Good morning, it's Paul here.

7-8am comments

Nexus Infrastructure (LON:NEXS)

Interim results - I'll have a proper look at these later, below.

The group warned on profits on 29 Apr 2019, which I didn't get round to looking at. So it's been on my list of things to catch up on, hence interim figures today being of interest.

Operating profit of £2.9m is down 17% on last year - hardly a disaster. There has been a 40% drop in share price since the Apr 2019 profit warning, so weaker performance looks baked in already.

Strong order book. Balance sheet looks OK, with some net cash.

Stockopedia shows forward PER at 8.7 - which looks about right to me, for a cyclical contracting business.

Outlook comments today sound positive, and interim divi is being maintained.

accesso Technology (LON:ACSO)

Trading statement (AGM) - this share is on my watchlist, because it hasn't bounced after the indiscriminate sell-off in growth shares last year. My feeling is that's either a buying opportunity, or not.

Today's update reads positively, but there aren't any figures.

Historically it's been a highly seasonal, H2-weighted business.

While the majority of the trading year still remains ahead of us, the Board is encouraged by the trading seen at this stage of the year and remains confident in the Group's outlook, maintaining Board expectations for the year ahead."

My view - I understand the bull case;

  • Commanding presence in a niche with little competition, globally
  • Tech companies are not valued on profits (look at Uber for a large example)
  • Once development spend is completed, then profits could flow
  • Potential bid target for private equity?

The drawbacks for me are;

  • Enormous capitalisation of development spending onto balance sheet
  • Weak balance sheet
  • It doesn't really make any money - I'm not happy with the adjusted numbers
  • Huge Director selling in recent years - if the future is so bright, why would they sell?

It's possible that today's update might reassure, and trigger some buying, maybe? Personally I can't see anything much to get excited about in this update. This one remains in my "too difficult" tray, but I am tempted to buy - because the market got wildly excited about this stock in the past, and once it starts rising again, there…

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