Eruma Share Discussion Threads

[cyprussteve] 31/1/2012 14:49

Maybe worth taking a look.
Market cap only £2.3m – only 18.4m shares in issue.
Directors and others recently converted some debt into equity on 20-12-11.

Growth market in my opinion – contract wins appear to be on the increase, plus new market recently opened up in Korea – results s yet to be achieved from this.
Loss making last year – IF they can turn this into profit to year end December 31st 2011 due to increasing contract wins and debt reduction, it would have a significant impact on the share price
High risk – high benefit.
Regards
Steve






Quality shareholders including significant Director holdings.

[thegreatgeraldo] 23/1/2012 09:57

Contract win..

Eruma plc, the AIM traded specialist provider of counter terrorism, intruder prevention products and intelligent lighting, is pleased to announce that it has won a c. US$270,000 contract to install its Secur™ range of security blinds at a major international Non Government Organisation ('NGO') in Yemen.

[backmarker] 05/1/2012 18:47

just happened to look in and find the above RNS.

the blinds and security side may be the meat of this company, but I still believe that Illuminex will be the gravy.

I only hold a few bombed-out shares here from long ago, but continue to hold (i) in the hope that I may at least get my money back one day, and (ii) because I've got plenty of other stocks to use as CGT off-sets !!

[simonparker5] 20/12/2011 07:51

Steve this is a very interesting move. As you say it will clear a chunk of debt on the balance sheet by issueing shares at a price not too far away from the market price. The amounts here are not dramatic, Wayne for example is only converting £10K. I see it as another peice of the jigsaw which when combined with the recent options, which were issued at a higher price, gives me confidence.

[solarno lopez] 20/12/2011 07:45

They may have no option

[cyprussteve] 20/12/2011 07:17

Interesting RNS today - personally I think this is good news.
It will greatly reduce Company debt from the balance sheet, and it shows confidence that Directors and other creditors are happy to accept shares in lieu of clearing debt, in return for shares, and, at a relatively low discount of some 10%.
What do you guys think ?

[cyprussteve] 15/12/2011 13:56

Has anybody noticed how fast this share price can move on just a few trades ? - the shares are VERY tightly held, and, it would only take a couple of decent size contract wins or deals to turn this Company into profit, and a significant re-rating.
Very difficult to buy in any quantity online.
I have confidence in the Directors here - they have significant personal shareholdings, and excellent track records.
In my own view - ( pehaps biassed as I have an investment here) - this is in a growth market, and, offers an excellent speculative opportunity.
Few holders seem willing to sell, and, it ticks up on very few buys, as it is at present below most investors radars, the market cap is only £1.6m, and only 17m shares in issue.

[zangdook] 11/11/2011 03:38

keepitsimple

If you're still around, could you put the correct website in the header?



thx

[cyprussteve] 07/11/2011 08:50

Level 2 showing 4 v 2 - it seems to be difficult to buy more than 5,000 shares online,without going through to your broker, and, it is hard to avoid the impression that the mm's are extremely short of shares - every buy seems to be ticking it up.
As in my previous postings, I have significant confidence that ERU will be in profit during the second half year, and then we can expect a major re-rating.
It seems that other investors are coming to the same view, and are taking the opportunity to buy at the current extremely low market cap.
Good luck all.
Steve

[simonparker5] 07/11/2011 08:29

Good strong start here this morning. If we can push a little furtehr and hold we will be closing at a current year high.

[dropside] 04/11/2011 20:55

Thats the significant thing for me - the very low market cap for the potential scale of the market. Even at 20p the cap would only be £3.4m . At PER of 10 that would assume a profit of £340K , very modest.

Of course right now they are loss making, and the current market cap implies there is only a slim chance of that changing. IF they can show this half year that they are turning into profit then the market rating will shift substantially. The recent RNS's give signals that we are close to profitability.

Once survival and profit is assured, and cashflow from the larger contracts and the timing of these will be important, then it is a case of considering the upside. Here it is very large indeed - hospitals, schools, banks, embassies, police stations, government buildings etc are all potential customers. It is a very scaleable business and the operational gearing will soon turn turnover into profit as the fixed costs are covered.

