Small Cap Value Report (Tues 31 Aug 2021) - MCLS, SYME, LAM, RAV, PEN

31st Aug '21 by Paul Scott

45 comments 10294 reads

Good morning, Roland's back this week!

Today's report is now finished.

Agenda -

Paul's section:

Mccoll's Retail (LON:MCLS) (I will hold after placing completes) - a lukewarm reception to the open offer, but it's not material to the overall fundraising. I recap on the bull & bear points. A speculative, risky, special situation is how it's probably best viewed. Not for widows or orphans!

Supply@me Capital (LON:SYME) - I remain deeply sceptical about this jam tomorrow share. There's nothing in today's trading update to change my mind.

Pennant International (LON:PEN) - H1 trading update. Loss-making, but better performance expected in H2 (as happened in 2020 & 2019). Moved from net cash into net debt. A reduced order book, but still provides decent visibility. I'm tempted to have a small punt on this, because it's looking potentially cheap at £10m market cap.

Roland's section:

Lamprell (LON:LAM) - A balance sheet update from this offshore engineering group, which appears to be close to financial distress despite ending last year with a net cash position. Is this perennial turnaround of interest?

Raven Property (LON:RAV) - This Russian commercial property boasts a forecast dividend yield of around 8%. Today’s half-year results have received a warm reception - one to consider for income hunters?

Explanatory notes -

A quick reminder that we don’t recommend any stocks. We aim to cover trading updates & results of the day and offer our opinions on them as possible candidates for further research if they interest you. Our opinions will sometimes turn out to be right, and sometimes wrong, because it's anybody's guess what direction market sentiment will take & nobody can predict the future with certainty.

We stick to companies that have issued news on the day, with market caps up to about £700m. We avoid the smallest, and most speculative companies, and also avoid a few specialist sectors (e.g. natural resources, pharma/biotech).

A key assumption is that readers DYOR (do your own research), and make your own investment decisions. Reader comments are welcomed - please be civil, rational, and include the company name/ticker, otherwise people won't necessarily know what company you are referring to.

Paul's Section

Mccoll's Retail (LON:MCLS) (I will hold, after placing completes)

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Rambo

31st Aug '21

Thanks for the link sharw, very useful information and worth reading, for me the most interesting read was that of Volex (LON:VLX) - I Hold. I worked in the sub contract manufacturing business for over twenty years and have seen some companies come and go especially during the dot com boom and bust. Volex at that time was trading at 1200p from memory but was heavily involved in the telecom/technology sector so needless to say it went down hill from then. Thankfully, Nat and his team have managed to pull it out of the doldrums and appear to be doing all of the right things to make a successful turn round which is backed up by the lofty rise in the share price from a low of c.40p to the present c.400p at time of writing. For anyone here that holds Volex or is thinking of buying shares in the company I would recommend you download the report in the link from sharw. In my opinion Downing have done an excellent job in analysing the strengths of Volex and justifying why the SP will continue to rise. Whilst there is a positive spin on this please do keep in mind that nobody knows what is round the corner and DYOR ......

Kind Regards

Leebod

The charity element of Omaze is a big draw to punters over BOTB and although I'm sure BOTB have had publicity on the back of winners in the past I don't recall seeing anything on the BBC website like the recent car winner and house winner via Omaze. BOTB needs a complete rebranding starting with the name.

Momoko Miyamoto

I reckon Volex (LON:VLX) is a crowded trade. It's had a great run in 2020-21 but making electric cables is unlikely to be particularly profitable in the long run. The company is also taking on acquisition risk.

CamRaid

LongGame87 - you have been promoting Supply@me Capital (LON:SYME) at every opportunity.

It is a massive punt that it attracts a tech like valuation for a high risk low quality fin business.

Personally I would rather eat my own liver than invest in this but good luck to you.

GrahamF

Whenever I see BOTB, for some reason I think BYOB.

