Member Info for rivaldo

Mark Watson-Mitchell is VERY keen on CAPD - he's again updated as of Friday night, ahead of this Friday's AGM with a 100p target:

Https://masterinvestor.co.uk/equities/small-cap-round-up-featuring-robinson-chemring-helical-and-more/?mc_cid=1fd6f6c1c3&mc_eid=db9f9bbaf2

"Capital Drilling (LON:CAPD) – looking forward to next week’s AGM statement

After The Mail On Sunday journalist Joanne Hart wrote about the shares last Sunday, the market reaction was a mark-up to 70p.

That 11p gain was impressive and during the week it has succumbed to some profit-taking, cooling back to 63p before closing the week at around that level.

Next Friday 12 June will see this growing mining services group hold its 10am AGM out in Mauritius, where the group has its operational headquarters.

I would just love to be out there right now and then able to attend the meeting but cannot do so because of the lockdown (shame really).

Even so I am hoping that the shares will respond to a favourable AGM report – I am looking for some positive news please.

I believe that the price of gold is well below its potential value and that the record of $1917.90 an ounce achieved in late August 2011 will still be in investors sights.

A higher gold price creates more drilling demand for Capital Drilling.

My first profile target will soon be beaten, while the second may take a little longer but is still very possible within 2020.

Profile 23.07.19 @ 48p set an end-2020 Target Price of 76p.

Profile 22.10.19 @ 61p set and end-2020 Target Price of 100p."

...and another 40,000 just bought at 53.9375p, almost 1p above the 53p offer price.

Good to see a 40,000 buy just now at 53.375p, nicely above the full 53p published offer price.

Https://www.vhe.co.uk/blog/2020-06-04-progress-update-former-electrolux-site-spennymoor

"Progress Update - Former Electrolux Site, Spennymoor
04 June 2020

VHE’s collaboration with Renew Group sister company Seymour Civil Engineering continues at the former Electrolux site at Spennymoor for client Homes England.

VHE are remediating the site and producing aggregates for Seymour to utilise in the infrastructure works with the site ultimately being developed for residential use."

Https://www.vhe.co.uk/blog/2020-06-03-hunstanton-to-heacham-sea-defence-works

"Hunstanton to Heacham sea defence works
03 June 2020

VHE are undertaking coastal erosion protection at Hunstanton with our sister company Amco-Giffen on behalf of the Environment Agency. We have been undertaking the work annually for the last seven years, during which we move sand that has been cliffing on the beach up to 5¼ miles between Snettisham Scalp and Hunstanton, Norfolk, to provide pre-protection to the sea defences."

VLE has been bought by the Naked Trader (Robbie Burns) per his update late yesterday!

That should bring VLE on to a few new radars:

"Volvere (VLE) is a small one - the smallest I could ever go to because of liquidity. Bought some a while ago for the high risk sipp (those that get the email know about that one) but have added a few to the isa as well.

It's a turnaround and investment company so it should be doing well. It has swung into a profit and has cash - potential under the radar decent future!"

Good to see REAT reaching out to investors with a presentation available via Investor Meet to all on June 10th. One would think there's a pretty bullish story to be told in the current climate.

I'd assume that the morning of the presentation date or not long before will see the interims released:

https://uk.advfn.com/stock-market/london/react-REAT/share-news/React-Group-PLC-InvestorPresentation-via-Investor/82606116

Peel Hunt have retained their forecast of 1.9p EPS this year, as well as the 25p target price.

That's a P/E of only 9.2 at the current 17.5p. And helps explain the substantial director buying.

I was on a Zoom call with TST yesterday, along with just a few other investors plus the Chairman and CEO.

It went very well and was as positive as one could expect in the current circumstances.

In particular (from memory, so any corrections welcomed!):

- May was again profitable as well as January-April per the latest figures
- £5.6m of revenues have already been banked for this year, being (1) £200k per month of recurring revenues, i.e £2.4m, (2) £2.3m of revenues already booked to 30/4, and (3) £900k in the pipeline
- TST get 30%-40% of cash upfront, which is one of the reasons why their cash flow is so healthy
- they're also due to receive a substantial R&D tax refund in the next few weeks
- the business was really motoring prior to the pandemic, with order books up hugely as we know but interrupted by COVID-19. With a dominant position in certain sectors, whilst business will be slower for a little while they're optimistic that prior levels of demand will return
- 70% of revenues derive from "essential services" as defined by the Government

....and there's your move up LordofBurnley :o))

Chart-wise it's looking like it could break upwards back to 20p now.

Zeus's new note today is well worth reading - it's very thorough at 15 pages long, and concludes as follows:

"Conclusion and valuation

We believe CentralNic’s improved market position and its market consolidation potential are not fully factored into its valuation multiples. Nor are its attractive investment characteristics below:

? High recurring revenues: 92% of total revenue
? High customer stickiness: Less than 1% of customers change supplier each year due to high switching costs and complexity. Sticky customers should make acquisitions in the sector more compelling and lower risk.
? High cash conversion: Near 100% (pre-tax) due to annual subscriptions being paid in advance
? Operating leverage: EBITDA margin should increase with scale but this is not factored into our forecasts.
? Low customer concentration: The largest customer represents less than 5% of revenues.

We believe CentralNic’s valuation multiple should approach those of its larger peers as the company consolidates the market, demonstrates strong execution and delivers further acquisition synergies."

