Work Group Share Discussion Threads

[deswalker] 06/3/2012 13:00

I note that Work Communications has added three new jobs in Farringdon in the last few days making five in total and Armstrong Craven has several vacancies on its site too.

I also noted recently that Armstrong Craven has reduced its number of UK offices down to two (from 4 or 5) and suspect this is where the exceptional costs have been spent over the last couple of years. But now we are left with London, Manchester, New York and Hong Kong with possible expansion into Continental Europe. It is definitely taking time but I can't help feeling that real progress is being made.

The outer has to be a trade sale in due course once the business model catches the eye of a major multinational recruiter. I remember my Chemistry Communications shares flatlining at 13p before an agreed Offer was announced at 37p the next morning. The takeover consideration still represented buttons to the huge French agency that took them out.

[battlebus2] 06/3/2012 12:37

Yes the cogs are in the right place it's finding the top gear. Results on the 15th so we will see. Problem for a lot of small caps is finding buyers at the minute but like yourself quietly confident.

[deswalker] 06/3/2012 12:01

Bought another 20k. I was expecting a profit warning at the Trading Update but the fact that they are in line means that the second half was pretty good. The outlook statement, such as it was, also reads as quietly confident to me.

I know we've been saying it for years but this company has the potential to make big profits and I just get the feeling that they have finally got the cost base right too.

Fingers crossed.

[battlebus2] 06/3/2012 10:58

Des you fancy buying another few to help the shares along.

[battlebus2] 01/3/2012 19:49

Yes i see that the last lot were bought by Jon Moulton lets see if he's addding again.

[27howard] 01/3/2012 18:24

120k at 10p today

[battlebus2] 29/2/2012 21:16

Well done Des i was tempted myself but went for GLE instead. These results should be interesting reading if not pivotal.

[deswalker] 29/2/2012 20:50

I was the 5k today and the 10k at 14.1p a few days ago. Still maintain that this can multi bag on a 2 year view.

[battlebus2] 29/2/2012 20:42

Not much cheap stock around with a few little buys coming in before results nudging the offer.

[battlebus2] 19/1/2012 18:15

Yes SteMIS that's the way i was reading the cash position although it's a requirement for working capital when the cash starts to grow we're off again. Des i think they have learnt from the past mistake reference hiring and firing it's a difficult balancing act for a small business. I believe Armstrong Craven have had vacancies on the continent before and long may they continue.

[deswalker] 19/1/2012 09:34

Looking back over the last three years it appears that a huge amount of restructuring of the business has occurred - expansion, contraction, re-allocation of the cost base & exceptional costs. To achieve all this has slowly eaten into the cash resources.

If we trust management to be capable then we have to assume that the company is becoming much leaner and more efficient whilst fundamentally preserving the Balance Sheet. Consequently if business does ever pick up we should see much better Operating Margins going forward and substantial profitability.

Ofcourse the other alternative is that management are flailing around hiring and firing with the associated costs and running things for the benefit of the retained staff rather than the shareholders. I shall be at the AGM this year for the first time to get a handle on progress.

I notice that the Armstrong Craven website continues to have job vacancies one of which appears to be based on the continent. I wonder if they are making a first foray over there or if I'm misreading it.

Anyway, reasonable progress on the financial front but I am hoping there has been much more progress on the operational front, and that the foundations are being laid for large growth when the markets pick up.

Any thoughts appreciated ...

[stemis] 19/1/2012 09:15

25% of market cap covered by cash and an EPS of 1.1p, so a cash adjusted P/E of about 10. The key is next year, of course, where the forecast is an EPS of 3.2

Looks like the company had a much better second half - market forecast appears to be a PBT of £0.6m. Since H1 was a loss of £43k that must mean a PBT of £643k in H2. That compares with £140k in H2 2010. If we can keep that going into H1 2012 then the apparenty forecast PBT for 2012 of £1.1m looks achievable, maybe even beatable.

