Member Info for rivaldo

Very cheap imo - hopefully this will grab some more attention:

Https://www.dailymail.co.uk/money/investing/article-10957265/SMALL-CAP-SHARE-IDEAS-Sureserve-set-benefit-UK-going-green.html

Conclusion:

"Only two brokers follow the stock – Peel Hunt and house broker Shore Capital – and both rate the shares a 'buy', with a mid-range target price of 121p compared to the current share price of around 82.5p.

'Given Sureserve's earnings quality and long-term growth prospects – enhanced by the recent growth strategy – we believe the valuation is compelling,' Shore Cap said, citing a price that is barely more than 10 times projected earnings per share for the current financial year.

Peel Hunt says the stock continues to offer 'significant value given potential for double-digit organic growth in our view, supplemented by M&A [mergers & acquisitions] given the company's cash resources and FCF [free cash flow]'.

The company has high revenue visibility from long-term, regulatory-led local authority and housing association contracts.

Leadership positions in non-volatile markets with recurring, predictable revenues should ensure long-term sustainable growth while the sizzle should come from consolidation opportunities in what is a highly fragmented and regional market."

This time for $850,000....that'll help this year's figures along nicely:

Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Contract-Wins/88473687

"? Undervalued: Shares trade at 4.8x FY23 EV / EBITDA compared to a peer average of 7.3x, which is not reflective of the Group’s attractive growth opportunities or cash generation, in our view. The average of our valuation estimates (peer mean EV/EBITDA, DCF, regression analysis) gives an estimate of 60.1p per share, or 126.8% upside to today’s price. In the long term, we believe the company could reach £50m in revenue and 30% EBITDA margins, with the scale provided by acquisitions and organic growth. Valuing this long-term potential EBITDA (£15m) at sector mean multiples (7.3x) indicates an enterprise value in excess of £100m."

FYI here's Zeus summary from their initiation a week ago, with a 60.1p valuation:

Https://zeuscapital.co.uk/log-in/research-portal-login/#/portal/zeus-capital

"Initiation of coverage

SysGroup is an award-winning provider of managed IT services, cyber security, cloud hosting and IT consultancy. The Group offers investors an attractive business model with high recurring revenue and a diversified customer base. SysGroup is competitively well positioned to benefit from sector trends and is investing in sales capacity to take advantage of cross-selling opportunities and a recovering market. In addition, the company has opportunities to make highly accretive acquisitions and its shares trade at depressed multiples that we believe do not reflect the company's strong fundamentals.

? Financials: In the year to 31 March 2022 revenue declined 18.7% to £14.7m due to customers temporarily delaying IT refresh programs and scaling back contract sizes through the pandemic. However, most of this impacted lower margin Value Added Resale revenues rather than core Managed IT Services revenue, leading to only a 15.1% decline in gross profit to £8.9m. Managed IT Services revenue declined 10.5% to £12.8m and earned a 66.3% gross margin, whilst Value Added Resale (VAR) revenue declined 49.8% to £1.9m, at a 21.5% gross margin. Good cost control and the realisation of headcount synergies from prior acquisitions meant that adj. EBITDA decreased by only 3.4% to £2.8m and adj. PBT decreased 2.4% to £2.0m. Strong cash conversion (88% of adj. EBITDA to adj. CFO) led net cash (excl. leases) to grow to £3.3m at 31 March 2022.

? High revenue reliability: SysGroup has high revenue visibility (87.1% recurring revenue in FY22, supported mostly by contracts with a typical 36 month life at inception) and high cash conversion (88% in FY22). In addition, SysGroup has diverse industry exposure (largest sector is only 10% of revenue) and low customer concentration (c. 6% in FY22, with a target of <5% going forward).

