Member Info for rivaldo

Today's RNS hopefully indicates the size of ACSO's ambitions. They already have a $60m+ cash pile, but have agreed $60m of new banking facilities to enhance their "ability to execute value accretive acquisitions".

There may be some interesting corporate action in the pipeline.

More from Leo Lithium - they've raised A$106m from China's largest lithium producer at a 6.5% premium to their share price at the time:

Https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02670299-6A1151864?access_token=83ff96335c2d45a094df02a206a39ff4

Leo's share price has rocketed up to A$0.935, so CAPD's 10.35m shares in LLL alone are now worth £5.1m and have almost doubled since the year end.

Nice commentary just emailed out from Investors' Champion - "compelling value":

Https://www.investorschampion.com/channel/blog/compelling-value-ai-appeal

"Compelling value

Volvere (AIM: VLE), the growth and turnaround investment company, announced results for the year ended 31 December 2022. This proven performer certainly looks compelling value at current levels.

Volvere identifies and invests in undervalued and/or distressed businesses, as well as businesses that are complementary to existing Group companies. The sole activity of the Group's continuing trading subsidiary, Shire Foods, is food manufacturing.

Shire, in which the Group has an 80% stake, was acquired in 2011 and manufactures frozen pies, pasties and other pastry products for food retailers and food service customers from its factory in Royal Leamington Spa. Volvere originally invested £500,000 in Shire for a 54% stake - it appears to have worked out rather well.

Group revenue from continuing operations (all Shire Foods) in the year rose 24% to £38.03m and the profit before tax from continuing operations more than doubled to £2.33m (2021 restated: £1.07m).

The closure of Indulgence Patisserie in the period was the first unsuccessful turnaround in Volvere's 20+ year history with the resulting loss for the year from discontinued operations £2.4m.

We commend Volvere for not mentioning the fairy tale EBITDA anywhere in its results!

Following share buy-backs, Volvere's total net assets at the year end were £35.75m, largely made up of cash and available for sale investments of £20.79m. Net assets per share of £13.90 compares to the current share price of £11.50 and market capitalisation of £27m, implying a 17% discount to the net asset value alone.

Exclude the cash and available for sale investments from the current market capitalisation assigns a value of only £6.2m for the Group’s 80% stake in the Shire Foods business. This seems very low for a business delivering excellent growth and profits (4 year CAGR: 38%) and c£2m of free cash flow in the most recent financial year. Put differently, we assume Volvere management would want a great deal more than £6.2m for the Shire business!

As a very rough guide, speciality bakery manufacturer Finsbury Food Group (AIM:FINS) trades at 8.9x forecast ‘adjusted’ earnings. Finsbury also carries some debt with the market capitalisation £122m and enterprise value £149m. There are also mercifully no adjustments in the Volvere numbers.

Volvere shares are unfortunately extremely illiquid with its share buybacks not helping matters."

A small £360k placing announced this morning, but at 3p - unsurprising given the markets, but explains the recent drift. And TB has yet again participated with another £30k, along with "existing institutional and other investors".

Interesting to hear that a competitor of RDC's has gone into administration, and that this has given rise to "potential new opportunities". Might this include taking on the assets of the competitor, or at the least winning its customers? I'm willing to bet that the competitor was partly screwed by energy prices - unlike CMH.

Plus there's good news on trading:

"For the year ended 31 May 2023 ("FY 2023"), the Group expects to report revenue of approximately GBP20.5 million, slightly ahead of market expectations and profit after tax of GBP0.1 million, in line with market expectations."

And:

"The Group has continued to deliver on its turnaround strategy with all business units now profitable.....The Board expects the Group to be cash generative in FY 2024 through a combination of revenue growth, profitable operating performance and organic reduction in net debt"

Nice bounce. Hopefully just the start of a climb back past 200p for starters....

Ken Wooton did a presentation on Tuesday at the Mello investment conference on behalf of Strategic Equity Capital/Gresham House. They of course have a large holding in INSE, and Ken ran through a few companies in their portfolio. INSE was one of the companies he highlighted.

