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Good morning and welcome to this edition of “AIM’s Essential Top Ten”, a brief and early roundup of the main news announcements. This morning’s edition includes FGP from the Main Market.
BrainJuicer (LSE:BJU)
Share price: 370p. Market cap: £45.5 million.
Trading Update: Top line growth “generally encouraging”. Revenue up 13%, or 9% in constant currencies. Gross profit in the US grew strongly, decline in UK, China and Singapore. Operating profit increased by 41% to £1.7 million. In position to meet market expectations for the full year.
GN view: This company has one of the most impressive and interesting websites, and this contributes somewhat to the impression that there is something unique about their products. High cash generation, returns on capital, and growth are all part of the positive picture here. As ever, investors need to determine what multiple they are willing to pay.
Cyan Holdings (LSE:CYAN)
Share price: 0.18p. Market cap: £25 million.
Issue of Equity: Directors have received shares rather than salary and bonuses for the year from July 2016. Certain other employees also receiving shares instead of bonuses.
GN view: I’m not sure why the company is paying out six months of salaries, representing their contractual notice periods, in advance. Perhaps because the share price now is higher than it will be whenever they work out their notice periods? This company looks uninvestable to me.
dotDigital Group (LSE:DOTD)
Share price: 47p. Market cap: £131 million.
Trading Update: Revenue up 26% to £27 million. EBITDA slightly ahead of market expectations. Average revenue per client up 29%, more than fully accounting for the revenue increase. Cash balance £17 million.
GN view: Provides an email marketing automation platform. This is a growing but crowded sector and a sustainable competitive advantage will not be easy to achieve!
FirstGroup (LSE:FGP)
Share price: 102.2p. Market cap: £1,231 million.
First Quarter Trading Update: Recent full year trading performance has continued. Revenue decreased 1.4%: Student, First Transit and First Rail up, First Bus and Greyhound down.
GN view: Has been riddled with problems in recent years but has pulled through. An element of financial risk remains. BBB- credit rating provides some comfort.
Gable Holdings (LSE:GAH)
Share price: 3.375p. Market cap: £4.6 million.
Final Results: Strategic review evaluating how to meet Solvency II requirements. Restructuring plan underway. Current trading is profitable. Last year saw £24 million pre-tax loss due to previously-announced non-recurring items.
GN view: Suffering from big changes to the regulatory environment. Shift in business model suggests fundamental change underway, but this looks worth investigating for a decent risk/reward play at this share price.
Regency Mines (LSE:RGM)
Share price: 0.35p. Market cap: £0.9 million.
Update on Mambare Nickel Project: Regency’s partner in this Papua New Guinea project had been unable to pay its fair share of costs. But new controlling shareholders of this partner have indicated an intention to continue the project.
GN view: The sums of money involved are tiny at this stage but potentially material for Regency, if this becomes a successful mine.
Mosman Oil & Gas (LSE:MSMN)
Share price: 0.925p. Market cap: £2.3 million.
Investment & Operations Update: Two recent TSX Venture Exchange investments are discussed. Continues to seek other opportunities. Cash and market value of investments now AUD$ 4.75 milion.
GN view: Ambition to build a sustainable mid-tier oil and gas business doesn’t seem to fit with the amount of capital available to it. Shares may be priced around right, in the region of balance sheet value of cash and investments.
Opera Investments (LSE:OPRA)
Share price: 5.375p. Market cap: £0.9 million
Interim Results: Two failed attempts to make an investment are discussed. Identification and analysis of suitable investment opportunities continue.
GN view: Cash at £0.7 million suggests to me that this is a sub-scale investment company.
Stanley Gibbons (LSE:SGI)
Share price: 7.5p. Market cap: £18 million.
Corporate Update: Reconsidering the benefits of offshore tax status. BoD has concluded Executive Board should have more UK emphasis. CEO and CFO roles made redundant. General cost reduction target has been exceeded and process remains ongoing. New auditors will de-recognise some revenues from prior years.
GN view: I had not realised that the CEO and CFO were not UK-based, which seems very surprising. Overall, the amount of change taking place here, the news that the accounts will be restated, and the remaining debt despite the amount which was raised earlier this year, makes this a high-risk play even at the current share price.
Sierra Rutile (LSE:SRX)
Share price: 29.25p. Market cap: £174 million.
Corporate Update: Strong quarterly production, 34,629 tonnes of rutile. Record first-half production.
GN view: Sales led production plan appears to be a smart strategy. Shares not too far from balance sheet value.