? Forecasts: We forecast a 39.0% increase in revenue to £20.5m in FY23, driven by the post-Covid recovery in SysGroup’s existing business and two acquisitions made in April 2022. A structural shift in revenue mix (due to acquisitions and the recovery in VAR) means we expect gross margin to decrease to 55.0%, with absolute gross profit increasing 26.5%. Adj. EBITDA increases 18.9% to £3.3m in FY23 in our forecasts, accounting for some cost inflation and strategic hires. We expect FY23 closing net debt to be £3.1m (ex. leases), reflecting M&A outflows and conservatively recognising £3.1m of contingent consideration as debt. We expect this net debt balance to quickly reduce as SysGroup achieves 80-90% EBITDA to cash conversion with minimal required capex, notwithstanding further M&A. The high cash generation and banking facilities provide the firepower for future acquisitions that are not explicitly included in Zeus forecasts, but provide upside earnings potenti

"Management also flagged some risks from the broader energy crisis as well: “Market conditions, including record high commodity prices, have led to some customers delaying renewals of supply contracts, which is predominantly the point at which assurance customers contract with the group”, Inspired said in March. It added this was likely “a point of timing” issue rather than any greater demand drop.

Inspiration

Clear competitors for Inspired aren't obvious – there is eEnergy (EAAS)eEnergy (EAAS), a smaller Aim-traded company that does similar consulting work with a net zero carbon emissions focus. Others include in-house units from engineering giants such as Siemens, although these are focused on selling products internally. eEnergy also noted an uptick in interest because of the energy crisis. Inspired does have plenty of parallels with IT firms. Its software services division had a cash profits margin above 70 per cent last year. Sales are only around £2mn but this is a handy contributor to the overall profits figure, something the ESG division will not be for some years. Investors would be getting a stable company with longstanding clients. The Gazprom risk is clear – although the market reaction was muted after Inspired outlined the sales and profit knock from a potential collapse – and out of management's hands.

The company is on a good path in terms of ESG reporting and has headroom in terms of debt if acquisitions in that space look like an easier way of building scale. As the reality of these new climate reporting guidelines become clearer through this first annual reporting season with them in place, we imagine boards will be running to Inspired's door as well, especially those who already do business with the company."

"Inspired aims to get its enterprise value from around £200mn to £500mn in about five years. Obviously, this could be done by piling on debt and going on an acquisition spree, but Dickinson said he was keen for a “quieter 2022”, after raising equity in 2020 and making a handful of bolt-on acquisitions during the past two years.

The ‘assurance’ division is Inspired’s bread and butter. It has the strongest cash profit margins – near to 50 per cent – and contributes the most in revenue. The ‘optimisation’ unit, which sells energy efficiency advice and equipment, is set to overtake it in terms of sales by 2023, but with a far lower cash profit margin of around 20 per cent. The catch is Inspired sees the assurance market as “mature”. This means it might be good for 5 per cent growth a year in terms of sales, but won’t deliver serious increases. Where added sales are more likely to come from is cross-selling between divisions.

The new environmental, social and governance (ESG) unit is largely built around quantifying companies’ carbon output, a growing slice of Inspired given the tighter and tighter regulations around releasing this kind of data. Sales for the ESG division were under £1mn in 2021, but this was double the year before. House broker Shore Capital sees sales hitting £4mn in 2024. The outlook is very positive for this area. The government brought in new rules around climate risk reporting earlier this year, extending the Task Force on Climate-related Financial Disclosures (TCFD) rules to all listed companies, where previously only those with premium listings in London had to present a higher level of information.

Greater demands for climate risk data is already driving sales at Inspired: Dickinson said companies coming in the door looking for ESG reporting help and then paying for services from the assurance and optimisation divisions afterwards. “Does a company figure out how to comply with legislation themselves? Or do they give it to someone like us to do, when we’ve already got all the data,” Dickinson said.This approach is where Inspired aims to become so invaluable that companies will be unable to unbake the proverbial cake,and choose to go without Inspired’s services.

Contracts remain fairly small compared with overall revenue as well, mitigating risk from bigger clients pulling contracts. There is one significant risk in the wings, however,in the form of Gazprom Energy, the Kremlin-owned UK gas provider. Inspired said in March that 5 per cent of its revenues were linked to Gazprom contracts, through clients' supply agreements. If Gazprom was to go under this would knock up £3mn from 2022 cash profits. Since March, GazpromEnergy has remained trading and now the German government has taken control of its parent company, in an agreement set to last until the end of September."