In particular it was good to hear him confirm that he and other large shareholders had been consulted and approved the recent renegotiation of the Ignite deferred consideration.

Even better, just realised that the true PBT from Shire Foods alone before intra-group charges etc was £2.78m - this up hugely from £2.14m in 2021.

Leo Lithium's share price has risen 55% to AUD$0.745 since the year end, which with CAPD owning 10.35m shares in Leo is good news for this half year if maintained.

They've just announced "excellent" drilling results from their Goulamina Lithium Project, and CAPD are namechecked in the announcement as the driller, with drilling continuing:

Https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02668908-6A1151351?access_token=83ff96335c2d45a094df02a206a39ff4

Full results for 2022 are out and in line with the trading statement.

Shire had a stellar year, with PBT at £2.33m up hugely from £1.07m. Such a shame that the small (at the time) Indulgence acquisition proved to be VLE's first failure.

At the year end there was £20.8m net cash and £35.75m net assets against the current £28.2m m/cap (with 2.35m shares in issue).

The commentary re Shire going forward remains optimistic, with energy and raw material prices abating, increased capacity etc.

VLE have confirmed that one of Indulgence's properties was sold post year end (from memory around £750k?) and the other property, worth £1.635m, is to be split into two - the two can now be seen here:

Https://www.rightmove.co.uk/commercial-property-for-sale/find.html?searchType=SALE&locationIdentifier=POSTCODE%5E1732470&insId=1&radius=0.0&displayPropertyType=commercial&businessForSale=&minBedrooms=&maxBedrooms=&minPrice=&maxPrice=&areaSizeUnit=sqft&minSize=&maxSize=&partBuyPartRent=&maxDaysSinceAdded=&includeSSTC=true&_includeSSTC=on&sortByPriceDescending=&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&newHome=&auction=false

Meanwhile... Liberum have now issued a huge 60 page Buy note, with a 335p target price!

They forecast 15.3p EPS this year, rising to 18.9p EPS and then 22.7p EPS.

They also forecast a £5.7m cash pile at the end of this year, and a 1.4p dividend.

That's tonight's reading sorted....

Been at Mello investment conference all day. Obviously surprised at the extent of the reaction to today's disappointing news. On the other hand, unsurprised given as oft previously commented (1) the illiquidity due to the small free float and (2) the presence of a large seller for some months now as evidenced by online limits. Which raises further questions about either the seller's perceptiveness or their forwarnedness (is that a word?). But that's something else entirely...

Also as previously posted, I was most fortunate in deciding not to add to my prelimiary holding here :o))

Management have blotted their copybook, perhaps due to naivety as this is a relatively new IPO/young company. We were aware of revenues being pushed into this year, but the effect of so much lower margins due to a different revenue mix surely deserved much more commentary than was provided.

Nevertheless, on fundamentals and prospects I suspect the share price fall is well overdone. The share price might hang around for a while until evidence of an uptuen in margins etc, or there might be a sharp bounce given the illiquidity and an overhang clearance as discussed.

This sounds nicely disruptive as "the first tier-one restaurant and retail solution designed specifically for the cloud":

Https://uk.advfn.com/stock-market/london/accesso-technology-ACSO/share-news/Accesso-Technology-Group-PLC-accesso-Announces-New/91132241

"accesso Technology Group plc (AIM: ACSO) , the premier technology solutions provider to leisure, entertainment, and cultural markets, today announced the launch of accesso Freedom - accesso's robust, fully hosted point-of-sale (PoS) platform and the latest addition to the Group's suite of industry-leading technologies.

accesso Freedom introduces a new standard in cloud-native restaurant and retail PoS for multiple venues, including theme parks and attractions, ski areas, cultural venues, resorts and casinos. The platform builds upon intellectual property acquired from solutions provider Omnico Group in July 2022.

