Member Info for rivaldo

Excellent news on all fronts re cashews - looks like the tanker has been turned around at last.

October was a down month for CPO, but DKL "expect to report a material increase in our CPO sales prices for November" with CPO prices up to multi-year highs now.

With a following wind November's update could be terrific for both cashews and CPO.

Hybridan's analyst reviewed CSSG in his Friday night Small Cap summary as follows:

"8th November 2024

Croma Security Solutions 79p £10.7m (CSSG.L)

In June 2023, Croma sold Vigilant, its lower margin man guarding business for £6.5m to be paid in stages.

At the June year-end net cash was £2.14m and since then a further £2.2m has been received so net cash is around £4.3m with no borrowings.

This is being invested in growing the Croma Locksmiths and Croma Fire & Security division with a buy and build strategy to create the UK’s first nationwide network of branded Security Centres.

Croma designs, installs, and maintains a wide range of security systems, from Intruder Alarms, CCTV, and Access Control systems, to Biometrics, Door Entry, and Automatic Door systems, and offers 24/7 Remote Monitoring. The strategy is to acquire traditional locksmith stores at moderate valuations and transform them into modern Security Centres. These will have a wide in-store product range and a broader range of services with much greater profit potential. The target is to acquire 3-5 shops per year with a target ROI of at least 15% as they become Security Centres.

Finals to June 2024 reported an 8.9% increase in revenue to £8.74m, with EBITDA on continuing operations up 13% to £1.06m, giving an EBITDA/EV 6x. FY25 trading, is reported to have started well with good demand from its commercial and retail customers increasing security, perhaps scared by summer’s civil unrest. A £0.4m contract was won in April for the installation of a hospital’s security systems as part of a growing relationship with this NHS Trust where there is potential for further projects.

Comment: The valuation seems to ignore the likely profit potential for a branded national network of security centres with a wide range of products and services."

New audio summary yesterday from Zeus Capital of the results - 119p target with new acquisitions:

Https://zeuscapital.co.uk/exclusives/2480294729/

Thecurrent spread is 58p-60p, but there's just been a number of buys going through firstly at the full 60p offer price, and now at 62p - with a recent 10,000 share buy at 62.96p, i.e almost 3p above the published offer price.

Around 70,000 shares bought in total, with almost all of those in the last half an hour.

QTS expanding across the UK.

Https://www.globalrailwayreview.com/news/179430/qts-group-expands-operations-across-england/

""Headquartered in South Lanarkshire, Scotland, this move represents a significant phase of growth for the company, which aims to enhance its service delivery and support future demand across the UK."

RNWH were also featured nicely in SCSW last weekend as one of their "Updates & Ideas", noting that the acquisition of Full Circle and the disposal of Walter Lilly were "two hugely margin-accretive developments".

There's an interesting section re Full Circle, noting that it's not subject to regulatory spending cycles, as it operates via non-discretionary "planned and reactive maintenance agreements with asset owners, who require minimal downtime for turbines", supported by recurring full-scope contracts with 7-year average contract lengths and 95% renewals.

SCSW conclude that RNWH is "a multi-stage rocket that looks almost certain to go even higher".

I suspect Edison have their own method of calculating EPS which adjusts the reported figures, as it's difficult to reconcile H1's reported 14.55p underlying EPS with their forecasts, but it's impossible to determine this from their Flash Note this morning.

I've now seen Canaccord's new update too, and this has a forecast of 31.4p EPS this year, which would chime with the reported results and outlook.

They reiterate their 380p price target, and also see a 14p dividend.

Good H1 results today, with forecasts reiterated for the year, increasing order books as at 30th September and net cash up to £3.3m.

This despite a weaker dollar - although with a Trump victory this will likely reverse to BMS's benefit in this H2.

Edison reiterate 44.4p EPS this year, with a 14p dividend.

They summarise:

"Solid H1 driven by diversification, outlook robust

Braemar’s H125 results reflect a continuation of the successful diversification strategy that has been deployed for the last three years. Revenue was robust, up 1%, and operating profit increased 9%, highlighting operational leverage. Braemar’s underlying markets retain strong fundamentals that include increasing global demand and an aging global fleet; this bodes well for the future and is reflected in its robust forward order book. The company remains on track to achieve market expectations for this financial year."

"As a result of the group’s trading performance and the increased confidence of management, the interim dividend was raised 12.5% to 4.5p (H124: 4.0p). Braemar ended the period with net cash of £3.3m, up 5% on the previous year, highlighting the company’s cash-generative nature. The outlook for the group is encouraging, underpinned by the forward order book that stood at $80.9m at the end of August, (29 February 2024: $82.6m; 31 August 2023: $67.2m), which had risen to $85.8m at 30 September 2024."

The international CPO price has risen yet again and is now $1,285 as of yesterday, the highest since July '22:

Https://rea.co.uk/investors/CPO-price/

RNS just out - the CFO has bought another 10k shares at 80p and now has 25k.

