Spaceandpeople Share Discussion Threads

[topvest] 11/9/2014 21:37

At least directors were buying today which is encouraging.

Edison Research estimates lower revenue of £13.5m but a PBT of £0.92m pre-exceptionals or £0.55m after exceptionals. It's odd that they have missed that the company has forecast £16m of sales in today's RNS!

Given the second half bias on revenue I'd expect more than this. I will go for £15m revenue and a £0.5m profit post exceptionals as it's always difficult to recover from a bad year. Nevertheless, I'd hope that growth resumes next year and profitability bounces back.

I wonder who the new Chairman is going to be?

Hopefully, we may get more contract news in H2.

This company is in Scotland as well, so it's impacted by next week's vote.

[topvest] 11/9/2014 20:01

On the big holders, things may be changing at Gresham House. Their new strategy, if approved, will be to invest in illiquid assets and so, no doubt, this would qualify. Can't see them selling now. Isn't the HH holding held by lots of individuals rather than being a single holding?

[bench2] 11/9/2014 14:09

Note from Edison just out

[pugugly] 11/9/2014 13:26

The success or failure of SAL totally depends on whether the marketing departments who have a very wide range of media through which to promote their products believe (or have trial data to support their decision to purchase short term space from SAL) that this route offers them more sales for their budgets than other routes.

The very significant drop in revenue strong suggests that they are voting with their budgets NOT to include SAL in their marketing budget - or if it is included then only with a reduced spend.

BIG QUESTION:- HOW VALUABLE IS THE OFFERING TO PROMOTERS ???

[bench2] 11/9/2014 12:40

We have a long wait until the final results at the end of March 2015 , unless the company is more forthcoming with trading updates both positive and negative . HH and GH both had a 17% stake in 2013 and the share price will depend on any decision to stick with their reduced holdings or continue selling . Hopefully this year trough EPS of between 2-3p will then see a recovery back towards 9p . The 2p div forecast will help , cheap provided you are convinced by the business model and that this is the kitchen sink year .

[topvest] 11/9/2014 11:57

Just short term noise for long-term holders to capitalise upon, if that opportunity arises.

[cycle2] 11/9/2014 11:55

The elephant in the room, to my mind, is when Hargreave Hale will stop selling. Until then the share price will struggle to go up. So, even if you believe this company is undervalued as I do, does that mean this is the time to add to your holding?
I'm not sure... (Just sold half my holding this morning)

[topvest] 11/9/2014 11:49

Rubbish - revenue is up on last year. It's still growing but more slowly.

Agreed, on the P/E ratio, if you assume this company will only ever make £500K PAT then it is fairly valued/expensive. If you think its capable of more (like the £1.8m PAT that it made last year), it's current worth 3 times that. The answer is somewhere in the middle.

[seernb] 11/9/2014 11:27

Another thing is that revenue is down 30% and isn't predicted to comeback in 2015.

[bigdazzler] 11/9/2014 11:16

Must admit fundamentals is not really my area of expertise however I still like to read the reports and broker views etc as clearly fundamentals are the price movers. I just catch the ride on T.A.

One thing that struck me when reading the Edison report today was that it appeared quite negative for a positive report ( if you catch my drift). Normally Edison reports are packed with glowing positivity this one did not leave me with that feeling and certainly did not give me hope for short term price movement. As I say fundamentals are not my bag and I'm sure others will have a differing view based on the report.

[seernb] 11/9/2014 10:44

Halving of pre-tax profit. SpaceandPeople will earn about £500k after tax, put that on a P/E of 10 and you get £5m market cap, so below 30p.

[battlebus2] 11/9/2014 10:01

envirovision how does this look insolvent??

[staverly] 11/9/2014 09:01

Correction to my earlier post ... proposed dividend for FY to be cut to 2p from 4.1p

[envirovision] 11/9/2014 08:54

This looks insolvent to me.

[topvest] 11/9/2014 08:41

Well again I disagree really - £8m market cap for something that is well capable of making a £2m profit in 2015 or 2016. This year it's likely going to make anything between £0.5m and £1m. Even if you assume £1m is the new normal, it's cheap. Of course, if things deteriorate even further then it's not cheap. I may add more if this goes much lower as I have confidence in management's abilities given they have built this company from scratch which is no mean achievement.

[pugugly] 11/9/2014 08:29

Whether now a buy or sell very much dependent on one's view of management capability and probably more important the forward trend in customer uptake (or lack of it) of the pitches available.

With increased pressure on marketing budgets potentially a negative trend.

A very wide range of forward p/e possibilities from a high of 15 on a FRS3 basis in a worst case situation (based on figures in the trading statement to a low of 8 on a normalised basis if all the upside is achieved.

Looks very fully valued to me at 40p given the high degree of uncertainty.

[topvest] 11/9/2014 08:27

The other encouraging point are that at £16m of sales they are still achieving sales growth, so it's hardly the end of the world. Think this will recover in 2015 personally, but I would say that!

[topvest] 11/9/2014 08:25

I'm not sure that is correct - they have repaid their bank loans in full from the acquisition a few year's back. They have a healthy cash balance and a revolving credit facility of £2m, with £1.25m drawn.

They are normally quite cash generative in H2 - with reduced capex and little tax to pay on this year's reduced profit their cash position is reasonably healthy and they can well afford a small dividend.

Remember that the directors don't get a bonus and rely on the dividend as part of their reward. A 50% cut in the dividend was what I had already assumed and think it is sensible to keep investors on board until 2015 when hopefully things will start to improve.

The main thing about SpaceandPeople is the entrepeneurial sales culture - that is still present and it's nice to see that they haven't lost their touch on new contracts or developing new businesses. If you look at the "Other" column that has now turned profitable which will remove the drag on earnings in 2015.

[staverly] 11/9/2014 08:09

Maintaining the dividend looks daft. The main narrative conveniently seeks to take credit for reducing the short term debt whilst ignoring new exposure to nearly x3 long term element DYOR

[bigdazzler] 11/9/2014 08:09

Painful, however this has been playing out nicely on the charts and on 1/9 I posted that it was likely this would hit the 38-40p area so no surprise really.

[stocktrawler] 11/9/2014 07:56

Looks like the overhang was a blessing in disguise for some!

[topvest] 11/9/2014 07:55

Well I'm encouraged by the results actually as we all know they are having a bad year. Another profit warning was on the cards. The German slow-down is probably the most concerning.

However, they have issued some pretty comprehensive comments today which look well thought through. Also, there were at least some contract wins, a new non executive appointment, clear comments on cash position and dividend.

I think everyone expected another warning for this year to be honest and it was pretty much in the price. A 2p dividend looks sensible. S&P+ looks like its doing well.

Their results are H2 loaded, but it looks like they have tried to give a more realistic expectation. On balance, I'm encouraged more than dis-heartened. Clearly we are going to be in the 40-60p range for a while though.

[hatter2] 11/9/2014 07:17

Interim results and also a trading statement out today.

The trading update is essentially another profits warning with downwards revision of forecasts following deterioration of current trading.

I still like the business but it’s had a very rough last 6 months and things look to me as if they will get worse before they get any better. Shame, I hope they make it but for today we could see sub 40p IMO.

[cycle2] 04/9/2014 20:31

Couldn't agree more Paul. I keep looking at the valuation thinking that's a crazily low price for a business that is essentially a 'fallen angel' and should recover well. But, like you, I just can't bring myself to buy more with HH continually selling into the market and not 'walking up' the share price at all...

Any idea when interims are due?