Best of the Best was at least a name. BOTB is by contrast just typing.

mwjackson

@longgame87 - please give it a rest, this isn't ADVFN...

Paul Scott

Hi Aislabie,

Sorry we didn't get round to looking at Centralnic (LON:CNIC)

It's not a company I'm familiar with, having only looked at it a couple of times in recent years here.

Having a quick glance at its Interim results today, I see that $20.5m adj EBITDA actually turns into a small loss before tax of $(0.6)m. Stand out items include $5.3m finance costs (an expensive bond funding)

The balance sheet looks horrendous, once you write off intangibles. There's a lot of debt.

If you hold this share, it's probably a good thing that I didn't get round to writing up a full section on it, for the sake of your blood pressure ;-)

Regards, Paul.

Sorry LongGame87,

We just look at the facts & figures here, and report the truth.

If you think the future looks amazing for any company, then good luck to you. We'll agree with you, but only if/when that is reflected in the facts & figures. It's not our job to speculate on start ups. Most of them turn out to be dismal failures for investors, just a hint from my 25 years experience looking at this type of thing.

Hope that clarifies.

Paul.

My daily Google search for BOTB usually throws up a list of rock music articles, under Battle of the Bands.

Deegee Eff

Roland thanks for the write up on Raven Property (LON:RAV) , as you say it is at a large discount to NAV with a good yield. The covid related move to internet shopping has been even more extreme in Russia than in the UK requiring even more logistics increasing demand for the type of properties Raven has, and a shortage of labour due to travel restrictions and higher raw material prices has put up the price of building new warehouses significantly. Russia has some significant internet shopping companies, some of which are Ravens customers.

The massive discount to NAV of Raven Property (LON:RAV) compared to the premium of US/European companies seems overdone. ( Note the record high price paid for Philip Green's warehouse in Milton Keynes).

JohnEustace

I think the lesson that Morrisons learnt from their previous foray into convenience stores was that it was easier to make money as the wholesaler to the stores than through operating them. I will be surprised if they want to take control again - unless they have to in order to keep them running.

dereksp

Come on guys...not a whimper on CNIC interims. Zeus has commented and Techmarketviews has commented. You can't be serious?

Read the comments below. It's already been discussed. Thanks for your contribution.

LongGame87

1st Sep '21

Hi Paul,

That is fine. I am called LongGame for a reason. Invest and hold. No trading nonsense. Keep your eyes on this company.

25 years experience, fair enough. Do some research on the guys involved at (LON:SYME). I trust them.

I also trust this and the network that is being created!

There is a very useful Research Channel on Telegram where links are posted for anyone interested in following SYME whether invested or not.

https://t.me/SYMEinfo

ATB

2nd Sep '21

Anyone that feels the need to share such a diagram in the hope it supports investment is clearly clutching at straws.

Here is a diagram you might be familiar with !!

Boon

3rd Sep '21

How does Centralnic (LON:CNIC) have a huge dependence on Google?

4th Sep '21

LongGame - that sums it up. Soundbites and buzz words in an attempt to promote something that lacks real substance. You are showing a 1 day chart with an increase of 16% to hide the fact the share has lost 74% since listing.

Everything about this stinks. From the silly, overly complicated diagrams, the buzz word heavy website, the naff bio's for the directors, I could go on.

It is just another platform looking to gamble with other people's money. The key to success is convincing the gullible that this is a tech based business so you can get a tech valuation based on a multiple of revenue rather than profits.

It is certainly not for me but for those that hold I wish you luck.

13th Feb '22

Probably new management at Morrisons since that time in 2015, and all the lessons has been forgotten, hidden deep on powerpoint decks in Sharepoint folders.

Small Cap Value Report (Tues 31 Aug 2021) - MCLS, SYME, LAM, RAV, PEN

Paul's Section

Mccoll's Retail (LON:MCLS) (I will hold, after placing completes)

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Paul Scott

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