Small Cap Value Report (Tue 27 Nov 2018) - PRSM, ALT, CHH, QUIZ, IGR, VCP, GRG

27th Nov '18 by Paul Scott

37 comments 11542 reads

(Graham is on SCVR duties, but Paul has left us the following note. - GN)

Hi, it's Paul here!

I'm not entirely sure whether it's me or Graham meant to be writing Tuesday's SCVR? So I thought it might be best to just put up a placeholder, and then see what happens tomorrow!

We're both a bit pre-occupied with Mello London, and making sure that this investor show has the highest ever recorded per capita consumption of Guinness!

There were literally no taxis around, and Uber wasn't working either. So when we were all thrown out of the hotel bar at Mello c.1 am, after a very jolly time with Gromley & Bestace in particular, I had little choice but to mount a Mobike, and cycle 11 miles back to my Islington pad.

Only to be told by my flatmates to (1) not make any noise, definitely no singing to Queen or Chaka Khan, (2) microwave some macaroni cheese, as that's all we have left, oh and some broccoli, and (3) go to bed please.

I'm due to be released from Twitter prison in a few hours - apparently hurling abuse at our democratically elected Prime Minister, is not de rigueur these days. Sorry, I didn't get that memo, I foolishly thought we still have some semblance of civil liberties, and freedom of speech. Clearly not. Now we are all snowflakes. I'm offended!!

Thank goodness we live in a relatively civilised country, where you just get banned from Twitter for 7 days, for pouring scorn on the useless ruling class. As opposed to recent examples abroad which show just how primitive & uncivilised humans can be.

Actually, the history of mankind is appalling. It's full of violence and hatred. We are so lucky to be living in a brief interlude, of peace. Let's make the most of it. We'll all be dead in 100 years anyway.

Morning, Graham here.

I only have about an hour/90 minutes to look at company updates before I have to leave for the conference venue and present this blog. So this is going to be a turbocharged (i.e. short but very fast) SCVR.

Blue Prism (LON:PRSM)

Trading update - year-end update from this robotics group.

Key points:

strong sales momentum has continued, particularly in…

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andrea34l

27th Nov '18

IMHO, I feel Severfield (LON:SFR) are losing steam, and it is the Indian joint venture keeping things looking as good as they are... which isn't that great. Underlying operating profit is DOWN (slightly) at 12.5m (12.7m) with operating margin down quite a bit. The Indian JV showed a big increase in profit (albeit at low numbers) so excluding that the picture is worse. Also, the order book is down (as was the case in their last report). I see this as fairly valued.

dscollard

finnCap have published a note on D4T4 Solutions this am and updated the price target to 240p from 215p (they are the house broker btw)

splendid results they are too with bags of cash and improved margin. Believe it is still free to sign up for finnCap's research

https://researchlibrary.finnca...

Excellent H1 results

A combination of the large contracts won just prior to the period, together with the IFRS 15

adjustment bringing £1.7m sales (and £1.0m profit) from H2 2018 into H1 2019, saw the

first half revenue almost treble YoY to £14.0m.

The new segmental analysis provided breaks down what had previously been shown as

‘Project Work’ and the greater clarity shows high-margin ‘Own-IP’ products in the mix

rising from 17% in H1 LY to 46% of total group sales in this half. Thus the Interim gross

margin rose from 44% to 51% and gross profit jumped 243% from £2.1m to £7.1m.

Overheads grew 52% to £3.8m on the back of heavy US sales investment but with the

step change in profit, H1 Adj. EBIT swung from -£0.4m LY to a £3.4m profit and Adj. PBT

(Adj. FD EPS of 7.4p). This is a sustainable 25% operating margin – in line with those

seen in FY 2017 and FY 2018.

These numbers exclude an £0.8m exceptional FX gain and the usual £0.2m of SBP and

amortisation in the half. The effective tax rate of 13% was in line with expectations.

can't get the EPIC link to work for £d4t4 or £D4T4 or LON:D4T4 or LON: d4t4 : needs fixing!

sharw

The £ system will not work with any epic containing a numeral so you just have to create it yourself the long way thus:
D4t4 Solutions (LON:D4T4)

The worst is System1 - SYS1. If you put a £ in front it produces a different company SysGroup (LON:SYS)1

Ben1

I'm not able to make Mello, but would be very interested in some of the presentations (I have holding T Clarke and Duke for example). Are these made available anywhere or is it dependent on the companies themselves to do this?

gbjbaanb

Nope, they're just reorganising the company to be dual-listed in London and Ireland.... no doubt a premature Brexit thing.