For most directors this would be a pretty small amount. But for someone who's had 15 years at CSSG and worked her way up from Financial Controller I'm guessing she like most CFOs (and unlike other directors) doesn't necessarily have much personal wealth, so any share buying is much more meaningful:

Https://uk.advfn.com/stock-market/london/croma-security-solutions-CSSG/share-news/Croma-Security-Solutions-Group-PLC-Director-Dealing/94842746

WIA Gold have just announced they've raised A$30m at A$0.15, which is almost no discount to their current multi-year high share price, with "Strong support received from local and offshore institutional and sophisticated investors".

So this solidifies the value of CAPD's shareholding now worth over £14m. It'll be interesting to see whether they've increased their holding further.

And of course as drilling contractor CAPD should benefit further from the further drilling work to be undertaken:

Https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02877022-6A1236124

That's a much more promising and bullish update.

Canaccord's update reads well and reflects the renewed confidence here.

Good to see management doing an Investor Meet - 10.30 am on Tuesday 12th November:

Https://uk.advfn.com/stock-market/london/croma-security-solutions-CSSG/share-news/Croma-Security-Solutions-Group-PLC-Notice-of-Investor-Presentation/94839830

Shandypants2, if over a number of years you've been transferring £20k per annum into your ISA (or less since ISAs were first established), believe me it's easy, with a modicum of share growth, to have built up a substantial amount in your ISA which you can then utilise to buy/transfer in shares to protect from future CGT - as CSSG's CEO has just done.

Nice 10k buy at the full 80p offer just reported.

Zeus's update today forecasts 5p EPS and £0.92m PTP this year, plus a 2.4p dividend, with a closing £5.1m cash pile at 30th June (against a £10.6m m/cap at 77.5p).

That's assuming no earnings-enhancing acquisitions, which is unlikely, though even so, with £4m cash as of today and further Vigilant sale instalments due I suspect this figure may be conservative as Zeus say their other forecasts are.

I can see lots of potential growth ahead as CSSG mop up and improve a fragmented market, using their in-place platform and proprietory software to enable synergies and cross-selling.

Nice early move up to new recent highs this morning (OT - good results and outlook today from CSSG are also worth a look imo if you like profitable small caps on cheap ex-cash multiples!).

As well as Dowgate, Singer Capital also updated after the new acquisition. They've raised their target price to 135p (from 120p) and say Buy.

Here's extracts from their summary - they now forecast 9.3p EPS this year and 11.3p EPS next year:

"Significantly earnings enhancing acquisition

React has acquired 24hr Aquaflow Services for a consideration of £5.0m plus contingent consideration of £2.4m. This represents a multiple which is capped at 4.3x EV/EBITDA. 24hr Aquaflow Services is a drainage and plumbing company operating in a complementary sector with similar customers to React. It is profitable (£1.2m EBITDA last year), high margin (56% GM, 19% OM) and cash generative. The acquisition expands React’s service offering, as well as significantly enhancing its earnings. The consideration is funded by a mix of equity, debt and React’s own cash, including a £1.1m equity raise and a new £3.5m debt facility.

We increase our FY25/FY26 EPS forecast by 22%/31%. This leaves the Group trading on a Sep. ’25 P/E rating of 8.7x, falling to 7.2x, which we see as very undemanding. We raise our TP to 135p (12x Sep. ’26 P/E) and retain our Buy recommendation."

"Significant earnings enhancement The acquisition significantly enhances React’s earnings. We estimate an EBITDA contribution of £1.1m in FY25, driving a 36% upgrade, and a contribution of £1.4m in FY26 (first full year), driving a 42% upgrade.

This is intended to be a conservative approach and compares to EBITDA performance targets of £1.6m in year one and £1.725m in year two. Post the impact of the equity raise, we estimate that the acquisition would add 22% to our FY25 EPS forecast and 31% to our FY26 forecast.

Shares trade on 8.7x P/E post deal The earnings enhancement leaves React trading on a Sep. ’25 P/E rating of 8.7x post deal, falling to 7.2x. Its three year average FY1 P/E rating is 10x. UK FM peers trade on an average c.12x P/E, whilst larger, internationally listed peers trade on c.25x. We target a Sep. ’26 P/E rating of 12x to drive our 135p target price (upgraded from 97p). This underpins our Buy recommendation

A slight edit. The remaining Vigilant sale proceeds are to be received over the next 7 quarters, so the £6.9m cash pile I quoted would be at the end of those receipts in the year to 30th June 2026 - supplemented by further cash generation from profits during that time, and offset by further acquisitions of more locksmiths/security centres plus refurbs of existing operations.

Good results today, well ahead of last year, leading to a 2.3p dividend, and also noting that this year has started well too.

The cash pile has now increased to over £4m as of today's date, with a further £2.9m of Vigilant sale proceeds to be received this year.

That will give a £6.9m cash pile against the current £9.3m m/cap.

With CSSG making £1.1m EBITDA last year, almost 4p EPS and generating £0.72m cash from operations that looks pretty good value imo.