Here's the full tip FYI:

""IDEAS
Get defensive with Inspired

Energy company orders climb as clients need to find savings on power contracts, while tightening ESG rules mean carbon tracking division is set for growth

Who doesn’t want help with their energy bills? For businesses, which don't have a price ceiling in the UK like households, gas and electricity costs are eroding margins across most sectors, alongside higher labour and transport costs.

In January, we suggested gas producer Serica Energy (SQZ) as a way for investors to make some gains on the back of spiralling energy costs. A significant increase in Serica’s share price has now been wiped away as the market has priced in the new windfall tax (Stifel even knocked its target price from 453p to 350p in response) but strong earnings remain locked in.

The fortunes of Serica are indicative of the risks involved in buying into cyclical and politically volatile industries. Following the energy cost theme, Inspired (INSE), formerly Inspired Energy, offers another ‘inflation winners’ bet. It acts as a middleman for companies negotiating power agreements and also advises companies on cutting their power usage. The recent surge in costs has seen interest rise in its ability to cut power bills, as well as the ‘optimisation’ division, which advises companies on cutting power use. Inspired also puts together carbon emission reports, a growing requirement for listed and private companies, with carbon metrics used increasingly as a performance metric,even being linked to debt costs for some companies.

Bill shock

The chair of Marks & Spencer (MKS),Archie Norman, put it plainly last week:“The cost of doing business is going up,taxes are going up, regulatory pressures are going up”. The winners would be those who“can trade well in the downturn” and have “efficiency opportunities”, he added. This is basically a stump speech for Inspired.

Chief executive Mark Dickinson said one major retail client had paid around £300,000 for his company’s services and saved around £20mn over five years as a result. At the same time as these services have come into higher demand – demonstrated by the order book for January and February almost doubling in value compared with last year – Inspired’s share price has come off a quarter, and the 14p share price level is not far off a 12-month low.

As power prices are set to remain high, this gives investors an opportunity to buy in at a value level.Growth is not spectacular on a year-on-year basis, in terms of sales and cash profits, but zoom out to a five-year horizon and it starts looking flashier: sales CAGR over that period is 26 per cent, while cash profits is 8 per cent. The cash profit tumbled in 2020 due to the pandemic (falling from £16.7mn to £11.2mn) but has quickly rebounded,with the consensus forecast for 2022 at £21.6mn as well. There are growth plans:"

Nice mention on Friday from Andrew Hore on i.i.i as one of three great AIM stocks to watch:

Https://www.ii.co.uk/analysis-commentary/how-aim-shares-can-bounce-back-2022-crash-ii524473

"Domain name and online marketing services provider CentralNic Group CNIC has been the subject of forecast upgrades this year, yet the share price has still fallen – even if it is by a lower percentage than AIM. The prospective multiple is 10, and that undervalues the potential growth."

Grgrantsu, completely agreed re ANX too!

INSE have initiated a money-saving energy efficiency scheme with British Gas for Star Pubs & Bars:

Https://www.morningadvertiser.co.uk/Article/2022/06/22/Star-Pubs-Bars-completes-money-saving-energy-deal-for-licensees

"22-Jun-2022 By Gary Lloyd

Star Pubs & Bars has used its bulk-buying power to thrash out a money-saving energy deal for its licensees that will last for a year.

etc"

Https://www.investorschampion.com/channel/blog/this-looks-a-cracker

"Eneraqua: excellent results and cracking value?

Eneraqua Technologies (AIM:ETP), the provider of specialist energy and water efficiency solutions, which arrived on AIM in November 2021, announced excellent results for the year ended 31 January 2022. You can read our previous coverage of its IPO here.

Eneraqua designs and delivers improved energy and water systems which use its Control Flow HL2024 technology to reduce water wastage and improve the performance of heating and hot water systems.

Energy was the first market Eneraqua entered, and this is the larger sector, with the focus on clients with end of life gas, oil or electric heating and hot water systems. Under the Cenergist brand the Group provides turnkey retrofit district or communal heating systems based either on high-efficiency gas or ground/air source heat pump solutions that support Net Zero and decarbonisation goals.

Water is also a growing service offering, focused on water efficiency upgrades for utilities and commercial clients including hotels and care homes. It has also expanded into agritech systems.