DWit199

I don't understand why £QUIZ has been registered in Jersey since March 2017. There must be some advantage but it just looks suspicious to me. Can anybody clarify?

kuronagi

Curious that Paul does not comment on D4T4 which released stonking results today. Even though a strong performance was predicted in the last trading update, these results appear to be well ahead of expectation. Also with news of further contact gains, new large customers (e.g. US, Swedish banks etc).

Cleeve

Graham if you get time could you cast your eye over Treatt the results looked pretty good to my untrained eye

rmillaree

QUIZ (LON:QUIZ) and Jersey

i would guess the option to minimise uk corporation tax and possibly some other taxes might have something to do with it.

re QUIZ (LON:QUIZ)

It looks as if it was set up in Jersey in preparation for the July 2017 IPO when it took over Shoar, the previous group company and now an intermediate company. To find out more go to
https://beta.companieshouse.gov.uk/
and enter SHOAR (HOLDINGS) LIMITED in the search box.

I would guess the option to minimise uk corporation tax and possibly some other taxes might have something to do with it.

If that is the case they are not very good at it. £1.7m tax paid on pre tax profit of £8.5m is a tax rate of 20%.

DJCP

Graham (mainly, as this [financial sector] is more his forte than Paul's.

AJ Bell have just released details of their IPO, and I wondered if you (or SCVR readers) have any thoughts.

At 208 pages, the prospectus looks likely to be keeping me occupied for a couple of hours (or possibly more) !

Deadline is 5pm on 5th December, so I would imagine any serious investors could have a busy weekend !

I've an initial thought on my (possible) investment, and have approx. 70% of the cash at the ready, so may need to trim my 'folio to get the little extra before Wednesday. .. IF I decide to invest :o)

Robert Smith

Completely off -topic but your intro. was interesting and thought- provoking. Think you're being a bit optimistic about the 100 year time span though. FWIW, and IMHO, we'll be fortunate to reach 2050 the way things are shaping up.

Trident

Possibly it puts it technically outside the takeover code for the LSE?

Gromley

Bloomin miraculous those mobikes obviously and we're supposed to believe that driverless cars are 'clever'. ;-)

A thoroughly enjoyable two days at Mello - excellent presentations, excellent company ( a good start on my would like to meet up with list )

Huge congratulations to David and the team - have you organised next week's event yet? :-)

I can't wait.

Frankyboy

"Aided and abetted by the wonderful head honcho from Ideagen (LON:IDEA) (who makes me look sober, and that's saying something!)"

SELL IDEAGEN NOW, WHILE YOU CAN!!!!! :)

28th Nov '18

thanks, clearly a glitch in the Matrix

Howard Adams

12th Jan

Hi

For those who might be interested in Altitude (LON:ALT).

This headline from RNS yesterday (11/01/19).

'Proposed placings of, in aggregate, 10,294,118 new Ordinary Shares at a price of 68 pence per share to raise £7.0 million

and

Acquisition of the membership-based trade group of independent promotional products distributors business of Advertising Industry Mastermind Group, LLC'

The RNS has a lot more detail if you wanted to dig deeper.
https://www.investegate.co.uk/altitude-group-plc--alt-/rns/proposed-placing-and-acquisition/201901110700048200M/

I noticed Altitude (LON:ALT) from Mello, London 2018 and this informative video from Tamzin and Piworld. Worth watching if your interest is pricked.
https://www.piworld.co.uk/2018/12/13/altitude-group-alt-presentation-at-mello-london-november-2018/

I don't hold yet but might go for small entry position depending on how the placing develops.

Regards
Howard

blondeamon

13th Jan

IG Design (LON:IGR) has a lot more going on to it than shows and we'll have to see the results this week about progress. We know they are ahead, looks like they are doing quite well in this climate and the SP does not IMO have the potential from the acquisition of Impact reflected to it.

I think they update this week.

Small Cap Value Report (Tue 27 Nov 2018) - PRSM, ALT, CHH, QUIZ, IGR, VCP, GRG

Blue Prism (LON:PRSM)

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Paul Scott

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