Member Info for rivaldo

On a down day for the markets yesterday, just a few sales in this very tightly held, illiquid stock caused the MMs to take advantage of those sellers and drop the price crazily.

I suspect this is now very cheap indeed given Finncap's 25.9p EPS forecast for the current year.

Amati AIM VCT released their Annual Report this moprning. In their commentary they note their investment in ETP's IPO and summarise:

"The remaining two IPOs were in buildings related products - and services which are coming to the fore for environmental reasons; we invested £0.75m in Zenova in July and £1.95m in Eneraqua in November.....

....Eneraqua designs and installs energy and water systems for large buildings in both the public and private sectors, involving ground and air source heat pumps. It has a patented device which overcomes variable mains pressure to provide constant water flow. This reduces water consumption which in turn reduces heating requirements and system costs. It is working with three utility companies and 28 local authorities and housing associations, on both new and replacement systems."

More new highs, and buying coming in at the full 165p offer price.

Good to see MWE extending the share buyback programme to March'23, with the capacity now increased to £200,000 maximum:

Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Update-regarding-Share-R/87820102

Encouraging new tweet overnight from CAPD (click link for the drilling activity chart):

Https://twitter.com/_CapitalLimited/status/1513714843445985282

"Capital Limited
@_CapitalLimited

Strong activity continues in the drilling sector, positive indicator for our drilling business, S&P Global’s Mar data shows drilling remained strong through the qtr, with a record # of projects reporting, up 2.5% MoM to 414. Distinct drillholes increased by 2.0% to 6,231 projects"

Fantastic stuff - the re-rate from here could be pretty significant.

Over £4m additional revenues per annum for likely the next 5 years - the market loves this kind of forward visibility:

Https://uk.advfn.com/stock-market/london/shearwater-SWG/share-news/Shearwater-Group-PLC-Contract-Win/87820121

It's worth noting REAT's stellar historic and forecast EPS growth:

y/e 30/9/20 - 0.04p EPS
y/e 30/9/21 - 0.15p EPS
y/e 30/9/22 - 0.17p EPS (forecast)
y/e 30/9/23 - 0.20p EPS (forecast)

REAT have very high recurring income and forward revenue visibility via multi-year contracts. The forecasts above are deemed "prudent" by Allenby, who have a 3p fair value price target.

REAT are also aiming to become the sector consolidator, and have made a great start with Fidelis which has been terrifically successful.

The PEG of 0.77 shows that REAT are very good value at these levels, let alone the single-digit forward P/E.

Any company which is a specialist in its sector, with high recurring income and forward revenue visibility, and which can deliver acquisitions consistently, will trade on a very decent rating.

Such a rating would be far higher than REAT's present forward P/E of 8.75.

Yet more excellent news today:

- the results to 31st March '22 will be ahead of previously upgraded expectations
- the order book is at record levels
- semoconductor supply constraints are being managed successfully

Above all, there's a strikingly confident statement that CLX expect to "deliver significant, sustainable growth over the coming years".

Plus there's a very good-looking earnings-enhancing acquisition for a max £3.5m. The client base is remarkable for a small cap:

"Juniper Networks, JPMorgan Chase, Ubisoft Games and the Government and Military in the UK and US"

CLX can use its power to scale up this business quickly and globally:

Https://uk.advfn.com/stock-market/london/calnex-solutions-CLX/share-news/Calnex-Solutions-PLC-Acquisition-of-iTrinegy-and-U/87809353

Shore Capital say Buy today - they predict $36.9m PBT this year, along with a whopping $121m cash pile by the end of the year. At which point the cash pile would represent almost 30% of the m/cap!

Https://www.proactiveinvestors.co.uk/companies/news/979398/accesso-to-generate-mass-of-cash-predicts-broker-979398.html

"Accesso to generate mass of cash predicts broker

Trading this year is said to have started well, with traction within North America

Accesso’s full-year results were encouraging says Shore Capital, which has stuck a buy rating on the virtual ticketing and queuing group.

Last year, 2021, was an exceptionally good year, it says, boosted by a greater mix towards higher-margin revenue segments, such as queuing, ticking and eCommerce positively impacted gross margins.

Transactional revenues continued to increase in line with easing restrictions, and an abnormal shift in revenue mix, along with prolonged cost savings, positively impacted group margins.

Trading this year is said to have started well, with traction within North America and an increasing consumer appetite for leading-edge eCommerce solutions.

As trading normalises, the cost base is expected to rise, given the operating model and industry wage pressures, however, ACSO has stated that it expects another cash generative year building on the year-end cash balance of above US$60mln.

