CML Microsystems (CML, 43p, £6.43m) Final results to March for this manufacturer of communication and data storage integrated circuits saw revenues decline by 6% to £16.09m (£17.1m) with a loss before tax of £2.09m (£1.73m) though underlying losses were £1m lower excluding an accounting gain and FOREX influences. The group has pulled back from the proposed property sale due to the fall in commercial property prices. The group consumed £0.69m cash and had £2.19m cash balances at the period end. Although losses are expected again this year the NAV of £14.8m may prove attractive to a corporate raider. HOLD.
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Crimson Tide (TIDE, 1.75p, £5.58m) Has acquired the Sage Saleslogix trade of CGHA Enterprises Solutions (CGA) in Cambridge. The acquisition consideration is less than £0.1m. With little other detail it seems a sensible move – and we repeat our SPECULATIVE BUY last issued on 08/06/09.
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Triad (TRD, 31.5p, £4.77m) Final results to March saw revenues of £32.8m (£33.3m) and a loss before tax of £0.04m (loss £0.7m) post exceptional administration expenses of £0.07m (£0.252m). With margin pressure continuing on fees in the IT resourcing and consultancy arena this year will be challenging as well for the group. The company has sufficient financial resources and debt facilities. With nothing to encourage new shareholders we rate the company a HOLD but do note it is sitting on just 0.16 EV/Sales so does offer upside potential once a recovery begins.
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Tricorn (TCN, 9.25p, £3.05m) Final results to March 2009 for this tube manipulation business saw revenues up 6.8% to £22.45m (£20.83m) with underlying pre-tax profits of £1.21m (£1.41m) and EPS of 3.16p (3.55p), reflecting a reduction in the second half performance with sales of £10m v.s. £12m in H1 and £0.4m pre-tax profits v.s. £0.8m in H1. Net debt reduced to £2.06m. Sales to the housing and automotive markets were hit hard, with the aerospace related holding up well but margins are under pressure and some softening in demand is being seen now. Sales for the first 3 months of the current financial year are down 35% compared with the same period last year. The company has taken action to realign costs and reports a positive cash flow in Q1. With a NAV around £4.7m and cash neutrality the shares rate a year view HOLD.
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Sopheon (SPE, 11p, £16.01m) AGM trading statement carries the warning that a number of contacts expected for the first half have been delayed which will result in a first half EBITDA loss on revenues lower than the same period last year. We rated the shares a Hold at 10p and this news must give some concerns that the company will achieve just breakeven for the year. To December 2010 forecast are for £0.8m and 0.45p, putting the company on a Yr2 PER of 24 times. We move from a Hold to a SELL with a target price of 8p.
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TEG Group (TEG, 51.5p, £24.87m) Has won a £1.6m contract for a 32 Solo Cage Plant in Derbyshire. The site already has full planning permission and is expected to be completed by the end of 2009. We repeat our SPECULATIVE BUY recommendation, last made on 04/06/09 at 52p.
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EG Solutions (EGS, 32.5p, £4.65m) AGM trading statement is very encouraging, reporting the strong order pipeline has continued. Although customers are taking longer to place an order the pipeline is converting as many customers are accepting that they have to “spend to save”. The group has 72% of its anticipated revenues to January 2010 secured already. Forecasts of £0.3m pre-tax with 1.9p EPS puts the group on 17x PER, well up with events, HOLD.
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Top Level Holdings (TLDH, 3.5p, £5.68m) Has announced its intention to raise $2m via a placement with warrants subject to approval at the AGM on 26th June. In addition certain directors and related parties have expressed an interest in subscribing for a further $2.5m on the same basis. The stock is fundamentally overvalued and we repeat our SELL to 1.85p.
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Neovia Financial (NEO, 51.5p, £61.76m) Has opened a potentially rewarding opportunity for its payments systems in the world of Massively Multiplayer Online Gaming (MMOG). The MMOG market has developed quickly with real money being spent on acquiring/building/trading virtual items and Neovia has signed a contract with MindArk, publisher of the leading Entropia universe. We repeat our 11/06/09 BUY recommendation made at 46p.
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Globo (GBO, 10p, £13.06m) Pre-AGM trading statement is reassuring with revenues broadly similar to 2008 levels with the exposure to public sectors offering some protection. Globo has now received €5.2m out of the €8.8m outstanding at the year end from public sector clients. The move to offering its products as software as a service (SAAS), e.g. delivered over the web, has enabled Globo to address the SME market for the first time. The CitronGO! push email product is now seeking partnerships following its launch in February. CitronGO! is competition for Synchronica’s MobileGateway – so Globo’s £13m compares well with SYNC’s £11m given Globo is profitable with forecasts of £2.79m pre-tax profits and 1.9p EPS to December 2009 – or a prospective PER of just 5.3x. We repeat our BUY recommendation, last made on 16/04/09, and raise our target price to 15p.
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RedHot Media (RHM, 85p, £30.83m) Final results to December 2008 saw revenues increase to RM22.4m (RM 19.3m) and pre-tax profits rise to RM3.9m (RM2.2m) with 10.73 SEN EPS (6.83 SEN). With the group sitting on a massive historic PER of 50 times, the group will have to more than double profits to make the shares attractive. SELL to 60p level.
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