Member Info for rivaldo

Good to see that November CPO revenues were only just behind last year's given that year's exceptional production.

There are some additional positive takeaways:

- cashew production nicely on track to meet targets
- European trade buyers impressed with DKL's cashew quality
- CPO prices still well above average
- forthcoming CPO high season showing "hopeful" signs of return to good volumes

The proof will be in the pudding, but a combination of a decent CPO high season plus fast rising cashew sales would be the dream scenario!

Good to see VLE consider 1130p still good enough value to be buying in, and just prior to the year end too:

Https://uk.advfn.com/stock-market/london/volvere-VLE/share-news/Volvere-PLC-Transaction-in-Own-Shares/89741648

SDI are now on a current year P/E of only 16 at 149p based on consensus 9.3p EPS. I gather that this is now around a 35% discount to JDG.

It also looks anomalous relative to many other valuations out there. Completely randomly, yesterday I looked at ABDP, which is on a P/E of 30.5 despite relatively pedestrian forecast EPS growth. FRP are on a P/E of 22 despite its EPS being almost unchanged from 2021 through to 2024 forecasts!

This despite SDI's almost 180% EPS growth in just three years to that 9.3p EPS. I would hope that current forecasts are conservative as usual. And as always they don't include any benefit from further acquisitions.

Finncap note that cash flows should enable SDI to have around £20m available for acquisitions, which they state could bring in around £3m of EBIT based on past multiples.

The December issue of Techinvest is just out, so it should be OK to copy the Buy tip for CNIC from November's issue:

"CentralNic
129.5p (CNIC; AIM)

In a trading update for the third quarter, CentralNic has reported continued momentum with 66% organic growth, resulting in an upgraded outlook for the full year. For the nine months ended September 30, the company expects to report net revenue of at least US$127m and adjusted EBITDA of US$61m. These figures represent growth of 49% and 89% respectively on the same period last year. Organic growth for the trailing twelve months is estimated at circa 66%, driven primarily by growth in the Online Marketing Segment. Cash increased to US$83m (equivalent to 29.3p per share) at the period end from US$63m a year earlier.

Separately, CentralNic announced that it has agreed to acquire Intellectual Property Management, a California-based domain name management business for an enterprise value of US$7.6m in cash, subject to customary adjustments for net cash and working capital. The purchase price is settled from existing liquidity reserves. The agreed purchase price represents 2.8x unaudited revenue and 7x adjusted EBITDA for fiscal 2021, and the acquisition will be immediately earnings accretive. CentralNic expects the acquisition to provide better coverage and increased market share in the North American market as well as synergies from streamlining procurement and operations.

CentralNic’s Online Marketing Segment continues to win market share as a result of the ever-increasing demand for online customer acquisition services that are privacy-safe. This is the key factor driving strong organic growth in the business. Cash generation remains strong and debt levels continue to fall, allowing CentralNic to consider further acquisitions of a similar scale to Intellectual Property Management. We rate the shares a buy."

Here's WH Ireland's initial view on the planned divestment - shadypants2's interesting point on the much higher margins in the retained businesses as opposed to the Vigilant guarding business being disposed of is noted here too:

Extracts:

"Today’s AGM update from CSSG highlights (1) continued inline trading, (2) plans to continue with the group’s strategy in recent years of consolidating the locksmith’s market, and (3) potentially a significant divestment (and accompanying Board changes) which would further that strategy.

The proposal to divest CSSG’s specialist guarding services, which accounted in FY22A for c.83% of sales and c.43% of operating profits (pre central costs) would significantly increase the focus on locksmiths (FY22A: 9% of revenues and 27% of EBIT) and electronic security (7% and 30%), and we note that the company has highlighted the ongoing “multiple” consolidation opportunities, in addition to the success of the two acquisitions made in 11/21 and 07/22, suggesting that funds raised from divesting manned guarding could be deployed further to advance the consolidation process in line with this proposed renewed focus of the business as a whole."

"In terms of the underlying characteristics of the businesses, as the data provided above makes clear, the proposed ongoing businesses are higher margin – respectively 14% and 19% in FY22A, as opposed to the low single digit margins for Vigilant which are typical of a manned guarding business."

Today's 2.5p tick up means TST are at 12-month highs in the run-up to the year end.

Finncap retain their 275p valuation.

They note that even at 275p the share price would still compare favourably to sector comparator JDG's current valuation.

SDI are still on a very decent value multiple, especially compared to its sector comparator JDG which trades on a much higher rating.