There are still elements of this business that are not completely clear to me, mainly because it is breaking some new ground - there is not a mature market for this technology. So there is risk - but I believe the risk-reward equation here is very exciting though I would not bet the entire farm!

[cyprussteve] 04/11/2011 14:20

Either market sentiment is changing significantly here, or, investors are anticipating contract wins.
With the current low market cap of under £2m, if the Company is able to turn around into profit in the second half year , as I believe is highly possible / probable - then we could see a significant re-rating..
On previous contract wins I have seen the mm's tick ERU up by 10% before the commencement of trading., and shares are very tightly held.
It has been some time since we have had an RNS regarding new contract wins - and the signs from the previous ones have been most encouraging.
As always, one can decide to wait for news before investing, or, to buy now at the current price, which is clearly a matter of judgement and / or confidence.
It is my opinion that ERU has an excellent product in what I perceive to be a growth market, and, hopefully future newsflow will reinforce my view.
As we have witnessed today, this share can move very fast on only a few trades, which indicates how tightly it is held, and it would appear that the mm's are short of shares, as, they are difficult to buy in any quantity.
The last trade of the day of only 10,000 shares went through at the full offer price.
As always, time will tell.
Have a good weekend all,
Steve
PS – For those who may be interested, the link for trades on the PLUS market is below.

[simonparker5] 04/11/2011 12:57

Someone having a nibble. MMs must be short of stock to push this up 11% on 25K of buys.

[tday] 02/11/2011 13:44

If you look at the 5 year chart, this share is either a 10+ bagger or a 0 bagger. Not I think a share for widows and orphans; best left to speculators.

[dropside] 01/11/2011 19:33

I posted this on iii, someone suggested I post here too as not everyone gets over there..

Eruma has some exciting characteristics that you can often see, particularly at the moment, in the small cap resources sector.

Eruma is both a blue sky stock and a recovery play. It is still priced below the value of the assets (intellectual property, tax losses, installed customer base, goodwill, listing). If Eruma can turn continued losses into a profit, as I believe they will, then they will get a strong 'recovery play' bounce.

However they are aiming much higher than that. The worldwide potential market for the security blinds for windows and doors is huge- think of all the embassies, banks, government buildings , schools across the world. Of course this is only potential and only a handful have placed orders for their product. However the point is the target customer base is not a niche market with only a handful of customers to call up. Also these are quite big ticket items, around £2000 a window IIRC.

So a very exciting 'blue sky' upside. However 'blue sky' may imply it is very speculative too. In this case, with the US and UK approvals and significant business wins, they have a very serious market proposition. The breakthrough moment will be when they can turn a profit and also fund the larger security blind installations from incoming cash flow. The H2 results should be very indicative in this regard, IMHO.

[cyprussteve] 25/10/2011 16:36

Interesting buy of 61,000 shares at the full offer price of 12p just before the close - maybe the mm's had been working that buy all day for a trade of that size, as otherwise surely a premium would have been paid given the usual trading limits the mm's currently have ??
Ciao
Steve

[dropside] 24/10/2011 19:32

Tried to buy a few more today, best offer on line was 2,500 at 11.99p. Very hard indeed to buy in quantity.

[cyprussteve] 24/10/2011 11:53

If I have done my sums correctly, at a share price of 20p this would still have a market cap of only £3.2m, and at 30p a market cap of only £4.8m.
Of course, that depends on ERU gaining future contract wins, and turning the Company into profit, as I have every confidence they will, but, it does show the potential.
As always, I could of course be wrong, and, time alone will tell.
Regards
Steve

[simonparker5] 24/10/2011 10:54

Steve I have bought a few this morning and yes it was difficult unless I bought a couple of 5K. I see we are 6th on the leader board now, perhaps we will get some well deserved attention now. All the best.