In a new forecast for 2024, Shore Capital has pencilled in sales of US$165mln and underlying profits of US$36.9mln, with net cash rising to US$121mln by the year-end or more than double the end of 2021."

42,187 shares just reported bought at 16p - a full 1p above the 15p offer price. Very keen.

Cheers - this new partner has some pretty impressive customers:

"Manchester, UK: 4th April 2022

Minster WMS & TouchStar Technologies announce strategic cooperation

Minster WMS, based in Tamworth, England is a software provider to the UK Supply Chain sector. The company was established in 1978 and offer a complete system for any business involved with the distribution of products. Currently the software is used by wholesale distributors, contract warehousing organisations and local authorities to distribute products as diverse as food, sports equipment, cosmetics, stationery, cleaning materials, medical equipment, and furniture.

The company has particular expertise in the supply of contract food service distribution systems, with experience working with high calibre customers such as Marks & Spencer, Best Food Logistics, Wincanton and Pret-A-Manger. Non-food customers include Semichem, Claire’s (North America), Hertfordshire County Council and Bradshaw Group (Singapore and Australia)."

This major studio expansion plan just announced... at Leavesden by Warner Brothers, with "the construction of 11 sound stages, four production buildings, and three workshops":

Https://www.watfordobserver.co.uk/news/20005484.warner-bros-submits-major-expansion-plans-leavesden-studios/

Extracts:

"Warner Bros has submitted official plans to expand its studios in Leavesden to cope with an "increasing global demand for high quality film and television content".

"The company also wants to make a backlot used for outdoor filming permanent and says the proposal has been driven by the "need" for additional studio facilities."

"At a time when the UK film and TV industry is flourishing, demand for quality production space has never been greater."

Moving up nicely.

Further to the Momentum Investor tip I noted earlier, it's worth noting that SUR are also to be bought into the magazine's Trader Portfolio.

On the portfolio page they state:

"This time with markets still volatile I feature Sureserve, which provides inspections and services for gas boilers, fire alarms and lifts on behalf of social housing organizations and enjoy terrific recurring revenues from multi-year contracts. A smaller, but faster growing business supplying insulation services, exploiting the drives towards net zero and away from fuel poverty, provides added excitement.

The core business looks copper-bottomed and the CEO plans to double turnover by 2026 accompanied by higher margins. He told me acquisitions are expected. No surprise to see Slater Investments increasing its stake as the PE will shortly drop to single digits. I will add a unit shortly."

News of £20 billion of capital ready to invest in UK life sciences real estate has to be good news for SDI (assuming the availability of space is sorted out):

Https://www.thetimes.co.uk/article/cash-pile-of-20bn-ready-for-lab-space-lq95jct2z

Extracts:

"Between 2016 and 2020, 681 life sciences businesses were started, according to a report by We Are Pioneer Group, a builder and operator of labs, and JLL, the property agent, 24 per cent more than in the previous five-year period.

The number of start-ups is expected to have grown in the past year, driven by the desire of investors to pour money into the life sciences sector in the wake of the pandemic.

Investors backed life sciences businesses with about £2.8 billion in 2020, but this almost doubled to £4.5 billion last year, according to data from the BioIndustry Association.

London, Oxford and Cambridge, known as the Golden Triangle, remains the heart of the country’s life sciences sector.

Glenn Crocker, executive director of venture capital investments at WAPG, said: “The availability of suitable lab and office space is already at all-time lows, and record-breaking funding levels and the significant growth in the number of start-ups will only fuel demand for life sciences real estate and exacerbate the issue of under-supply.”

"JLL and WAPG estimate that there is £20 billion of capital waiting on the sidelines, looking to invest in UK life sciences real estate.

Investors are keen to cash in on the supply and demand imbalance, which has sent rents and capital values climbing sharply. By contrast, rents in other property markets, notably retail and office, have fallen quite sharply.

They are also attracted by the reliability of the income, with laboratories relatively unaffected by the work from home trend."

Yet another contract win for Fidelis - £700,000 over 3 years, and with a new education sector client too:

Https://uk.advfn.com/stock-market/london/react-REAT/share-news/React-Group-PLC-Contract-Win/87799061

With 0.17p EPS forecast for this year to 30th September, rising to 0.2p EPS next year, REAT remain very good value imho.

The March update confirms that Q1 revenues are ahead of last year, with much higher prices and surprisingly good extraction rates.

This despite the huge region-wide and unexplained decline in year on year CPO production up to mid-April - although 70% of production tends to happen in the last half of the month, so there's still hope for this month.

