Small Cap Value Report (Tue 30 Apr 2019) - TUNE, | Paul Scott

6th May '19 by Paul Scott

27 comments 7817 reads

Good morning, it's Paul here.

I've still got the flu unfortunately (it's been a full week now), hence wasn't able to finish yesterday's report - profuse apologies. I seem to have made some progress overnight, so am hopeful of being able to put in a better performance today. Catching up will have to wait until I'm firing on all cylinders again.

7-8am initial skim

Focusrite (LON:TUNE)

Interim results look good - driven mainly by improved margins.

On the list to look at in more detail later. Nice company, but too expensive, will probably be my conclusion.

Countrywide (LON:CWD)

Q1 loss as expected. Broadly in line outlook for 2019 full year.

Possible future turnaround?

Solid State (LON:SOLI)

Good trading update - finished year ended 31 Mar 2019 "slightly ahead" of upgraded forecasts.

Looks reasonably priced on 13.5 times fwd earnings, despite big recent rise in share price. Could be worth a closer look maybe?

Dillistone (LON:DSG)

Balance sheet is too weak for me.

£260k loss for the year.

New product "Gated Talent" looks to have flopped, or at least doesn't justify anything much in the valuation.

Cost-savings - staff are being offered the opportunity to relocate from London to Basingstoke or Eastleigh. Lucky them!

Too small, and not a growth company, so why is it stock market listed?

Xeros Technology (LON:XSG)

Terrible figures, and rapidly running out of cash. Needs to raise more cash in 2019, it states.

Why do people punt on things like this?

Focusrite (LON:TUNE)

Share price: 495p (down 4.3% today, at market close)
No. shares: 58.1m
Market cap: £287.6m

Half year results

Focusrite Plc, the global music and audio products company supplying hardware and software products used by professional and amateur musicians, today announces its Half Year Results for the six months ended 28 February 2019.

Unlock with Email

Unlock with Google

Already have an account?
Login here

MrContrarian

30th Apr '19

My morning smallcap tweet: Changla shags shareholders

Independent News & Media (LON:INM), Scisys (LON:SSY), Chagala (LON:CGLO), Solid State (LON:SOLI), Park (LON:PARK), Orchard Funding (LON:ORCH), Oleeo (LON:OLEE)

Independent News & Media (INM) 10.5c recommended offer, a 5% premium. INM confirmed offer talks a month ago.
SCISYS Group (SSY) further €9.7m orders for Galileo Ground Segment work. Order does not alter existing market guidance.
Chagala Group (CGLO) will delist on June 3, without the need to trouble holder with a vote. That's how they do things in Kazakhstan. Cites management time and legal and regulatory burden, lack of liquidity and they don't give a toss.
Solid State (SOLI) guides FY adj pretax slightly ahead of recently upgraded market consensus forecasts which are £3.5m.
Park Group (PARK) FY trading ahead of mgmt expectations but IFRS15 adj pretax marginally below market expectations of £12.9m. Blames "particularly strong growth in our more profitable card business...[effect of] IFRS15 is now expected to be approximately £0.5m higher than previously anticipated, as a greater proportion of profit will be deferred until the current year." Outlook: profitability will be lower in the current year before growth resumes thereafter due to costs of running two sites while co moves to new offices, as well as additional technology and marketing investment.
Orchard Funding (ORCH) has withdrawn its application for a banking licence because its considering acquiring an existing bank with a licence. If that does not proceed it will re-submit its application for a banking licence.
Oleeo (OLEE) H1 rev up a touch but pretax down 40% due to higher employment costs. Gloomy outlook: "a competitive market place, known reductions in client subscriptions, and economic uncertainty provide continued pressure on sales and profits and a highly challenging and uncertain outlook for the foreseeable future."

Welshborderer

Somero Enterprises Inc (LON:SOM) Dividend, having not received the dividends paid on 26th April contacted Halifax who confirmed the dividend was indeed received by them on Friday but unfortunately was denominated in USD and paid by cheque. The issue then compounded by having well in excess of 400 accounts to distribute the funds and then only when cleared. Commenting on chatter I had seen concerning conversions indicating others had already received theirs was informed that would be a factor of holding shares directly against held in a Nominee account.

Fearing that something else might be going on here then made contact with Somero Enterprises and received a very swift response from Jennifer Oliver, Director of Legal & Corporate Affairs, Investor Relations & HR who confirmed the overall issue and stated "We are in process of establishing the necessary elements to pay dividends in GBP. The specific mechanisms to accomplish this were not previously available to us which is why we always have historically paid in USD. Future dividend payments to UK-based shareholders should be in GBP and thus eliminate the delays you’ve experienced."

Hope this is seen as informative

Regards David

Michael Tee

Morning Paul,

Scisys have won 3 contracts worth 9.7milliom Euro (does not alter market guidance). If you have time, can you cast your eye over the company. The management team present very well, they have relocated to Ireland to avoid Brexit related issues and they have a strong order book.
(I hold)

M.

johnsmith68

Hi David. This is somewhat related and hopefully may also be of interest to some readers.
I used to hold Somero Enterprises Inc (LON:SOM) in a Halifax ISA and I noticed that I only received 70% of the expected dividend payments despite having completed a W8-BEN.
Halifax told me that this was because "The dividend for Somero is not eligible to receive the reduction in withholding tax which is covered by the W8-Ben, as this stock pays its dividends via the UK settlement market,(CREST)"
Other readers have stated in the past that Hargreaves Lansdown and TD Direct only deduct the 15% withholding tax on Somero when a W8-BEN has been submitted.
When I put this to Halifax, they said that it was a business decision "..not to offer the facility to register the W8 Ben forms on US stocks held through CREST".
It seems pretty outrageous to make such a decision which effectively prevents their customers receiving dividends on shares that Halifax allow their customers to trade in.
Not satisfied with Halifax's answer, I contacted CREST, who informed me that ".. as the security is a depository interest, Halifax will need to contact the registrar, Computershare who collects and distributes all cash in the same way as they do for a UK security."
When I put this to Halifax, they informed me that I would need to contact Computershare regarding the reclaim.
I never got as far as doing that since I subsequently sold out of Somero, however I would be interested to know if any other readers have had similar experiences or indeed, if anybody has ever contacted Computershare to claim their missing dividend payments?

MichaelFBS

Thank you for this post.

I hold with Interactive and have never had a problem. I hold in Trading account, ISA and SIPP. ISA can only recieve in sterling and all are shown as being credited on 26th April. But this move to pay in Sterling seems like a good move by Somero and demonstrates they are responsive to shareholder needs.

As an aside I have moved all my portfolios to Interactive Investors from Hargreaves Lansdown and find them excellent and much cheaper!!

Laughton

Good morning Paul.

Sorry to hear that you're still under the weather. I can thoroughly recommend BEROCCA (available from all decent chemists) it speeds recovery and helps you "feel energised" and even "supports mental performance".

Disclosure - I don't own any shares in Bayer but have used the product whenever I've had a cold and, to me anyway, it really does work.

Fegger

Thanks for reminder. Nothing received from Selftrade so have chased them up

Small Cap Value Report (Tue 30 Apr 2019) - TUNE,

7-8am initial skim

Focusrite (LON:TUNE)

Countrywide (LON:CWD)

Solid State (LON:SOLI)

Dillistone (LON:DSG)

Xeros Technology (LON:XSG)

Focusrite (LON:TUNE)

Unlock the rest of this article with a 14 day trial

About the Author

Paul Scott

27 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...