Member Info for rivaldo

Glad I held on - now at 445p to sell, some 10p above the original takeover level, and could be a fair bit more to come before the deadline as Brexit worries drag the pound down.

CAPD were tipped as a Buy in the IC on Friday, after the solid trading update a couple of weeks ago. The optimism for the rest of 2019 bodes very well.

Looks like new highs coming soon. And CAPD's investment in CORA is already up by around £130,000.

For example, Santon, a solar power components business bought in February 2018, initially focused on renewable energy but is now seeing opportunities develop in other sectors, particularly transport.

Results have reflected the growing scope of the operations.

Revenues in the year to March rose by 14 per cent to £439million, with organic growth contributing 8 per cent of that.

Underlying profits were 28 per cent better at £37million, while there was an impressive £28.6million of cash generated.

The strong cash number has seen investors get their share, with the final dividend hiked by 6 per cent to 6.75p per share to give 9.55p in total for the year and a yield currently of 2.4 per cent.

Jefferies is confident about this year, which should see the benefit of the latest acquisitions: Hobart, a US-based designer and manufacturer of transformers, inductors and magnetic components, and Positek, which makes rugged, high accuracy linear, rotary, tilt and submersible sensors.

The potential here was highlighted by analysts at Berenberg, who in a June note said the business now had some of the 'most attractive' growth opportunities in the UK industrials sector.

The German investment bank believes that because of its relatively small size, DiscoverIE will find it easier to find family-run businesses where the owners are willing to sell at a reasonable price.

In particular, the D&M division's position in a large and highly fragmented customised market gives 'plenty of scope' to grow both organically and through acquisitions.

Berenberg estimates DiscoverIE has £30million of acquisition firepower, which if deployed sensibly could lift earnings by 10 per cent.

The broker expects this year's earnings (EBITDA) to rise by 13 per cent to £42million while sales should increase to £465million before any additional bolt-on or potentially larger deals.

Berenberg's target price for the shares is 520p, a 25 per cent premium to the current 412p and market cap of £326million.

Jefferies, too, believes now is a good time for the company to continue its acquisition trajectory as wider uncertainty in the market was 'definitely taking the lid off' price expectations, particularly in the US.

'We've got a lot on the go and a very clear plan of what we're going to buy, how we're going to buy it and how we're going to integrate it'."

Excellent trading update whilst I was on hols. Incidentally, DSCV were featured nicely in the Mail too:

Https://www.thisismoney.co.uk/money/markets/article-7249045/SMALL-CAP-SHARE-IDEAS-DiscoverIE-plugs-booming-markets.html

"SMALL CAP SHARE IDEAS:

DiscoverIE plugs into booming markets as demand for electronics surges across transportation, energy and medicine

Electronic components might not sound sexy, but they have proved a decent hunting ground for investors.

FTSE 100 member Halma has been an outstanding performer for decades, while Diploma is a FTSE 250 stalwart after doubling in value in four years.

DiscoverIE is another electronics group heading upwards and the Guildford-based group has big plans.

Chief executive Nick Jefferies says the company is a 'natural consolidator' in a fragmented market and is snapping up 'high quality, higher-margin' businesses.

Three purchases over the last twelve months highlight how the pace is quickening and with industry and society becoming ever more reliant on electronics, DiscoverIE is very handily positioned.

To ensure that it keeps up with the changing landscape, the company focuses its efforts on what it says are 'key markets' that have structural growth and, more importantly, an increasing need for electronic components.

Renewable energy, transportation, medicine and industrial connectivity are the current targets.

Just in the renewable energy market alone, forecasts are for the size of the market to grow to £1.2trillion by 2025 from around £744billion in 2017.

The firm uses its in-house engineering facilities to design, manufacture, and supply components to customer specifications.

Currently, there are production houses in several jurisdictions including China, Germany, India, the US in addition to the UK.

What customers want can range from incredibly precise instruments like tilt angle sensors, which are used to monitor the rolls of aircraft and boats, to less technologically demanding systems like touchpads, computer mouse trackballs and keyboards.

These electrical parts are the bread and butter of the business.

Currently, DiscoverIE's design & manufacturing (D&M) division, which focuses on making custom electronic products or modifying existing ones to client specifications, has around 5,000 customers on its books.

Meanwhile, its supply arm, which delivers electronic and medical products from third party suppliers, serves over 20,000 industrial manufacturers.