And DKL are arranging to sell at even higher prices to new customers.

Cashews are still at 15% of capacity, and it seems that progress continues to take place in ramping up production facilities over the next couple of months.

A "strong H1 2022 performance" is forecast, but I suspect that there may be a buying opportunity if the MMs automatically mark DKL down on the basis of the headline delayed production rather than taking into account the improving financials.

Continued.....

"Scaleable platform

From the early days the system has also operated through Amazon Web Services (AWS) and its elastic Cloud. This enables Fonix to auto-scale (automatically request additional servers) to meet required computing power times. These days the system can process 2,000 payment transactions per second allowing it to support traffic spikes and situational peaks. This core capability of Fonix’s platform has differentiated Fonix from competitors’ systems with less capable technology, and enabled Fonix to win new clients. In order to ensure Fonix can continue to process transactions for its clients in close to all scenarios, Fonix’s platform works to reduce all single points of failure, multi-site deployments, and multiple divergent routes to all telecom carriers where available. Given the highly sensitive nature of the data and payments that Fonix is processing, Fonix also conducts its own security testing on top of thorough testing of its network by clients, and it operates with 24/7 monitoring and bespoke safety measures."

"Overseas expansion

But in the short run, the big fish to fry is expansion into Europe; Austria, which is one third of the size of the UK market, will soon go live and act as a bridgehead into Germany and Weisz has three or four other countries in his sights. As he says, expansion is being carried out in a low risk way by targeting countries where existing customers already operate or where there is a well developed phonepaid framework. Instead of setting up direct tier one connectivity, he is also partnering with wholesale aggregators, which will make it quicker to enter the market.

Brokers are yet to factor into forecasts the expansion into new verticals and geographies but even despite that, the business is trading strongly. Last month, Finncap upgraded forecasts to £9.6m pretax profit / 7.9p eps for the year to end June lifting to £10.6m/8.8p next year. I am a buyer."

The new issue of SCSW is now out. In last month's issue FNX was a new main tip, so it should now be OK to copy some interesting parts of their (very long) coverage (not including the parts where they simply explain what FNX does etc):

Https://www.scsw.co.uk/article.php?id=9305

"Only 35 employees

This year the business is set to report a £9.1m pretax profit on sales of £51.4m - despite only having a headcount of 35. Astonishing. Chief executive Rob Weisz says it is all about leveraging a proprietary cloud based platform - as I describe below, most customers set up their campaigns and do most of the things themselves with little intervention from Fonix."

"Never lost a client

Apart from its low headcount, what also makes this a strong business is that Fonix has never lost a customer - so each new win tends to become a permanent addition to revenues. There are presently 120 clients, up from 99 a year ago across a range of sectors including media, charity, gaming, telecoms and dating and includes Bauer Media, the BBC, BT and ITV.

When it floated in October 2020, the company certainly had no reason for new money as all its growth had been organically funded; instead, the main reason was for the improved creditworthiness in the eyes of customers - by then it was handling £150m-£200m a year cash and needed to provide comfort to the likes of the BBC that it wouldn’t disappear into a puff of smoke. The second reason was that it provided a partial exit (£45m) on behalf of selling shareholders. Even now, the tidal wave of cashflow leaves net cash of £5m and there is plenty of largesse for shareholders as Weisz has a target 75% payout ratio of earnings and is on track for increasing the dividend from 5.2p to 6p for this year."

"High element of repeat income

The great thing is that the business now has a high element of repeat and recurring income. Instead of selling on an upfront licence basis, pricing is “pay-as-you-go” based on transactions."

Excellent - tipped in today's Mail on Sunday Midas column with an update (cheers JLite, appreciated - here's your "limelight" attracting event!):

Https://www.thisismoney.co.uk/money/investing/article-10702563/MIDAS-SHARE-TIPS-UPDATE-mining-tip-Capital-70.html

Quite a good summary given the space limitations, pointing out:

- the thriving core business
- the move into mining services
- the disruptive potential of the labs business
- the branching out into other metals

And that's without mentioning the investment portfolio which backs up $60m of the £198m m/cap.

If Midas are already 70% up on their original tip they normally update by saying holders should take part profits and hold the rest, but unusually here they say holders should continue holding and newbies should buy in too.

As well as the growth in MWE's two divisions covering 5G and water management, I'd have thought that MWE's other division covering tech solutions including defence would be in high demand at present, notwithstanding the withdrawal from Russia - MWE themselves said in the recent prelims that this is benefiting from "ncreased international defence spending".