As Work recovers cash is being sucked into working capital. At the end of 2009, net cash was £2.3m. It down £1.0m in 2 years despite net profits. Eventually the impact of profits will counter that and cash will start to rise again.

[battlebus2] 19/1/2012 08:10

Yes believe it or not it will happen. Just spent a month in the states and slowly its turning the corner as ever we will follow.

[deswalker] 19/1/2012 07:56

I'm very pleased with that statement. Have been expecting a warning for months so delighted that they're still on track. They look to be riding the storm very well but will the storm ever end ?

[battlebus2] 19/1/2012 07:52

Net fee income up 5% is an achievement at present though cash now 1.3 million.

[battlebus2] 11/1/2012 20:58

update in the morning?

[battlebus2] 08/12/2011 22:19

MPI profits warning read like your recent post Des, again i hope we can WORK through it.

[deswalker] 02/12/2011 11:12

Totally agree about his likely eventual activism SteMiS.

Wonder if he is becoming more convinced that HR consulting is going to have some counter-cyclical qualities in this very prolonged downturn. Lots of restructurings are going to be required ...

[stemis] 02/12/2011 10:36

Yes, definitely good news. I held shares in Infast where Moulton had a stake and that ended very happily. He's not likely just to let WORK bobble along doing nothing for ever other than provide a good living for the management.

[deswalker] 02/12/2011 08:31

Hi bb - JM's shareholding is currently worth 800k. Now he's obviously a rich guy but I suspect this is not a totally inconsequential sum to him so he's going to want a return in due course. It's good news that it's clearly on his radar and not consigned to some bottom drawer somewhere.

[battlebus2] 01/12/2011 22:27

Great news Des and what a steal at 10p, i'd have taken them myself at that price.That explains why the share price remained steady.
Who can the seller be and why such a poor price we may never know anyway a little vote of confidence.

[deswalker] 01/12/2011 19:30

Interesting RNS late on. Confirmation that is was Jon Moulton who took those 208k shares at 10p which went through the other day. Good news IMO as it signals that this company is not something he's forgotten about. I still think that he is the most likely catalyst for outing the value in due course.

[battlebus2] 28/11/2011 21:27

That's a slightly pessimistic view Des which i hope doesn't come to fruition. A profits warning? Reading the accounts again leaves me hopeful for January. The cycle will come to an end just a matter of timing. If that was a sell today the shareprice remained unusually steady hopefully not famous last words.

[deswalker] 28/11/2011 19:44

Yes I'm still holding.

Medium/Long term I'm optimistic. They have quality businesses that can absolutely coin it in when conditions improve.

Short term I'm rather more jumpy. Whilst I've noticed that they are still looking to hire at Armstrong Craven which presumably indicates confidence I think that the results for 2011 could disappoint.

As flagged by the house broker they (wisely) took a big exceptional back in July to reduce numbers at Work Comms when they realised things weren't going to get better for some time. A shame they didn't realise it six months earlier but better July than now. The exceptional should be nearly half recouped by now in reduced continuing costs for virtually the entire second half.

As we know they have a better pipeline for the second half and the business is traditionally weighted in that direction anyway. But that said, I think a profits warning in January is a possibility and suspect that the 2011 Prelims could be littered with words expressing just how tough things have been this year. I hasten to add that this is a guess based on nothing but gut feel.

That said, I think these lean times are preparing the way for better margins going forward and these will translate into large profits in due course. I am hopeful of a big improvement in 2012, perhaps not the 2012 broker forecast which might need to wait for 2013 to be met but a comfortably profitable cash-generative business nonetheless.

I'll be looking to add if we get a big drop in January and see no reason why 40p shouldn't be a target two years from now on the expectation of a strong 2014 performance.

As I'm sure you realise the time to hold cyclicals is at the bottom of the cycle and that is where we are now. We just have to hope that the cycle comes to an end at some point ...