Omnico Group served as the leading restaurant and retail PoS provider for leisure and entertainment industry operators, supporting more than 200m guests per year at many of the world's most prestigious venues. Leveraging that depth of experience and functionality, the newly designed accesso Freedom solution delivers a fully hosted restaurant and retail revenue platform optimized for speed, robust transactional support, flexibility and ease-of-use.

accesso Freedom is the first tier-one restaurant and retail solution designed specifically for the cloud. The Software-as-a-Service solution allows customers to unify restaurant and retail transactions on a single platform, and is designed to scale seamlessly for venues of any size.

The solution is built to serve the rapidly evolving marketplace in shifting from traditional point-of-sale terminals to more forward-thinking options, including mobile ordering, kiosks, self-service retail check-out. Powerful integrations enable operators to leverage emerging technologies such as chat bot ordering and voice-based transactions.

"Today's guest requires convenience and flexibility, and the industry needs a solution for restaurant and retail selling that can deliver on those demands" said Steve Brown, accesso CEO. "With the launch of Accesso Freedom, we are proud to usher in a new era of consumer engagement for an expansive selection of venue types across the leisure, entertainment and hospitality sectors."

Liberum say Buy with a 20p valuation after today's news. Here's their summary and conclusion:

"Inspired announces a Deed of variation signed with the vendors of Ignite. It provides maximum additional consideration of £9.25m. We make four key points: 1) The new earn-out requires delivery of certain targets, which our analysis shows, are stretching. 2) The statement says the additional contingent consideration (CC) is self-funding. 3) The purpose is to incentivise the Ignite management. 4) The

acquisition of Ignite remains an attractive deal, with a possible CY 24 EV/EBITDA of 2.7x. We maintain our BUY recommendation and TP of 20p; A CY 23 P/E of 9.4x

represents growth at a reasonable price."

"We maintain our BUY recommendation and TP of 20p; A CY 23 P/E of 9.4x represents growth at a reasonable price

We maintain our BUY recommendation and TP of 20p; A CY 23 P/E of 9.4x represents growth at a reasonable price. The strong credentials should become a positive share price driver, even though Inspired still trades like an energy company. Using a sum of the parts, we derive our target price of 20p."

Overall this looks promising for INSE imo, extending the timeline for the Ignite consideration out to 2027 and presumably locking in their management until then for a growth phase which could transform INSE.

Obviously the preferable option would be no additional consideration, but it's easy to see that Covid knocked out two years of calculations for the initial agreement, so a renegotiation was always on the cards and getting consensus on strategy through to 2027 strikes me as a good thing.

"Lab services growing like topsy

If that’s not enough to whet your appetite, Capital also holds two wild cards in its pack. First, back in 2017 it acquired a small laboratory business providing multi element analysis, mainly to get its accreditation status. Miners are obliged to use an independent third party lab for such tests to verify their resources in order to gain bank finance but as Boyton says, the original method using Fire Assay tests was too slow and used unfriendly lead. However, Capital has subsequently secured a licence to roll out photon assay machines, a new technology that literally scans a box of rocks in a container and generates the results in minutes.

Lab revenues have already soared 10-fold from US$3m in FY’19 to US$30m in ‘22 and analysts are targeting US$75m in FY’24 with units deployed to rise from 5 to to 20. This is a low capital intensity, highly profitable (FY’24 EBITDA forecast margin: 35%) business, with higher revenue “stickability” while it adds potential for Capital to cross-sell its other mining services. As Labs increases its share (and therefore the quality of earnings) of an enlarged revenue base, this could lead to a re-rating in the shares.

Investments

The second wild card is that Capital holds a lucrative portfolio of mining investments, some as payment in kind for works provided, which has increased in value from US$11m to almost US$40m. The largest and most exciting is Predictive Discovery (ASX-PDI; US$20m value), which discovered the Tier 1 Bankan gold project in Guinea (inferred resources: 4.2 million oz and growing). The others include private African gold producer Allied Gold Corp (US$8m value) and Leo Lithium (ASX-LLL, US$4m) whose “world class” Goulamina lithium mine is slated for first production in 2024. With the downside protected by its asset base and the low PE of 6.3, I am a buyer."