The group's clients have included the Norwegian Public Roads Administration, which wanted components to improve emergency services communication and video surveillance in road tunnels.

A logistics group, meanwhile, wanted a custom -designed vehicle tracking and fleet management solution

Jefferies adds that increasingly the company is developing products that can be used across all its arms."

Excellent news - the Sellafield agreement for a major major framework decommissioning contract has been extended to 2026.

As outlined below, this involves continuing work for RNWH's Shepley Engineers in two of the three available lots, with "work through the framework which has been much broader than the vast decommissioning remit":

Https://www.timesandstar.co.uk/news/17773365.major-contract-decommission-hazardous-parts-sellafield-extended-2026/

An excellent development update, securing even greater visibility going forward and with positive progress on a number of developments in both BTR and student accommodation:

Https://uk.advfn.com/stock-market/london/watkin-jones-WJG/share-news/Watkin-Jones-plc-Development-Update/80413482

Nice confidence in the forward outlook too:

"Richard Simpson, Chief Executive Officer of Watkin Jones, said: "We continue to see positive momentum across all key areas of the business. Our six PBSA schemes for delivery in FY 2019 are on track for completion ahead of the 2019/20 academic year and we continue to see an encouraging pipeline of potential future sites across the UK. The final quarter of the financial year is typically a busy period for the Group in terms of forward sale activity and we expect that to be the case again this year in respect of both the PBSA and Build to Rent pipelines.

Our expertise in acquiring sites at attractive prices, securing planning consent and then forward selling the schemes to a wide range of investors not only validates our business model but also demonstrates that, even in a more complex market, our strategy remains extremely resilient. The sectors in which we operate are highly attractive to investors and we continue to make solid progress against our internal targets."

Yep, that's a very pleasant surprise - a nice in-line trading update, with no alarms/caveats. And the outlook for the full year also shows confidence, being in line with prior guidance.

Forecasts are for 9.85p EPS this year (with a 2.88p dividend). Baby steps, but perhaps this is now a recovery story.

WJG have put forward a new proposal for student flats in Exater:

Https://www.devonlive.com/news/devon-news/student-flats-already-planned-exeter-3077227

"Student flats already planned for Exeter ambulance station"

"The Watkin Jones Group is proposing a high-quality managed student accommodation development close to the city centre and Exeter University's St Luke's Campus. The student accommodation will comprise up to 170 bed spaces plus communal space and landscaping."

Good to see SCE mentioned in a feature on the new Aston Martin Valkyrie, which has just been debuted on track at the British Grand Prix (that was the most incredible afternoon of sport yesterday!):

Https://www.autoexpress.co.uk/aston-martin/valkyrie/94896/new-aston-martin-valkyrie-2019-british-grand-prix-dynamic-debut

I assume only Sharesoc members (like myself) can access the link below, but I may be wrong?
https://storage.ning.com/topology/rest/1.0/file/get/3275568644?profile=original

The lack of research coverage is holding back wider attention. Either or both of a start of coverage by the likes of Edison and meetings with PIs via Mello or Sharesoc for example would be a good start.

The m/cap remains just £4.7m, with over 50% owned by the Board. It shouldn't take much attention to lift the m/cap by the 50% which would result in the more realistic £7m valuation as suggested in the AGM report.

Definitely worth a listen - DB now sounds extremely confident:
- re OEM5, testing and engineering is "as good as finished"
- re OEM3, test results are "most encouraging", still some work to do
- the new facility is "going well", giving huge additional capacity and with cost reduction targets being hit
- Knowsley has total capacity for over £50m of sales, with current capacity being sufficient for £17m and sufficient extra space to build up to £50m. It takes 18 months to build a new production line
- confident that cash flow break-even is realistic as predicted, especially with the receipt of the additional £300k as per the RNS
Https://www.***************************/interview-surface-transforms-superior-product-competively-priced-and-robust-supply-chain/412787316

Nice review on Techmarketview:

Http://www.techmarketview.com/ukhotviews/archive/2019/07/09/imimobile-delivers-vauxhall-win

"Tuesday 09 July 2019
IMImobile delivers Vauxhall win

More good news from cloud communications software provider IMImobile with vehicle manufacturer Vauxhall choosing the firm to launch Apple Business Chat. Vauxhall will use the solution to provide customer support and book test drives for new models.

We have seen lots of positive stuff coming out of IMImobile over the last year or as the company extended its portfolio and geographic reach (see here), translating into strong growth evidenced in last week’s full year results.

