Small Cap Value Report (Wed 18 Oct 2017) - RBG, FLYB, FOXT | Paul Scott

17th Oct '17 by Paul Scott

45 comments 17464 reads

Good morning!

At the suggestion of a reader, we're trying out a new system. Either me or Graham will put up a "placeholder" article in the evening, for the next day's news - trading updates & results statements, as usual.

The idea is that there's then a place for readers to post your comments on interesting RNSs from 7am onwards. In particular, if you would like me (Tue-Thu) or Graham (Mon & Fri) to cover a particular stock, then you can put in a request early on in the comments section, and if other people could click on thumbs up, then we'll focus on the requests which have the most thumbs ups. Ideally let's try to focus on the most interesting RNSs, not just humdrum results that are in line with expectations, as they're so boring for me & Graham to write-up. We like profit warnings, or excellent results where there could be good money to be made.

Also, it would be great for readers to post your own thoughts on particular results & trading updates. Especially if you know the company well, and can draw out points which the rest of us might miss.

So let's give this a try. If it works, and people like it, then we'll continue. But for now, this is a trial.

Regards, Paul.

P.S. I think Graham will be starting off the main sections tomorrow morning, as I have to prepare my legal defence for some neighbours who are suing me over a ridiculous matter (replacing skylights in my flat). So I have to prepare my legal defence, and it's taking me ages this evening, so Graham has kindly agreed to do some SCVR work in the morning, to give me more time to finish off my legal defence.

For anyone who missed it, I published a review of results for y/e 30 Jun 2017 from dotDigital (LON:DOTD) in yesterday's report. So here is the link to that. In a nutshell - lovely figures, but as with so many things in this roaring bull market, the valuation of DOTD is looking rather toppy!

Revolution Bars (LON:RBG)

Share price: 178.6p (up 0.6% today)
No. shares: 50.0m
Market cap: £89.3m

(at the time of writing, I hold a…

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MrContrarian

18th Oct '17

My morning smallcap tweet:

Chamberlin (LON:CMH), Ubisense (LON:UBI), Atlantis Resources (LON:ARL), Oncimmune Holdings (LON:ONC), Tissue Regenix (LON:TRX), Flybe (LON:FLYB), Foxtons (LON:FOXT)

Chamberlin (CMH) trading - FY rev in line but problems with new machines in foundry increasing costs. Exp U/L profit flat YoY. F/C was for 11 fold rise in adj EPS to 19.5p.
Ubisense Group (UBI) wins £1m contract from premium German car mfr. No timescale.
Atlantis Resources (ARL) MeyGen Phase 1A is expected to formally complete its construction phase and enter into its 25-year operational phase within the coming weeks. It's only 6MW mind. Seeking talks with Govt for 80 MW of capacity to allow construction of Phase 1C.
Oncimmune (ONC) wins £900k (min) Polish contract over 3 yrs. "We anticipate the signing of a number of further agreements in Europe, and beyond, in the coming months."
Tissue Regenix Group (TRX) CEO leaves with immediate effect. No reason. Just when like your wife leaves you in the middle of the night. You didn't expect a reason did you? Chmn showers him with plaudits. "The integration of CellRight continues as planned and current trading remains in line with Board expectations."
Flybe Group (FLYB) warns on H1, exp adj pretax £5-10m (£16m). A £6m hit from extra IT cost was already announced. "Following a detailed review of aircraft maintenance, it has incurred higher than expected related costs in the first half. This reflects the drive to further improve the reliability of its aircraft...A full review of the maintenance strategy has now been launched which aims at a significant improvement of aircraft performance and costs." If the inc maintenance followed a review they must have known about it for weeks or months! Not good enough.
Foxtons (FOXT) trading in line. The 10% rise yesterday must have been the overture to this music for holder's ears. I'm short.

fwyburd

Hi David, I use the London stock exchange site for my RNS alerts. Its free to register and set up alerts and they seem to come in in a timely fashion.
Francis

willhampson

I second Paul's suggestion of trying the Vox Markets app. It's free and the RNS updates, in my experience, are faster than advfn and investegate. I find it particularly useful for post-8am RNSs as it will give you a ping and notification immediately. My only complaint is they seem to have changed their text formatting recently and I now find it harder to read the RNSs, could just be me though...

Camtab

I haven't heard the expression "ball-ache" since I was at school. Ah a walk down memory lane. Nice one Paul, in particular nice use of the hyphen!
All the best and keep em coming.

tony akram

Could you look at Softcat I thought the results were excellent be interested to know what others think

Talking of RNS's, I only just received the one about RWS Holdings (LON:RWS) acquisition and placing at 9am; however the shares had already been marked down at 8am. Anyone else experienced this?

That aside, it would be great to get Graham/Paul's perspective on this acquisition.

Richard Vasey

I would second the request for a view on RWS Holdings (LON:RWS) placing and proposed acquisition

jpatel12

Graham, Could you review Secure Trust Bank (STB) and Softcat (SCT)?

