So Hydrogen are doing an all share deal for £3.3m. Why didn't they pay cash instead of diluting holders at this depressed price? They have £2m in net cash and their balance sheet is rock solid and could handle a bit of debt.
Overall i'm disappointed that they have structured the deal this way. Hopefully net profit and eps will rise at least.
Yes, the figures seem to be about as good as we might expect, so no panic here! Importantly they have branched out very successfully into 'business transformation' (sacking people from Barclay's), and away from energy. This perhaps shows agile and deft management at work. Happy to hold, for now.
We keep coming across each other on these boards and I think we look for many of the same things in investments. If you'd like to contact me off board to discuss ideas as I do with other investors you can contact me at [email protected]
If you'd prefer to stick to the boards then that is fine too.
Everything is down by a third, resulting in a trading loss of £0.7m, but we are back to having net cash of £2.6m. The dividend is passed, as expected. Overall these results are not as bad as I had feared. The business looks genuinely strenghtened and re-focused. One for the longer term perhaps?
I'm not so sure that HYDG doesn't fit the criteria for the fund. At the current price the stock is trading at a discount to liquid assets less all liabilities (although I would guess that in an insolvency shareholders wouldn't get anything back after the costs of staff and lease terminations has been paid).
The fund factsheet specifically states that they buy recruiters.
"The process means the fund gravitates to service companies -
recruitment firms, financial services, consultancies, and on
I don't think HYDG quite fits the Deep Value criteria, so it is probably for a client. That is a pretty decent size of punt! HVN had decent figures this week, but HAYS disappointed, so no indicators there really. Results will be on 22 March. They may be interesting.
Yes, I hold here and am still watching. I agree with everything you say, but have two caveats, both of which you mention. First the cash will now be exhausted, so no cash, but also, as you say, no real debt. Secondly the company has in the past drawn most of its profits from supply staff to oil-related sectors. this market has collapsed. The company has diversified a bit, but the etent of this is uncertain. Overall this is a good recovery punt, but above all a punt! I would wait until the next set of figures before buying any more.
Is anyone still following this stock? There doesn't seem to be much interest in it on any of the financial BB's but I have bought two lots on the way down. First at 54p and then 41p so it is clear that I have gone in a bit early but I still feel that they are potentially very good value at these levels and even more so at 30p as a recovery play.
Although the first half showed a very substantial loss this appears to be largely due to the exceptional costs of downsizing their Technical and Scientific division which has been hit very hard by the collapse in the oil price.
The Professional Support Services division recorded an operating profit of £1.262m and if this is repeated in the second half (bearing in mind they did considerably better in the second half of last year, not sure if this seasonality is usual) then the shares will be trading on just under 3 times the operating profit of this division and at about the level of net current assets.
They have no debt so don't look in danger of going bust.
I guess the big unknown is whether we are heading into a global recession which presumably will hurt recruiters quite badly. I just don't know.
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