This share is massively undervalued on a sum of the parts basis. The board should sell all of the constituent businesses off and return the proceeds to shareholders. It's never going to make a meaningful profit with £500k of central costs.
I bought a very small stake here as I feel on a sum of the parts basis this company is worth twice the current price or more. The downside is that it's really too small to be listed and the board ought to sell up and return the proceeds to shareholders but whether they will or not is anybody's guess.
They used all the money on acquisitions including performance work outs.Brexit, increasing input costs, difficulty in securing new contracts, bad debts, reduction in sales dropped straight through to lower profits.Good demand for the shares (capital raising) whilst paying divided, but now doubts over that if no sustainable increase in profits . Next results crucial, if good and dividend maintained, then could see sharp upward rerate.See previous RNSs.
At the nine mths stage optimistic comments.
Cash £353,000 from £153,000 after paying final amounts for acquisitions.This company generates strong positive cash flow and I would anticipate another £200,000 by the year end.
Remember there was approx £900,000 on the balance sheet before the two acquisitions and the management were paying special dividends (1p) to get rid of it !!
Net assets could rise to £7mi , 55p /share.
To buy currently 30p
Yield 5% Could be 50% higher (only cost another £ 64000)
Prospective p/e 6.6
Cash approx 4p/share,adjusted p/e 5.75
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