Hi Camtab,
For more priceless observations of the testicular variety, look no further than Paul's twitter feed...

Francis

Has anyone looked at the relationship between Momentum Trap and multi baggers?

andrea34

David,

I use trustnet for my RNS, I find them very good, the following link gives you everything, but you can then search by EPIC or company name:

https://www2.trustnet.com/Investments/LatestAnnouncements.aspx?searchtype=-1&words=0&pno=1

Andrea

MichaelFBS

Thanks Paul interesting.

When you say “just using the monitor service” is this on ADVFN? I don’t subscribe to ADVFN.

Like you I am looking forward to the new version of the Stockopedia web site and hope that it offers RNS alerts.

I also use Vox which works for me.

Good luck with the court case.

Michael

InvestedGeordie

Judge: You have been charged with the crime of replacing Two velux windows - How do you plead?
PP: Not Guilty!
*Cheers heard from Gallery*
Judge: Very well - proceed.
PP: I call my first witness, Alan, the man who fitted the windows

The case continues

jonesj

I haven't checked this specific case, but RWS have been acquiring relevent add on businesses for a long time & it's been going well for years.

Re RWS, I bought recently on the very positive trading update, and I see the price has gone almost back to where I bought it at on today's acquisition news - maybe investors are scared at the pricing of the placing... but to me it looks a pretty good, and profitable, fit... so I have bought some more. Here are the pertinent details for anyone not reading the RNS:

RWS Holdings plc... today announces that it has entered into an agreement to acquire the entire issued share capital of Moravia US Holding Company, Inc. and Moravia Lux Holding Company S.à r.l., a leading provider of technology-enabled localisation services, from Moravia Holdings II, LLC for a cash consideration of US$320m plus working capital and certain other adjustments and transaction costs. The Consideration, adjustments and transaction costs are intended to be funded by a c.£185m (before expenses) cash placing of new ordinary shares in the capital of the Company, details of which have been announced by the Company separately today, and a new US$160m term loan which will refinance the Group's existing facility (the "New Facility").

The Board believes that the Acquisition has a compelling strategic and financial rationale as it:

• Brings to the Group a highly successful business with a strong track record of profitable and cash generative growth:

• Long term relationships with some of the largest publicly traded technology companies in the world

• Has increased revenues by a CAGR of 26.0% from US$100.3m in 2014 to US$159.2m in 2016 and adjusted EBITDA by a CAGR of 52.6% from US$11.6m in 2014 to US$27.1m in 2016

• Creates a third RWS division of scale with significant growth prospects:

• Growth opportunities include increasing share of wallet with its long-standing clients, winning new clients, introducing complementary solutions and growing new verticals and geographies

• Further diversifies RWS, as it is expected to represent approximately one third of the enlarged group's profits, and strengthens its global operational base

• Provides significant additional market opportunities for both companies due to their complementary business activities, geographies and client base, including the potential cross-selling of patent translation services to Moravia's intellectual property-rich clients

• Brings a strong, well established management team to the Group

• Is at an attractive valuation for one of the few major localisation providers focussed on the high growth technology sector in a highly fragmented market

• Is expected to be highly and immediately earnings enhancing for RWS shareholders

CatNip

Revolution's CEO has just resigned....

http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1508321746188585500.html

rustle2

But at 11am. Price rising since ...

Tortoise investor

I see the Government has today launched a review on further measures to improve the regulation of residential managing agents. This is probably a further headwind for traditional estate agents (Purplebricks (LON:PURP) has fairly limited exposure to lettings).

Link here: https://www.gov.uk/government/...

Howard Adams

Hi Paul/Graham

I wonder if you might take a look at Hilton Food (LON:HFG). (I hold)

I know its Market Cap is now £583.8m a little above your normal cut off.

You did however, cover it in the SCVR 04/11/16. Back then share price was 596.5p, Mkt Cap £439.0m and number of shares 73.6m. https://www.stockopedia.com/content/small-cap-value-report-4-nov-2016-botb-gatc-hfg-dia-qrt-svca-156934/

Today Hilton Food (LON:HFG) announced intention to purchase Iceland Food Group for £80m and do a placing of 55.9m shares at 760p a share.

Share price is up 5%+ (at time of writing) with share price of 832.5p (up 39.6% since the previous SCVR coverage) and Mkt Cap now at £583.8m.

The market is taking a positive view of this it seems. I would welcome your thoughts if you would still consider covering it today (others might be interested as well).

PS Paul I wish you well with your skylights issue. These things can be very problematic.

Regards
Howard

kbkb

Good luck with the idea...seems sensible and should be interesting to read as a 'subscriber'.

Small Cap Value Report (Wed 18 Oct 2017) - RBG, FLYB, FOXT

Revolution Bars (LON:RBG)

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Paul Scott

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