[cyprussteve] 24/10/2011 10:45

Has anyone tried buying today ? - I see small buys going through on AIM and PLUS, but, I have a feeling it is difficult to buy in quantity.
I can't do a dummy buy myself as sadly no funds in my account.
Ciao
Steve

[cyprussteve] 20/10/2011 01:52

Thanks, dropside.
Excellent point regarding the tax losses - this is clearly hugely significant as the Company progresses towards profit - it effectively gives them a "tax holiday" of their first £5.5m profit !!!! – ( I am not familiar with the exact provisions of the Inland Revenue on this, or the timescale involved)
The key questions I asked myself before investing were as follows:
1) Do I have confidence in the quality, track record, and experience of the BOD ? - the answer is, "Yes I do - very much so" - see link below.

2) Do I believe in their product ? This was an area I knew little about, so, I made extensive enquiries from many previous business colleagues who are in, or have contacts in, the security business. These enquiries revealed that Eruma has a product that is extremely highly regarded by the professionals, is manufactured to an extremely high specification, and, is competitively priced.
3) Is the Company in a growth market ? - Sadly, my view is yes - the world is becoming an ever more unsafe place, whereby security of both property and people, especially in high profile locations, is becoming viewed as not only desirable, but, in many cases, essential. I believe that the track record of Eruma in the last year of contract wins, ( plus quite probably / possibly many others that are considered too small to report in an RNS ) - offers significant confidence that contract wins will continue, and possibly at an increasing rate. The links below support this, as does a THOROUGH read of the recent interim results.


The Company has not announced any contract wins since May - ( although as above they may well have secured contracts that are not considered large enough to issue an RNS on). The key question here is whether I have confidence that future contract wins of both size and quantity will be forthcoming - my own view is "Yes" - but, sometimes these things take time, and, had any such contract wins already been announced, then the share price would reflect this and the market cap is currently only £1.6m - herein lies both the risk and the reward - do we, as investors, have confidence that our BOD can turn the Company around from a loss making Company into a profitable one ? If we knew the answer to this for sure, then we would all be rich people, but, one has to make a decision based on the best research and information that is available.
I made the decision to take an initial holding, and to build on this holding as funds permit, because it is my belief that there is every possibility, and I would go so far as saying that I believe there is a strong likelihood, that the Company will be reporting a profit during the second half of the current year, If I am correct, this would warrant a major re-rating , and makes it a potentially high reward investment - albeit, I totally agree, a speculative one. There may be many that do not share my confidence, in which case, clearly they should not be investing here. As always, it is a risk versus reward equation, and, in my own personal view, I have the necessary belief to invest.
4) Have the BOD invested in the Company themselves ? I accept that this is not an essential ingredient of any investment decision, but, is in my view a key indicator as to the level of confidence the existing BOD have in the Company's future.
Please see below the link to the major shareholders, and form your own conclusions.

As always, any investment decision that each of us make is based on our own research and level of confidence in the future - and we must balance the benefit as against the risk, and decide accordingly.
Of course, we can wait for future RNS's regarding fresh contract wins - and then buy in as cashflow and subsequently profit improves, but, clearly, the share price will be higher if and when that happens - I have frequently seen the mm's tick this share up before opening when contract wins are announced, OR, to buy now at the current low share price , in the belief that the Company will prove to be successful in their aspirations and business goals whilst accepting the risk that this involves.
The perpetual investor's decision, eh !!
I fully accept that the above are purely my personal views, and should be viewed as such, but, they are views I have reached after considerable time and research into what I believe is happening within this market, and the Company's progress over the last 12 months.
Best wishes
Steve

[dropside] 14/10/2011 19:36

Steve,

Good write up.

They also carry IIRC £5.5m losses. The tax losses available are worth more than the £1.7m market cap!

If they can start to turn a profit, and they must be very close to this if the recent RNSs are to be believed, then the share price should see a marked re-rating.

[crosswire] 24/6/2011 08:46

Keep an eye on GDL


SHARE TIP SUMMARY:

Buy

Greka's shares don't look expensive, either. Broker Evolution Securities says that the average share price rating, based on 2012's earnings estimates, for Greka's drilling sector peer group stands at roughly 11 times. Yet Greka's shares trade on just seven time the broker's earnings forecast for 2012. That discount looks undeserved given its potentially impressive growth prospects within China's fast-developing CBM sector.

Buy.