Turnover in the year to 31 January 2022 rose 148% to £36.2m while EBITDA increased by 319% per cent to £5.55m. Statutory profit before tax was £4.1m (FY21: £0.8m) after £1m of IPO related costs.

Management considers that the potential of its technology globally is huge and the initial success in India, with a £0.9m contract for The Department of Horticulture for the State Government of Uttarakhand, highlighting this. This contract will see them supply water systems to 340 horticultural farms across the state, helping to reduce carbon emissions and improving water efficiency. This is the first major zero carbon irrigation initiative of its kind in India.

Having listed at a share price of 277p the shares have held up better than most, sitting currently just below the IPO price at 271p.

The order book of secured and contracted work has increased from £74.4m at the time of the AIM IPO to £91.0m. This together with delivered revenue in the current financial year to date gives 95% cover on forecast revenue of £61.3m, which assumes growth of an impressive 69%.

Rising energy costs are prompting greater interest from local councils in the UK to reduce energy costs, concerned about rising fuel poverty in social housing, which is supporting a growing interest in the Group’s solutions.

Forecast profits of £10.6m equate to a healthy margin of 17%, while forecast earnings per share of 25.9p means the shares carry a PER of only 10.5x. By that simple measure alone, the shares look cracking value.

We also like the capital light structure of the business with forecast pre-tax ROCE a healthy 44%."

Great to see the CEO buying around £85,000 of additional shares to add to his already substantial holding:

Https://uk.advfn.com/stock-market/london/accesso-technology-ACSO/share-news/Accesso-Technology-Group-PLC-PDMR-notification/88447288

The US rig count surged upwards by 13 last week to 753:

Https://www.naturalgasintel.com/surge-in-oil-patch-lifts-u-s-drilling-tally-by-double-digits-in-latest-baker-count/

Enocuraging to see all the gains coming from land-based drilling, with the Permian Basin leading the way.

An encouraging AGM statement today, with optimism that full year trading will be in line (it's too early to be saying "ahead").

In particular, ARR is up from $4.8m at the year end to $6.8m now, along with the number of customers rising to 25 and non-telco prospects looking bright.

It seems that this company is at last on the right path.

"Over the last few years, the group has made a handful of strategic acquisitions and the ‘buy and build’ process is expected to continue – offering massive cross-selling opportunities as this tiny organisation expands both in size and in its service offerings....

The Equity

There are some 48.86m shares in issue.

Larger professional holders include Gresham House Asset Management (28.65%), Canaccord Genuity Wealth (18.42%), Herald Investment Management (7.05%), Helium Rising Stars Fund (6.96%), Downing Ventures (6.17%) and Praetura Group (3.50%).

Named private holders include Darren Carter (7.27%), Non-Executive Director Michael Fletcher (3.50%), The Fragrance Shop founder William Currie (2.78%) and Michael Edelson (1.76%).

Recent results and the ‘green shoots of recovery’

On Monday of this week the group declared its results for the year to end March 2022.

Last year it endured some corporate rationalisation at the same time as its revenues were impacted by the Covid-19 hassles.

They showed revenues down 19% at £14.75m (£18.13m), however its adjusted pre-tax profits were just 2% lower at £2.04m (£2.09m), the earnings came out at 3.6p against 3.5p per share previously.

The net cash at the year-end was 59% higher at £2.99m (£1.88m).

Adam Binks, the group’s CEO, stated that:

“The Adjusted EBITDA performance and strong cash generation in a year when turnover was impacted by COVID highlights the strength of our business model. We have invested to drive future growth whilst maintaining prudent financial discipline throughout the business.

Operationally, the Group is ideally placed to take advantage of conditions as they begin to normalise and we have started to see the early green shoots of such a recovery.”

Broker’s View

Analyst Bob Liao, at the group’s recently appointed NOMAD and broker Zeus Capital, has estimates out for the current year of £20.5m in revenues, £2.4m profits and 3.7p earnings per share.

Furthermore, he has compared the group’s growth opportunities and its cash generation with its peer group. In so doing he has put out an estimated valuation of 60.1p per share.

In the longer term he sees it generating up to a £50m revenue target, with a 30% EBITDA margin, which could give it a £100m enterprise value.
My View

One item I have kept until late in this Profile is the fact that the group lifted its annual recurring revenue for its last year by some 8% to 87% – I love it!

