mined daily as well as their electric cost and BTC price are known quantities. Together with their Zcash mining activities, they have at present daily revenue of around 300,000GBP at what they say is an 85%+ profit margin. They also have I think 60% more machines due to come online this year which will substantially increase the income. Not to mention the 49 million GBP raised for huge expansions into a "green" energy powered mine in Texas. Does this justify a mkt cap of 700m? Seems incredibly cheap by measure of the expected PE.
They recently also took I think a 25% stake in Pluto digital assets which is due to float late May, so let's see if their VC activities can be another feather in their cap, and potential avenue to further explore?
One other point is their CEO Peter Wall engages with shareholders like no other CEO. He regularly joins twitter conversations, and does frequent QandA sessions with Youtubers - answering questions for hours. Very impressive indeed.
My biggest holding. Came on to read the comments on my 2nd biggest holding Character (LON:CCT) - expecting Argo Blockchain (LON:ARB) to be ignored.
Holy smoke Mnomis.
That's a casino sum.
Would you put in big investments or just small inconsequential (losable) sums?
Juxtaposition:
You have £0.5M to invest.
Do you buy say x companies expected to make 30% over the average
or
Do you buy x companies where some will make a casino sum and some lose a casino sum?
or
Do you buy say 5 30% boring and steadies and 5 crap-shooters?
For me personally, I've made my losses in the past on speculative companies, and its not my style to do so now I'm over the half way life-expectancy.
In addition, ISA's punish risk taking as ISA losses are NOT CGT allowable, which means you would ideally trade within a CGT chargeable trading account or platform.
My instinct is that most companies underwhelm, and so you are having to filter the UK Universe of 1824 investments down to less than 50 on the shortlist.
Full respect to anyone who can consistently spot multi-baggers hit after hit.
Argo Blockchain (LON:ARB) and Character (LON:CCT) - You're a braver man than I today!
Strong HY1 results from Character (LON:CCT) this morning, even whilst Margins weighed down slightly from container & shipping constraints.
Scandi Acquisition now profitable and the whole company looks well geared for Xmas 2021 with a very well regarded portfolio of Toys!
Angle (LON:AGL) publishes its 2020 results today. No surprises. The momentum that has taken the SP to recent highs is built around two things: the opening of the two labs, in UK and US; and more importantly, the first deal with a significant pharma company for its services. This has been followed by the completion of the recruitment for the ovarian cancer study. The provision of final information for the crucial FDA approval process is confirmed to happen in May. So it is all about the second half of the year: the FDA approval, though the results of the ovarian cancer study in Q4 will be significant too. There may also be further announcements of other pharma’s coming in with contracts for use of the new lab services. It could and should be a game changing 2021 for this great company, whose technology and products can offer more to the now huge ‘post Covid 19’ backlogs of cancer patients than ever before. In today’s world, that really is game changing for the lives of many 000s of people and families…..yet in the real world today’s news (and reminder of its importance) from Angle (LON:AGL) will as usual be swamped by our interest in market recovery in sofas, carpets, overseas holidays and the like. The key confidence booster to its supporters / investors like us is that it will have its day, which may be as soon as Q3/Q4 calendar 2021.
Ridavies
“…..yet in the real world today’s news (and reminder of its importance) from Angle (LON:AGL) will as usual be swamped by our interest in market recovery in sofas, carpets, overseas holidays and the like.”
Worry not – word is getting out - Angle (LON:AGL) has been picked 49 times in the 2021 Stocko Stock Picking challenge !!! When the new Ovarian trial confirms accuracy of 95% the labs will be swamped with work.
Is parsortix still their only product? They have been around for so long that I wonder if they haven't been overtaken in the field of microfluidics (I think that's the correct term). Apologies for the cynical note but I have no interest in them until they report some real revenues.
Zoiberg
Far from being overtaken, Angle (LON:AGL) have a product which far exceeds the capabilities of other competitors in the field of liquid biopsy. Parsortix is their main device and at least 200 are being used in cancer research labs around the world. They have developed further processes for downline analysis and have recently signed a $1.8m contract with a large pharma. IMO they will succeed even without FDA approval (I hold).
PS I’ve read that Finncap have a note out this morning raising their price target to 165p pre FDA rising to “at least 220p on receiving FDA clearance”. That approval will be later this year.
Angle (LON:AGL)
Link to this morning’s results webcast. The Q&A session starts at 27 mins.
hTTps://webcast.openbriefing.com/angle-apr21/player/?player_id=42822
Link to PDF of results presentation
hTTps://angleplc.com/wp-content/uploads/ANGLE-31DEC20-Prelims-Presentation-29apr21.pdf
Re Angle (LON:AGL), thanks for all the positive and informative comments. Zoiberg has a fair point about chasing winner against his criteria....but I font think he understands that this is a process, with multiple applications.
After all these years, the Parsortix process (extremely well patented) is the only one to capture live cancer cells of huge potential worth in reducing false positive cancer diagnoses; reduce unnecessary operations which are costly in every sense, financial and personal, and give progress information from multiple relatively inexpensive blood tests in conjunction with specific individual treatments. That is really beneficial science in my book, and ii-twill make very good financial sense.