CAPD were tipped by Momentum Investor magazine (SCSW's sister publication) a couple of months back - since this is now history it should be OK to paste the introduction and conclusion here:

Https://www.momentuminvestor.co.uk/

"Capital Ltd - Mining services firm enjoys buoyant gold market; rising margins not reflected in PE of 6.3

March 2023

Epic Code: CAPD Price: 103.5p

During the month, I met with Jamie Boyton, executive Chairman and co-founder of Capital Limited, an African-focused, mining services company that helps gold miners extract the metal from the ground.

Capital has already beaten forecasts twice in the past six months (most recently in an update on 18 January) with a strong gold price only one of several factors driving its strong performance. Yet despite the broker upgrades, attractive margins, bullish outlook and conservative leverage, the shares are cheap, with Berenberg’s eps forecasts for US 20 cents (16.3p) for FY’23 and 22 cents (17.9p) in ‘24, implying a low prospective PE of 6.3 and then 5.8.

One keynote differentiating Capital from rivals is that it is no longer reliant on the more discretionary elements of a miner’s budget such as exploration and de-lineation (where it maps out where the reserves and resources are); instead, its mainstay is from rental of drilling rigs and excavators alongside service personnel. In addition, it has a fast growing laboratory services division, which helps miners independently verify their resources to gain bank and / or equity funding."

"Strong outlook for gold and rare earths

The future also looks bright for Capital when it comes to prospects for its customers, linked as they are to gold prices. Industry data shows world gold reserves have fallen from almost 35 m oz in 2012 to 30m at present and a great degree of catch up mining is required.

Gold has been on a tear over the past four years, rising from US$1,240 / oz at the end of 2018 to the current US$1,884 / oz, not far from all-time highs. Swiss Asia Capital reckons the current conditions mirror those of 2001 and 2008 when gold tripled in quick time as investors anticipated major economic stimulus ahead of shocks (dot com bust / Iraq War and Global Financial Crisis, respectively).

Meanwhile, Boyton is branching out to new markets also, including rare earth metals such as nickel and lithium, which are used in electric vehicle drive trains and wind turbine generators. Annual lithium demand is projected to roughly triple to 1.5 million metric tons of lithium carbonate equivalent between ‘21- ‘25 and over 3 million tons by 2030 with EVs expected to account for 84% of demand in 2030, from 55% in 2021."

Many thanks to the Private Punter for this excellent new write-up - great to see TST attracting some attention now. Here's a direct link:

Https://martinflitton1.wixsite.com/privatepunter/post/touchstar-is-aiming-high-19-05-23

Following the 90% increase in RNWH's Specialist Building's order book to £110m since the year end, an encouraging news update issued late last week from Walter Lilly:

Https://www.walterlilly.co.uk/our-facilities-management-department-turns-two/

Nice start to the week, with just a £5k buy causing a tick up.

Shanta Gold have this morning announced good progress at West Kenya where CAPD are contracted, with drilling recommencing on a $10m budget this year:

Https://www.londonstockexchange.com/news-article/SHG/2023-group-exploration-update/15965482

"West Kenya

· Current resource of 1.76 Moz grading 5.55 g/t expected to increase to approximately 3+ million ounces over time

· Up to 26,000 meters drilling across 80 holes

· Centered around the Isulu and Ramula deposits

· Targeting both conversion to Indicated category plus resource extensions

· Third party consultants are now being engaged to accelerate technical studies

· Workstream toward mining licence application and permitting is now underway

· Total 2023 budget of up to US$10 million, consistent with previous years"

Shareminator, CAPD's holding in Allied Gold was previously completely illiquid as of course Allied Gold was a private company. An IPO would crystallise almost $18m of liquidity for CAPD! Which is almost 8% of CAPD's total m/cap by itself, even without the rest of the investment portfolio.....