Here's Progressive's new note with 9.5p EPS forecast this year:

Https://progressive-research.com/wp-content/uploads/data-sync/research/SDI%2020221207.pdf?utm_source=sendgrid.com&utm_medium=email&utm_campaign=website

Extracts:

"Another strong set of results

"SDI Group has announced strong H1 results to 31 October, with the full year
expected to be in line with market expectations. Total revenue increased by
28.3% to £31.7m and adjusted operating profit by 19% to £6.9m. Despite
increased global economic uncertainty, SDI’s niche businesses, operating in
diverse end markets, have driven overall organic revenue growth of 3.8%.
Safelab Systems and Scientific Vacuum Systems (SVS) acquired over FY 2022
and LTE Scientific Limited (LTE) in the first half of FY23, contributed to the
strong sales growth, alongside the well-flagged, one-off Covid-19 related
contracts within Atik Cameras. Management notes that post-Covid
fluctuations in demand haven’t fully settled, but the general level of sales
enquiries remains strong. Our FY23 and FY24 estimates are broadly
unchanged, with the exception of an increased interest charge given the
current interest rate environment."

"SDI is benefitting from its niche positions and product diversity. Another
strong first half highlights management’s ability to execute its ‘buy and
build’ strategy and deliver outstanding results, despite residual Covid
disruption and inflationary supply chain pressures. SDI is well-positioned to
continue to grow underlying organic revenue and profitability, with a strong
acquisition pipeline underpinned by cash generation and financial strength."

"Summary and outlook

SDI remains focused on smaller niche businesses operating with a high degree of autonomy, allowing a fast response, with good opportunities to consolidate the highly fragmented markets that the group targets. Results with acquisitions so far have been exceptional, delivering strong financial returns and operational synergies. The specialist nature of technical, scientific, and medical and life science market segments offers a significant opportunity for increased shareholder value.

We also haven’t assumed a contribution from potential new acquisitions, which offers upside to our estimates.

The group is in a strong position financially, with good operational cash flows and a solid order book. Management continues to seek targeted acquisitions funded by cash flows from existing businesses and its £6m undrawn facilities, and given strong cashflow we forecast net debt to be broadly neutral by the end of FY24. We believe that SDI is in a strong position to continue to deliver its successful ‘buy and build’ business model."

New contract win for ACSO's eCommerce ticketing suite at the TFL's Cloud Cable Car over London for the next three years:

Https://www.accesso.com/news/accesso-powers-ifs-cloud-cable-car-ticketing-operations

The contract win is good to see, but in particular it's interesting to see this achieved in partnership with Mace. Mace are huge - they had almost £2 billion turnover in 2021. Hopefully Mace might provide significant additional business in ACSO's direction.

Encouraging H1 results, with 5.02p adjusted EPS in H1 (up 28%), which puts SDI in a strong position to at least meet expectations of 9.9p EPS for the year.

Particularly as H1 brought two major new acquisitions which will fully contribute to H2. And also because Atik appears to be benefiting from some Chinese PCR camera sales for H2 which I'd assumed would have finished in H1 - these seem to have been paid for in advance but not yet recorded as sales.

The outlook is confident in meeting expectations, and with increased headroom from HSBC there's still a stated appetitte for more acquisitions. Sales enquiries are at a "strong level" and SDI are coping well considering all the current constraints on component supplies, labour, pricing etc.

If these various factors begin to settle down then SDI should be in a position to do even better.

FYI, today's RNS shows BGF Investment's holding in ADF is unchanged at just above 15.3m shares, or now 19.29% - it's just their percentage holding that's reduced as the 3.4m shares issued on the new acquisition were admitted to AIM today.

The CFP SDL Free Spirit Fund, run by Keith Ashworth-Lord, today issued its monthly fact sheet for December. CLX are the third largest holding at almost 6% of the fund, and they had this to say about CLX:

"The second-best performer was Calnex Solutions (+27.3%), which is nearing its one-year anniversary as part of the Fund. Interim results, published on 22 November, showed revenue and profit before tax up by 38% and 34%, respectively, with supply chain challenges being successfully navigated and orders shipped as scheduled. The continued roll out of 5G together with data-centre opportunities provides substantial long-term growth opportunities in a market where Calnex continues to be market leader, and in some cases, the only provider in its respective markets. This is exactly the sort of business we look for."

New fragrance oil contract implementation news:

Https://www.touchstar.co.uk/blog/fragranceoils-case-study

Conclusion:

" Results

The hardware implementation phase took 6 months from start to finish. TouchStar were highly commended for their support in this time, checking device compatibility and connectivity with the newly developed IT system, all of which contributed to a smooth deployment of the final scanning solution.

The new TS8200 handhelds now play a fundamental role within the newly upgraded manufacturing process. From receipt of order, the TS8200 provides detailed dosing information on the devices robust and high-resolution display.