There are a number of financial presentations on You Tube from the CEO which Zoiberg might like to watch. the existing market figures are staggering; the savings are huge.....but, hey, who knows what H2 calendar 2021 will bring? If the Finncap data mentioned by JimMcLad above is right, then I'm looking to double my money at least from an already healthy position right now. Maybe I should buy some more to add to my biggest single stock holding?
There are huge are hundreds o companies out there where the SP has at least doubled since November in the pharma area with little or no story to tell other than a promise.......but Zoiberg probably hasn't bought into those either. You are probably a better investor than I am (and I mean that very sincerely, given the winners I have held and lost). I hope you have a string of winners so that missing another like £AG wont matter.
Whatever, the discussions are very useful and all the best to everyone.
In Style (LON:ITS) have released their first trading update since going public.
Encouraging language used, but light on details and figures
Good morning Paul
would love to hear your views on Immotion Immotion (LON:IMMO)
It is a relatively young company (IPO c2019 and provides VR experiences to theme parks (concentrating on aquariums atm))
as you can imagine badly hit by lockdowns BUT as lockdowns lift the money should roll in as people visit attractions again and start using Immotion’s VR experiences
In addition the SP has obviously been suppressed due to covid impacting the leisure industry. I reckon SP recovers from here as the impediment to revenues (I.e. lockdowns ) is removed and money comes rolling in as it has done this March with record revenues
additionally - they launched an ‘at home’ VR experience just before Xmas to mitigate the damage caused by lockdowns and have come up with UV cleaning kit (for headsets and rooms) which is recommended by HP
they were just about to turn profitable just as covid hit and they will do so this year.
I know you like leisure so hopefully I have persuaded you to have a gander
Thanks
Great if you like fish. Do they have any plans to expand into other fields as the focus on marine life seems quite limiting.
The VR mobile phone kit seems to be very affordable and possibly the way to a mass market. I don't know anything about VR so I would have to checkout the competition
You've found a very interesting company and certainly the forward revenue projections support your view that they are a recovery play.
My morning smallcap tweet:
Innovaderma (LON:IDP) Strathdon Investments (LON:STV) LMS Capital (LON:LMS) Gaming Realms (LON:GMR) International Personal Finance (LON:IPF) in Style (LON:ITS), Yourgene Health (LON:YGEN), Devro (LON:DVO), Appreciate (LON:APP)
InnovaDerma (IDP) confident about return of demand as UK enters 'peak tanning season'. I only use natural products ie sunshine. [SP=35 Cap=7m]
STV (STV) AGM stmt: January-April total advertising revenue +10%, ahead of previous guidance of +7-9%. "STV also expects a strong commercial and viewing performance in June as the economy continues to reopen, supported by a high-quality programme schedule." [SP=NA Cap=NA]
LMS Capital (LMS) NAV/sh 58.9p down 0.5p in the Q. [SP=32.98 Cap=27m]
Gaming Realms (GMR) upgrades from OTCQ Pink to OTCQX Best Market. This "will significantly enhance our visibility in the U.S. market". [SP=41 Cap=118m]
International Personal Finance (IPF) Q1 credit issued in-line with expectations but lower projected FY impairment charge likely to result in a stronger rebound in profitability than previously expected. [SP=121 Cap=271m]
In The Style (ITS) guides FY(Mar) rev up over 130%. New customers acquired up 19%. "The collaboration with Stacey Solomon is one that we are really proud of." Why? You just pay her to be your mouthpiece. [SP=249 Cap=131m]
In line: Yourgene Health (LON:YGEN) Devro (LON:DVO) Appreciate (LON:APP)
[edit] for those who don't know who Stacey Solomon is - she's a singer and presenter who was 'the face of Iceland' in 2011. "The face that launched a thousand chips!"
Small correction Mr. C - you need to add a G to the Epic to get from Strathdon investments to STV (LON:STVG)
Good morning, Mr C. In my usual first stop of the day - your section of course - I couldn't believe it when I didn't see a reference to Angle (LON:AGL) and its final results, and promising scenario. Still, never mind.
Good morning Paul and Jack, would love your views on Checkit (LON:CKT) preliminary results today.
A further upgrade to the one in February with summary as follows:
Market cap £38m and SP went above its ATH earlier this week.
And there's an online briefing today:
The Group's management team will present a live webinar including an opportunity for questions at 13:00 (BST) on 29 April 2021. The webinar can be accessed via the news area of the website at https://www.checkit.net/news/ or by using this link: https://us02web.zoom.us/webinar/register/6016188249930/WN_vu9Av2ekRTyxGJ9nfxHErw
Cheers
Francis
I would add that the chairs statement reads particularly positively and he comments that the current year has started well. Confidence in future growth is based around increased investment in sales, marketing and product capabilities. The recently acquired business in the US (Tutela) is also showing early promise. The launch of a self-service option will facilitate product roll out globally and there are now trials ongoing in multiple countries.
I second that Paul - exciting company and I really like the MD Keith Daly
remote monitoring and recurring revenue- good ingredients for success imo