One of the main drivers has been strong demand for customer experience (CX) propositions that help organisations consolidate customer communications and deploy a consistent comms strategy across channels and platforms. And it’s here that car manufacturers are increasingly competing around the quality of their CX as they look to differentiate their offer and make their brands ‘stickier’. The Vauxhall win is a good example of this and will allow customers who are Apple device users to communicate directly with the business via the Apple Messages app no longer needing to call a contact centre - all very Millennial friendly.

With products like this that address and automate comms and CX, IMImobile is operating in a growth area with an offer that customers want to buy."

"Renew’s Water and Environmental divisions are doing really well. Like nuclear, the water side is underpinned by regulatory guidance for expenditure and significant investment is needed to upgrade existing ageing infrastructure, and the industry’s £22.1 billion AMP7 scheme - the asset management plan period put forward by the regulator Ofwat, which runs between 2020 and 2025 - is already seeing the water companies dishing out new contracts. The key customer is Welsh Water, for which it works under frameworks for sewer maintenance, trunk mains cleansing as well as water distribution.

The last element in the mix is Environmental, which is involved in piling works, flood defences and so on; a sector with £1bn a year committed for the next 50 years.

The rating doesn’t look demanding especially as net debt is down to £17.2m and by next year Renew is expected to move back to net cash. On a prospective PE of just 10.8x, with excellent prospects of further growth, the shares look attractive."

"Last year the company completed the £80m acquisition of QTS and this alongside an earlier acquisition of Amco means rail is now Renew’s biggest chunk at c.50% of sales with Scott noting that Renew is now a top six company in renewals and maintenance. Working across five regions and all 13 routes, QTS carries out civil works, geotechnical and earthworks services and fencing whereas Amco is generally offtrack civil (tunnel repair), mechanical and electrical work.

As Scott notes, the main customer is Network Rail, the owner and operator of most of the rail infrastructure, and it plans its work across control periods of 5-year timespans. The current period ended in March and things had been expected to cool down ahead of Control Period 6 starting but when it got to December, the phone didn’t stop ringing. And last year there hadn’t been a freak event like when a bridge collapsed into the sea at Dawlish (near Exeter) taking a significant stretch of the railway with it; instead it was bread and butter type jobs. Now CP6 has resulted in a 17% increase in spending to £46bn over the previous programme, within which renewals and maintenance is earmarked to see the greatest growth.
Still within the infrastructure division, telecoms has also seen its strongest period yet, says Scott, with 4G and 5G continuing to present an opportunity under long term programmes. This division is all about the design, building and decommissioning of masts for the likes of Telefonica and other mobile network operators.

In the Energy division, the original nuclear bit is going really well and Scott makes no secret of wanting to grow the company’s nuclear capability. Shepley, which has operated at the Sellafield nuclear site in Cumbria for almost 70 years, is involved in decommissioning nuclear assets. The Nuclear Decommissioning Authority has confirmed £3bn annual expenditure; most of the reactors in the UK have now lasted out their lifetime and are being dismantled and decommissioned but this dismantling process can take a number of years with a site often having to be run in safe storage mode for 40-50 years while the building remains sealed and monitored by decommissioning experts. Shepley is all about building the long term storage solutions to manage the decommissioning process before things can be dismantled. Scott says the division is also cleaning up and dismantling Dounreay as well as some old power stations."

With the July issue of SCSW now out, I thought it might be time to give the conclusion of the tip for RNWH in the June issue an airing:
Https://www.scsw.co.uk/article.php?id=8080

""Renew - Shares break into new territory
430p Epic code: RNWH

Renew (RNWH; 430p) is an old friend to SCSW, a company I have followed since 2006. Back then the share price was 49p. Even as recently as December 2011, the shares could have been bought at 64.5p - the business was still being valued as a construction company rather than the higher rated support services business that it is.

Of course part of the problem when a business has gone through the wars and traumatised investors is that investors are slow to forgive and forget. Back in 2006, it had just gone through a period of crisis. Known as YJ Lovell, it had been established over 200 years earlier and ended up as a hodge podge owning a variety of construction and land development businesses. Several outstanding construction difficulties relating to fixed price contracts emerged and derailed it and the best part of the group, a social housebuilder, was sold. After a tidying up period by the previous chief executive, Brian May, who grew the engineering services side through acquisitions for the next 10 years, the reins were handed to Paul Scott who had earlier sold his nuclear decommissioning business, Shepley, to the group.
Renew has since gone from strength to strength and whilst the share price hit a new high last month, they look underrated. Numis is forecasting eps of 39.9p for the full year to end September with 42p next year and I suspect before long the earnings per share will exceed the 49p share price at which I first recommended them.