Particularly with this year's broker forecast for a jump to a "conservative" 5p EPS.

We can expect more acquisitions, and likely more partnerships/contracts to deliver additional security products via CSSG's retail operations

FYI here's Dowgate's summary from their 29th October update, where they raised their forecasts for this year by 16% to 9.4p EPS and next year by 30% to 11.6p EPS:

"Transformation now; firepower for tomorrow

React Group is acquiring 24hr Aquaflow (drainage & plumbing services) for an initial £5.0m consideration with the potential, subject to hitting certain EBITDA

levels (that are not factored into forecasts), for that to increase by an extra £2.4m.

The upfront consideration represents 4.1x EBITDA, for an attractively profitable

and high margin business. The purchase extends React Group’s range of services and brings opportunities for the management to market other Group services to a host of new clients.

Taking the acquisition, £1.1m equity raise, accompanying FY trading update and outlook into account, we increase our FY 2026E EPS by c30% (the first full year). Prior to this deal, we highlighted in our April 2024 initiation note, that the Group had the capacity to make an enhancing move of this magnitude. We take this opportunity to also highlight that as this Group de-gears into 2026E, it should once again be able to make a similarly enhancing move.

Based on the returns we expect from the current business, we raise our TP to 120p

(from 100p); but there is more organic and particularly acquisitive growth to come"

"We are raising our TP to 120p (from 100p) for React Group. This is as a result of the acquisition of 24hr Aquaflow and the inclusion of it into our EVA® and related MVA valuation method. This derives the theoretical share price of 120p per share, assuming the Group reaches an annual free cashflow per annum of c£3.5m by 2028E. Clearly, should the Group be able to attain its medium-term target of c£5m p.a. of free cashflow generation, then greater upside can be realised. With the valuation of this fast growing and cash generative group projected to reduce to just a little over 4x EBITDA and c7x PER by 2026E; we believe the shares are undervalued."

Another RNS - as well as Hambros' buying, Chelverton Asset Management have increased too. They now have 5.32%, or 6.95m shares. Per OMG's web site, at 30th June they only had 3.24%:

Https://uk.advfn.com/stock-market/london/oxford-metrics-OMG/share-news/Oxford-Metrics-PLC-Holdings-in-Company/94816805

New positive article on Master Investor - subscription-only unfortunately:

Https://masterinvestoruk.substack.com/p/small-cap-comment-time-finance?utm_campaign=email-post&r=odp3u&utm_source=substack&utm_medium=email

"Small Cap Comment – Time Finance

Having followed Time Finance for the last 18 years, Mark Watson-Mitchell remains a fan of its business model and anticipates further growth over the next few years, shares now 53p, Brokers TP 112p.

Mark Watson-Mitchell

Oct 31, 2024

Time Finance (LON:TIME) – The Growth Continues And Now With Extra Funding

I do not expect any fireworks at next Tuesday’s AGM being held at the Hilton Manchester Deansgate from this AIM listed independent specialist finance provider.

What I do expect though is some confirmation that the £53m capitalised group is still on track to record a near 25% increase in current year profitability.

The Business

Time Finance's purpose is to help UK businesses thrive and survive through the provision of flexible funding facilities.

It offers a multi-product range for SMEs concentrating on Asset, Loan and Invoice Finance.

While focussed on being an 'own-book' lender, the group does retain the ability to broke-on deals where appropriate, enabling it to optimise business levels through market and economic cycles.

etc"

And on the new acquisition from the Oak Bloke:

Https://theoakbloke.substack.com/p/venture-life-ventures-west

"Conclusion

VLG don’t say how much below 1X adj.EBITDA/Debt they foresee being for the end of 2025. I consider only a 9% improvement to profit from 2024 to 2025 and only a 25% improvement to H&H profits is simply too pessimistic. Put it this way the 2 ex-owners of H&H I suspect won’t get their extra £2.5m if the business can only deliver £200k extra profit!!!

Beyond that the simple observation I’d also make is that growth in key VLG brands is much higher than 9%, and the headwinds through overstocking which made 1H24 are not recurring.

This is my profit model which includes 2025 (me - see the web link).

I therefore am going to agree with the “double digits” revenue for H&H combined with just 10% revenue growth for the rest of VLG.

Based on a 70/30 split (H&H adds a further chunk to the VLG brands lifting margin) and using a 45% average margin for VLG brands and 32% for Customer I get to a £28.8m GP. Lower interest rates and strong cash generation keeps interest payments below £2m and we therefore see a quadrupling of profit after tax in 2025.

So H&H looks complementary to VLG’s buy and build approach. It will help usher in stronger profits in 2025, which on a £55m market cap suggests a P/E of 8.3X. Even a 15X valuation is undemanding - and that places VLG at £100m market cap, nearly double today.

Is that perhaps why we saw 115k shares each bought by the Chair and NED today? Is that perhaps why Mark Slater continues to accumulate VLG too?"