The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Well, it's quite unusual to find a small profit-making tech company... especially one positioned to take advantage of a growing demand for its services in both commercial and now the domestic markets. We've all seen enough ridiculous valuations for non-profit making companies to know that, if the wind gets behind this one, a 60m valuation will seem like a dream. It's consolidating before the results, but I reckon the range will soon be 120-140... especially with another prestige contract win. Where one goes, others follow. I never really believe in all that 100 bagger stuff, too much hype, but I do believe in this company's product... so you never know.
I was just trawling through the accounts with a view to the net cash position of the company. This note on cash flow seems very relevant:
...the Group cash outflow was £0.95 million against the comparable 2019 figure of £1.51 million. The net cash outflow is far lower than the reported adjusted operating loss of £2.15 million reflecting the advance billing nature of the Group’s SaaS business model, which included a payment of $1.13 million for years 2 and 3 of multi-year prepayment arrangement with largest customer in US which was signed in FY20 and delivered early in this financial period.
As at the end of February 2021, cash has improved to £4.62 million and net cash less the Group debt facilities was £2.69 million.
That last line is what you would expect to be happening if they are speeding up receipts from customers. In other words, customers are paying promptly, because they see the need of the company's services. Also only 2% of debtors are over 120 days, despite COVID. All of which basically means, they aren't flattering their income, if anything they are understating it, and they're on target to hit breakeven (or very close to it) for full year. Of course things could change, but my thinking it's more likely to be for the better, which must have come across at the investors meeting. The recent share price isn't a spike, it's a readjustment to reflect the improving financial position. Just my take on it!
Everything points to a steady rise from here with 5.40 ish as the first main pause.
they surprised the City with a share buyback...
It's not so much the year end results that will be important, it's the guidance on how this year has started that'll make the difference. The current share price is way off analysts' forecasts, suggesting the market will play catch up on certainty... and the dividend yield.
I reckon the potential benefit to BAE of the UK joining the Asian version of NATO has been overlooked by the markets. If it goes ahead, it will involve commitments by the UK that should benefit BAE particularly, mainly because of its tech defence and unmanned capability... the stuff Biden also says he is also keen to fund/develop in the US...
If you double the capital value from here it's still only 66m. Double the share price and it over £1. However, if this closes above 55p, I think it's more likely to move quite quickly into that 70p-80p range I mentioned. Fingers crossed. I have a lot of these at an average of 32p.
It's the dot you need, probably: BP.
Dartron, good call. I can't watch these things daily, so I tend to look long term. I was a big holder in Biff from a time after the float, but sold as it approached £3... mainly because of the debt. Now it seems to me that they didn't raise enough capital. They just don't generate enough cash at the moment. I would expect this to rise to 2.20ish before the long decline begins. Hope I'm wrong, but this seems to me to be a classic spiker. I'll look in again next year sometime.
PCI Pal®, the global provider of secure payment solutions, has been announced as a finalist in the 2020 Retail Systems Awards for its new PCI Pal Digital solution in the omnichannel solution of the year category.
The awards, which are in their 15th year, celebrate excellence and innovation in the retail sector and brings together the industry’s best for a notable occasion in the retail technology calendar. Winners will be announced at an awards ceremony on 19th October 2020.
Talking about the shortlisting, James Barham, CEO, PCI Pal said, “The market is experiencing a shift towards digital engagement and, as retailers add more digital solutions to their customer engagement strategies, it will be important to ensure adherence to increasingly stringent compliance and data privacy rules and regulations.
“Across our suite of solutions, including PCI Pal Digital, Agent Assist, and IVR, we enable a true omnichannel secure payments environment for retailers taking Cardholder Not Present payments – via any conversational channel across the globe. We are delighted to be shortlisted for the Retail Systems Awards and look forward to the winners being announced later this year.”
Excellent post. The only proviso I would add to that is, if they hold the dividend for this year then the low (if there is one) will come after the ex-date (perhaps that's what you meant and I mis-read). If held, it's worth 10p on this price immediately. So support on the downside should hold in that case. The threat of cancelling the dividend or lowering it, has been the stick with which they have beaten down the price. Once the certainty is there, that it's covered x2 and a 6% yield is available then the steady recovery will begin - at lease to 1.40. If I see sub £1 I will definitely be adding too for the long term. I want the income. I see JP Morgan are overweight for this stock now... 1.82, for what it's worth.
It occurred to me that (and I'm sure it has occurred to others already) by having Huawei integrated in the BT system it effectively gave BT protection from the US by making a US takeover (or merger with Sky) less likely - because it would be unpalatable to regulators over there. By being forced to strip Huawei out, BT has effectively been forced to make itself more attractive to Sky's parent company... especially in an atmosphere of industry merger. Maybe that's why BT is delaying the strip out as long as possible? I reckon, DT will soon need to watch its back, if it really is interested in BT. Like I said, just a thought.