This little company offers some massive upside to patient investors – already its shares are cheaply offered in the market at just 26.5p, showing just 7.03 times current year price-to-earnings – that is far too low a rating and is also why I am confident of today’s Profile feature.

The current price is just 44% of the Zeus Capital value of the group’s shares.

My Target Price is a very easy 34p and could well be scored within months. In fact, I see them rising a great deal higher than that price objective, possibly

Https://masterinvestor.co.uk/equities/sysgroup-a-chance-for-sysadded-value/?mc_cid=e799b4f147&mc_eid=db9f9bbaf2

"SysGroup – A chance for SysAdded value?
By Mark Watson-Mitchell 22 June 2022"

"Ready for an upwards climb

Do you want to know what little stock I reckon will soon be in for a cracking run?

Capitalised at just under £13m, the SysGroup (LON:SYS) is an award-winning managed IT services, cyber security, expert IT consultancy and cloud hosting provider in the UK.

The group has offices in Liverpool, London, Bristol, Edinburgh, Manchester and Newport.

It operates through two main segments, Managed IT Services (87% of group revenues) and Value-Added Resale (13% of sales).

It offers cloud-based public, private, and hybrid hosting services, as well as virtual private cloud, PCI-DSS hosting, cloud desktop, and SysCloud services.

Other services include managed IT services comprising managed cloud, managed infrastructure, managed IT support, managed IT security, managed office 365, managed AWS, and managed azure.

It provides disaster recovery and back up services, as well as IT security services, such as penetration testing, endpoint security, DDOS, email security, security awareness training, firewalls, multi factor authentication, and GDPR automation services.

The company also provides connectivity solutions, and IT consultancy services; and sells IT hardware, licenses, and warranties from supplier partners.

It serves charity, education, financial, government, healthcare, legal, leisure, manufacturing, retail, and tech industries.
The Group’s Selling Tag

It really could not be clearer – the group describes its mission to its customers as

“We focus on your business, providing solutions built from the best-in-class technologies offered by experts to help you grow in a dynamic, technological world.”

The Group’s Clients

Despite its tiny size the group already has an impressive client list, including some top names, such as – AEG, FiloFax, MoneyWeek, the VSO, AXA, Catapult, The Duke of Edinburgh’s Award, Admiral, Mulberry, PWC, Science Museum Group, Hill & Smith, The Welsh Rugby Union, Garden Site, the University of Northampton, CMO Stores, the Royal Albert Hall, Holiday Inn, Servomex, Confused.com, the IOD, the Bradfords Group, hmv.com, ScrewFix, Adelante, itgroup, Sega, homebargains, RCPCH, SilverDoor, Hill Dickinson, sequel, and Beesley & Fildes amongst so many others."

The Group’s Partners

The company operates with and through various partners, including with Dell, WatchGuard, Microsoft, Veeam, HP, Nimble Storage, Cisco, Kemp Technologies, Meraki, Fortinet, Mitel, NetApp, RIPE NCC, Mimecast, VMware and Zerto.

Accretive acquisitions ahead

Chaired by the magic Michael Edelson, the company was formed in 2007 and was formerly known as Daily Internet. It floated on the AIM market in 2013 and changed its name to SysGroup in July 2016."

Judging from today's trades, with a hefty (in these markets) 388k shares traded already, it just looks like there was an early forced/desperate seller who had to get rid. Plenty of funds out there I'd guess having to sell due to redemptions or need for liquidity.

The gold price is still high and looks like remaining so for some time to come. CAPD's core business is thriving. I saw a post from kaizenkid elsewhere noting that the portfolio is still worth $43m - the weak pound is working in CAPD's favour in translation terms, so that's still a very nice £35m or so, i.e around 25% of the m/cap on its own.

It's worth reiterating that the core business is forecast to make $80.5m EBITDA and $53.5m EBIT this year (i.e before investment gains/losses), i.e around £44m - and $37.5m PAT against a now £146m m/cap.