Great to see the share price tick up again yesterday after two huge trades of nearly 8 million shares.

Positive new interview with the CEO:

Https://www.proactiveinvestors.co.uk/companies/news/920933/inspired-energy-plc-has-remained-profitable-and-cash-generative-during-lockdown-920933.html

A "significant rise in demand".....

https://www.verdict.co.uk/coronavirus-cleaning-react/

Extract:

"As a specialist cleaning, hygiene and decontamination business, REACT experienced almost overwhelming demand for deep cleaning and decontamination services in early March as organisations sought to mitigate the risks of infection for people working in or visiting their premises,” Shaun Doak, CEO of REACT, tells Verdict.

While REACT has seen a surge in business during the coronavirus outbreak, it has also seen a change in the types of companies that are using its service.

“We have always had a broad customer base due to the universal need for specialist cleaning, however we have seen a significant rise in demand across all active sectors following the outbreak,” says Doak."

Mytton's comment about VLE management's fabulous track record and the potential for more acquisitions being worth an additional premium is a good one.

Obviously Shire's tangible assets and liabilities are already included in VLE's NAV, i.e the net of the freehold property, the borrowings against it, the stock, debtors/creditors, leasing liabilities etc etc.

An acquiror will pay an amount for the business as a whole, which would comprise its valuation of the ongoing core profitable business plus an amount covering the surplus property, debtors etc which it will take over.

It's impossible to separate the two as beauty is in the eye of the beholder! My thinking is that a buyer must pay up a multiple for the future/ongoing profitability of the business, as well as something realistic for the excess tangible assets.

So the ongoing business is not included in my valuation, only the tangible assets already in the NAV.

Another thought - there may be hidden upside in the freehold property, which hasn't been revalued since December 2017.

The sizeable director buying and the 250,000 buy at 16.9p just reported mean online is looking encouraging.

You can now sell at least 160,000 at a decent premium at 16.38p, whilst you can only buy a maximum 60k at almost the full offer price.

The excess unsatisfied demand from the oversubscription and the "demand from both new and existing institutional and other investors" appears to be soaking up any selling/profit-taking very nicely.

Personally I'm happy to hold here for some time to come, as it's rare to find a microcap share with such obvious momentum and immediately transformational factors driving it. And those factors should continue for some time to come.

Good luck to anyone taking a little profit, but this appears to me to be a situation without much downside - especially given the new baseline support at 1.5p - but with very decent upside.

Looks like substantial new work for Seymour Civil, with lots more to come, as part of this "multi-million pound" steelworks redevelopment in their local area:

Https://www.insidermedia.com/news/north-east/application-lodged-to-support-ssi-steelworks-redevelopment

"Application lodged to support SSI Steelworks redevelopment
2 Jun 2020

Plans have been lodged to support the redevelopment of a key piece of land at the former SSI Steelworks site.

Tees Valley mayor Ben Houchen submitted a planning application to Redcar and Cleveland Council yesterday (1 June 2020) for a new roundabout and road access at the Grangetown Prairie site – a 150-acre area that is one of the first sections of land to be developed.

The development of the new road is also set to include improvements to the existing Eston Road.

Hartlepool-based Seymour Civil Engineering was appointed in May to start site clearance and preparation work at the Prairie site, as part of a multimillion-pound contract, and the company has also been contracted to carry out this latest work.

The clearance work began less than a week after the successful outcome of the compulsory purchase inquiry into the former SSI steelworks. The inquiry granted the South Tees Development Corporation powers to purchase the former SSI steelworks, along with a further 112 acres of land, following a three-year-battle.

etc"

Excellent news all round...

- placing achieved at a good price
- demand for shares as "materially oversubscribed" should mean a good aftermarket
- "growing contract pipeline"
- appointment of Allenby as sole broker will promote the company more effectively
- trading is " ahead of management expectations"
- likely news flow to come re acquisitions
- but for the late moves up yesterday afternoon the placing would have been at a premium to the share price...

REAT are now in an improved position to both bid for larger contracts and take advantage of distressed business acquisitions.

The nice additional tick up at the close after a late 162k buy hopefully bodes well for tomorrow.

I thought it was worth rechecking the current NAV after the latest results, so here's my attempt.....

The NAV is 1385p per share, incorporating almost nothing for the value of Shire's business (and Indulgence) other than the tangible assets.

Shire made £1.4m pre-tax profit last year. I'd hope for say £1.7m this year given the good start, or say £1.4m PAT.

Shire could imo now achieve an improved exit multiple of say 8 given (1) the vegan growth/desirability (2) the heavy investment into the business and (3) immediate access into all the fastest growing supermarket chains for the acquiror.

So that would make Shire worth £11.2m. Times that by 80% equals £9m, less Lander bonus is say £8.1m.

On the current shares in issue that's around 450p per share - plus any further value re Indulgence - which gives us a total NAV of say 1850p per share.

NAV of 1850p per share still gives quite some upside from here.

Happy to be corrected on any errors/misapprehensions!

Large director share buying post-results this morning at between 16.9p-17.4p....by the entire Board.

That's just over 1,400,000 shares at a cost of around £240,000.

Most importantly the CEO has bought almost £100,000 of shares. And the CFO - who's normally the least wealthy and most cautious Board member - has bought almost £75,000 of shares at 16.9p.