All of the raw materials going into the production process are now also barcoded, not only does this enable real time location visibility and traceability, but from an accuracy perspective, the system ensures that the right product is scanned before it enters in the production process, resulting in reduced errors and an increase in right first-time manufacturing.

Furthermore, the system has also been extended to the goods out, providing additional accuracy with regards to orders shipped and extending visibility into the transport and distribution process.
Benefits and the Future

Fragrance Oils are an excellent example of how real time scanning can benefit businesses within the manufacturing sector. Ian concludes, “The barcode scanning process has enabled the teams to improve dosing accuracy & to reduce the level of rework & scrap generated in our process. This has a positive impact on our operational costs & has helped us to improve our customer service.”

Since the implementation, Fragrance Oil’s are continuing to look at ways to develop and enhance the solution. Plans for a new wi-fi network will allow for greater connectivity and will enable the business to extend the use of the technology into other areas of the business. The potential for the use of barcode scanning within the warehouse operation offers Fragrance Oil’s the additional benefit of real time visibility and traceability of their of goods outside the production process.

Since the installation, TouchStar’s mobile computing solution have continued to evolve, with further growth and development of both their hardware and the portfolio of solutions. This will ensure that Fragrance Oil’s will continue to invest in a solution that will meet their needs both now and into the future. "

"

New blog post from FNX extolling the virtues of carrier billing versus credit card payments:

Https://www.fonix.com/blog/direct-carrier-billing-vs-credit-card-payments/

It's been rising each of the last few days, and is up a full 1p today already.

Intriguing!

The two remaining divisions made £0.9m operating profit between them last year. CSSG would also have a cash pile after the disposal of (say) £8m-£10m.

Which compares pretty well to the £8m m/cap at the current share price.

Well well....looks like the manned guarding business will be sold off to its management and the focus will be on security systems and locksmiths expansion.

Vigilant made £0.7m operating profit last year, so what might it be sold for - say £5m+?

CSSG already had £2.6m net cash at the year end and this looks like it was rising fast up to November due to debtor collections.

Numis say Buy with a 900p target. They forecast 60.3p EPS this year, with an 18p dividend.

They also see a £27.6m cash pile (pre-IFRS16) at the end of this year.

Extracts:

"Strong FY22 results and acquisition of Enisca

Renew's FY22 results were ahead of expectation even after a positive pre-close update, and in our view reflect a business and management team that is continuing to deliver even in a toughening macro backdrop.Today's bolt-on acquisition of Enisca further enhances the Group's capabilities in Water, and serves to offer another demonstration of Renew's value-compounding business model. With the shares trading on c.11x FY23E PE and c.8x EV/EBITA, we remain positive."

"Forecasts: Reflecting the stronger than expected FY22 performance and the Enisca acquisition, we increase our FY23E EBITA forecast by 8% to £62.0m, and our FY23E EPS forecast by 9% to 60.3p. We upgrade FY24E EBITA and EPS by 6%. We forecast an FY22-25E EBITA CAGR of c.4%, noting the Group's strong track record of positive earnings momentum both organically and from M&A and a FY16-22 EBITA CAGR of 18%.

•Valuation: The shares trade on a FY23E PE of c.11x and EqFCF yield of c.7%. Given the Group's track record of compounding organic growth and accretive M&A, its strong balance sheet, and high ROIC, we believe the shares merit a premium rating relative to sector peers."

Nice start to the week - up 2p already.

Nice post 3 days ago from Coastline Housing praising to the skies Cenergist's Control Flow products:

Https://www.facebook.com/CoastlineHousing/photos/a.10150196520920004/10167013904395004/

"Coastline Housing

Coastline has formed a partnership with Cenergist and South West Water to help our customers save water and money and we're pleased to report some quite astounding statistics coming through just four months into the project.

As utility costs increase more customers are seeking ways in which to save money sustainably. Reduction of water use, which will help to impact on both supply and waste costs, has not been explored by many landlords.

This new partnership sees us working with Cenergist, a specialist water auditing company that is already in the process of conducting a water saving programme in partnership with South West Water.

The programme is completely free to Coastline customers, funded by South West Water and managed by Cenergist.

The audits involve installing a flow control valve reducing water wastage and saving customers money on their energy and water bills. During the audit Cenergist will also check for leaks and rectify where possible. Phase One of this project started in August 2022 and includes around 2,000 Coastline homes, mainly in Helston, Redruth and Camborne areas.

So far, Cenergist colleagues have visited 454 Coastline properties and believe they have saved the average household around 30.2 litres of water per day. That adds up to a whopping 4,905,235 litres each year!

Watch out for a letter soon informing you if Cenergist will be visiting your property, and we hope it helps a little with your water bill in future."