There is still a legacy building business involved in things like complex basement and overcrofts at top end residential properties in Mayfair and Kensington but this division has been downsized and in the latest first half recorded a profit of just £0.3m on sales of £19m. One day there will be an ultimate bit of refocussing whereby the division will likely disappear. Engineering services, meanwhile, has grown like topsy with sales overall up by 25% to £282m and operating profit up by 48% to £19.1m in the period. Margins within specialist engineering hit an all time record 6.8%, up 1.1% year-on-year.

Growth, both of sales and profits, comes from engineering services across areas that benefit from long-term spending programmes, very roughly split 60% Infrastructure (rail & telecoms), 20% Energy (nuclear) and 20% Environmental (water & land remediation). Most divisions work with long-term framework contracts, which offer greater security and therefore significantly lower risk, although the overall mix can change slightly from year to year depending on growth of the individual parts."

Encouraging RNS today re the cashew nuts facility, with everything progressing smoothly and first production expected in less than a year now. VSA Capital retain their Buy and 12p target today, and conclude:

"VSA Comment

DKL’s FY 2018 demonstrated the risk of being exposed to one agricultural commodity. Therefore, we believe that diversification into the cashew sector is a shrewd one that should help the company deal with any subsequent difficult years in its palm oil business.

With construction now underway, we look forward to first production next June. Although this represents the end of the cashew season in Côte d'Ivoire, DKL will be stockpiling cashews from smallholders in the months prior to opening for subsequent processing by the facility.

Assuming DKL exercises its option to gain a c.55% stake in the project, we estimate that the project could deliver an attributable profit of €2.2m by 2022 to the group.

We maintain our BUY recommendation and target price of 12p."

Apparently IOM is on Techinvest's 2nd Half Best Buys list as of last Saturday.

Plus the Naked Trader has been topping up again here late last week:

"Iomart (IOM) a long term hold fell, again for little reason and I topped up there"

News yesterday that Merlin are to open a new Legoland water park at Gardaland in Italy. Undoubtedly ACSO's water park and admissions tech will be rolled out here too. Which will bring in further continuing revenues and profits for the entire lifetime of the park:

Https://www.themeparkinsider.com/flume/201907/6880/

"Italy's Gardaland to open Europe's first Legoland Water Park

July 8, 2019, 12:41 PM · Less than a month after taking over the parent company of the Legoland theme parks, the owners of the Lego Group are moving swiftly to expand Lego branding at other theme parks in the Merlin Entertainments chain.

Gardaland Resort, the Merlin property in northeastern Italy, announced today that it will add a Legoland Water Park to its resort, which also includes a Sea Life aquarium as well as Gardaland Park and a hotel. This would be the first Legoland Water Park not built adjacent to a Legoland theme park and the fifth Legoland Water Park overall in the world, following those at the Legolands in California, Florida, Dubai, and Malaysia.

"The LEGO brand is renowned globally and will undoubtedly contribute to strengthening Gardaland Resort's position as a major European tourist destination, as well as confirming it as a top player for family entertainment," Gardaland CEO Aldo Maria Vigevani said in a press release. The most recent TEA/AECOM Theme Index attendance report ranked Gardaland as the eighth-most-visited theme park in Europe, with 2.9 million visitors in 2018.

etc"

Good news today, with Vauxhall Motors using IMO's platform to launch Apple Business Chat for its customers:

Https://www.investegate.co.uk/imimobile-plc--imo-/rns/vauxhall-launch-apple-business-chat-with-imimobile/201907090700108592E/

"Vauxhall launches Apple Business Chat with IMImobile

Car manufacturer to use Apple Business Chat to provide customer support and book test drives for new car models

IMImobile (AIM: IMO), the global cloud communications software and solutions provider, today announces that one of the UK's largest car manufacturers, Vauxhall Motors, is using Apple Business Chat via its enterprise communications platform to connect with their customers. Apple Business Chat provides a new way for users to communicate directly with businesses using the Messages app on iPhone, iPad, Mac and Apple Watch.

etc"

Nice rise this morning on 12k of buys. Looking encouraging online too. You can only buy a maximum 10k shares at 35.77p, whilst you can sell 25k at a premium at 34p.