Welcome to our new product “Friday Takeaway”
This will delve a little deeper on individual companies and focus on non-house stocks under £200m market capitalisation to help raise awareness
| Index | Thursday 7 November close price | Weeks change % |
|---|---|---|
| FTSE 100 | 8,141 | +0.4% |
| FTSE Small Cap | 6,868 | +0.5% |
| AIM All Share | 738 | unchanged |
COG- Brain Expansion
CSSG- Secure Brand
INHC- Doctors Orders
| Price | Results | Largest Shareholders | Value |
| 28-30p | Y/E: December | Nigel Wray 12.0% | Cash Balances £3.4m |
| Spread: 7.1% | Report: May | Canaccord 9.1% | GP Margin 81% |
| 52 week High/Low: 60p/26.4p | Report Interims Aug | Octopus 9.0% | Recovery into growth |
This neuroscience digital technology provider for academic research and drug development, is improving its own wellbeing. Particularly, since raising £2.6m at 40p, in May 24, in which most of the Directors took part and taking cash to around £3.4m. After a testing 2023 the consequent actions show progress in the interims to June 2024. The gross margin increased to 81% (79%) and despite a 7% reduction in revenue to £5.6m, its adjusted operating losses are significantly lower at £0.1m from £2m. This material reduction in R&D and Admin costs is evidence of the success of the corporate restructuring, while expanding the salesforce increases the commercial capability.
COG retained 22.1% after spinning-off Monument Therapeutics Ltd in April. There is news the Foster Foundation invested £1m equity to help support its clinical development of MT1988, a novel treatment for the cognitive symptoms of schizophrenia. The post investment value of £8.35m will represent a significant increase on the balance sheet value.
The acquisitions of Clinpal and Winterlight for shares in 2023, extended the product range and client reach, and is also accelerating product development. It combines with existing digital cognitive assessments for Alzheimers, to produce a strong multi-product solution for measuring memory and processing speeds creating assessments to meet clients' clinical development. These new services along with the strengthening of the commercial operations, has led to a deeper pipeline of new sales opportunities for the expanded sales time to close.
Comment: The recovery and growing trading prospects should be clear for the December Y/E Trading update expected in January.
| Price | Results | Largest Shareholders | Value |
| 76-82p | Y/E: June | RM Fiorentino 26% | Net Cash £4.3m |
| Spread: 7.9% | Report November | Liontrust 9.9% | EBITDA/ Ev 6x |
| 52 week High/Low: 80.5p/54p | Report Interims Feb | R. Long 7.4% | Buy and Build develop-ment |
In June 2023, Croma sold Vigilant, its lower margin man guarding business for £6.5m to be paid in stages. At the June year-end net cash was £2.14m and since then a further £2.2m has been received so net cash is around £4.3m with no borrowings. This is being invested in growing the Croma Locksmiths and Croma Fire & Security division with a buy and build strategy to create the UK’s first nationwide network of branded Security Centres.
Croma designs, installs, and maintains a wide range of security systems, from Intruder Alarms, CCTV, and Access Control systems, to Biometrics, Door Entry, and Automatic Door systems, and offers 24/7 Remote Monitoring. The strategy is to acquire traditional locksmith stores at moderate valuations and transform them into modern Security Centres. These will have a wide in-store product range and a broader range of services with much greater profit potential. The target is to acquire 3-5 shops per year with a target ROI of at least 15% as they become Security Centres.
Finals to June 2024 reported an 8.9% increase in revenue to £8.74m, with EBITDA on continuing operations up 13% to £1.06m, giving an EBITDA/EV 6x. FY25 trading, is reported to have started well with good demand from its commercial and retail customers increasing security, perhaps scared by summer’s civil unrest. A £0.4m contract was won in April for the installation of a hospital’s security systems as part of a growing relationship with this NHS Trust where there is potential for further projects.
Comment: The valuation seems to ignore the likely profit potential for a branded national network of security centres with a wide range of products and services.
| Price | Results | Largest Shareholders | Value |
| 8.5p-9.5p | Y/E: March | Lombard Odier 17% | Net Cash £3m |
| Spread: 11.97% | Report July | Zesty 13 % | 78% GP Margin |
| 52 week High/Low: 28p/7p | Report Interims Nov | Blue Muse 7.6% | Active discussions |
A digital health technology platform ‘proven’ to improve client’s operational efficiency, reduce costs and has case studies showing it even makes patients happier. It’s Interims to September 2024 report a difficult year with a 11.5% reduction in revenue to £5.4m and a loss before tax of £2.3m, gross margins are 78.2%. The loss included £4.4m invested in development and there is an Attend Anywhere virtual video platform now available. The General Election is blamed for causing a pause in new business.
Revenue is from the Zesty Portal, which is a suite of software solutions transforming care delivery and the patients’ healthcare journey. The services are delivered via a mobile NHS app and currently 3.9m patients can access the Zesty portal, which is up from 2.5m a year ago. The system made 12m plus hospital appointments and reduced 50% the ‘not attends’, by 50% saving the NHS an estimated £115m. Since the Interims it won a £1.5m contract to digitise diagnostic and bookings in North Central London, which will contribute to higher group revenue in H2. There is active engagement with six other NHS health boards, the progress of a pilot project in cancer surveillance and smart use of AI are due to be reported.
Comment: In theory, our estimated c. 9-month cash runway should be sufficient for further high margin contracts to be closed.
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