Cheers - found it (had to edit it a little to fit in the word limit):

"Shearwater – resilience

Shearwater is a UK-based corporate resilience business offering cyber security software (own IP) and services operating across 46 countries with many large businesses (including tier 1 banks) as clients. Revenues total around £35mn, with historic (adjusted) earnings before interest, tax, depreciation and amortisation (Ebitda) of a little over £4mn forecast to grow at a compound annual growth rate (CAGR) of 20 per cent to March 2025, reflecting strong markets, cross-selling opportunities and a planned phase of new investment.

The software side has a typical structure, with high margins (>75 per cent gross ), selling through a two-tier distribution model, meaning low sales and distribution costs in-house. It owns the intellectual property (IP) for its two software brands SecurEnvoy (zero trust identity and access management) and GeoLang (tools that discover, classify and protect sensitive data and information across a range of storage locations and mechanisms). There is high recurring revenue here (>80 per cent) and >60 per cent of customers have contracts of three years or more.

...Its focus is the remaining quarter of the $40bn (£32.6bn)-plus security-as-a-service market not already covered (privileged access, cloud access and identity governance), a sector overall forecast to grow at a c16 per cent CAGR. Shearwater has £10mn in cash and untapped debt facilities to facilitate this, and buying well (management is happy to buy early-stage businesses) could bump baseline profits by as much as 50 per cent.

The services arm is larger by revenue (four to five times larger than software), but with lower margins (still a healthy 30 per cent gross) makes a similar level of Ebitda, giving the business a healthy balance. In services, a lot of revenue comes from selling third-party products and IP (hardware and software) in solution sets for core cyber security functions and monitoring plus consulting fees and the group’s in-house penetration testing – trusted hacking to show network vulnerabilities.

Good underlying market-driven growth augmented by anticipated investment mean that the 20 per cent growth being forecast here is tangible. Yet, the rating does not square with the prospects (specific and industry) – Shearwater’s enterprise value (EV)/sales ratio is just 0.65, the EV/Ebitda is less than 5 times and the price/earnings (PE) ratio is just 8.8 times year one. This is closer to the valuation you might expect for a mature cyclical rather than a high-growth industry. Darktrace’s equivalent figures are 4.8, 37 and >300, respectively.

Valuing Shearwater on sensible but still cautious ratios (1.8x sales, 12x Ebitda or a PE of 18) indicates a fair value as high as 250p (currently 118p)....."

That's a pretty small discount achieved in these markets and bears out the "strong demand" aspect of the RNS.

Never great to see such share placings, but given the rosy fundamentals and prospects I'm inclined to believe that there's genuine strong demand for shares out there, and it's not often that opportunities come up for management and employees to reap the rewards of strong performance.

Here's just five different examples from recent weeks of the continuing and rapid expansion of the UK's film and TV production capacity:

Massive new film and television production hub now being built around Reading supported by a £261.5m loan from Cain International:

Https://www.creherald.com/cain-provides-261-5m-development-loan-for-shinfield-studios-near-reading/

The UK Global Screen Fund are providing £21.5m more funding to support the UK's "booming screen industries":

Https://www.gov.uk/government/news/new-funding-to-help-spur-more-global-success-for-uks-independent-film-tv-and-video-games

Dragon Studios in Cardiff expanding with £9m of further funding:

Https://bdaily.co.uk/articles/2022/05/23/welsh-tv-and-film-studio-to-expand-facilities-via-9m-funding-from-london-lender

Plans in place for a huge "state-of-the-art" film studio in Marlow to create up to 4,180 jobs:

Https://www.buckinghamshirelive.com/news/buckinghamshire-news/plans-state-art-film-studio-7135656

A new £13m film and TV studio approved for Derby:

Https://www.bbc.co.uk/news/uk-england-derbyshire-61819400

Results - i.e revenues and EBITDA - are actually nicely ahead of both WH Ireland's and Arden's expectations.

The combined €4.8m EBITDA was well ahead of WHI's €4.5m forecast.

The core palm oil operation made €5.2m EBITDA before the €0.4m of cashew start-up costs written off, and €1.3m PBT.

I suspect that this year, even with the much reduced CPO production to date, will see further growth in profits due to the super-high CPO and PKO prices.

With prospective €35m-€40m of cashew revenues from full production now within reach it's easy to see the potential here.