some reason that link not working18 Jan 2011 13:10
So ill just paste what it says in full...
Third Quad Capital*/***
Half calendar year results published on 21st September from Third Quad Capital show a period of intense development which accelerated with two acquisitions in August showing no slowing of that pace. We expect that the results of the rebuilding of Third Quad will become apparent during the next 18 months. Following the purchase of Softline on 20th August Third's software business now has critical mass while the purchase of VSA Resources on 12th August allows CEO Andrew Monk to monetize his skills as a corporate broker. We have reduced our price target on the basis of a modest adjustment to forecasts but the far greater visibility of earnings and strengthened balance sheet fundamentally de-risks this proposition and hence, at 0.65p, our stance is strong buy with a 1.2p target.
The results for the six months to 30th June are clearly backward looking and hence offer little guide to the future. An operational loss of GBP168,844 (pre-exceptional) was reported on turnover of GBP456,925 which compares to a loss of GBP236,856 on turnover of GBP482,788 in 2009. Strong sales in April did not follow through to June however the second half should be boosted both by the recent acquisitions and also the distribution deal for Ability software signed with DSG International. However, we do not expect to see the real top line benefit -and a return to profitability -until calendar 2011.
VSA is authorised and regulated by the FSA and is a London based firm founded in 1989 which provides specialist corporate finance and broking services to companies, particularly those involved in the global resources, oil and gas industries. VSA is a member of the London Stock Exchange and is a PLUS markets corporate adviser. It was acquired for a nominal 100p and the taking on of GBP131,000 of liabilities. Initially it was being run on a care and maintenance basis and our forecasts are of a loss of GBP5,000 a month for 2010 but a move into profitability in 2011 as Monk builds up his team. But one large fund-raising could change that picture dramatically (for the better).
Softline founded in 1989 is a distributor of Macintosh software and is based in Crawley, which is near to the existing former headquarters - now for sale. This is a complementary fit to Third's PC based software subsidiary. It brings with it an experienced team of staff and by integrating the two businesses there should be cost savings and significant revenue synergies. The acquisition should provide critical mass. For the year ended 30 June 2009, Softline made an underlying pre-tax profit of GBP240,005 and ended the year with gross assets of GBP1,331,829.
The Softline purchase was an astute deal which retains cash in the company as the total consideration was GBP1.3 million but only GBP25,000 cash has been taken out of the company. There is a further incentive payment of GBP200,000 if Pre Tax Profit hits GBP500,000 in the year t
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