Innovaderma Share Discussion Threads

[eastbourne1982] 25/9/2019 11:27

Make a lot of money ?? Of course you do.

[basem1] 25/9/2019 11:01

Yes I am a fickle investor who makes a lot of money but not by buying and catching falling knives. See you at 2.80

[backtogo] 25/9/2019 11:00

Looking forward it is still overvalued in the markets eyes. It doubled profit, but still only managed to make £1m after tax.10m market cap? To go higher they would need to prove they can double profit year after year. A tall ask for any company, never mind in a turbulent retail market with Brexit around the corner.Avoid!

[bookbroker] 25/9/2019 10:36

Whatever the market view here suggests, this would make a nice little takeover for a company in the male accessories sector, in order to obtain a listing for all its hassle, the valuation is pretty ridiculous despite the fickle nature of markets. HC. does not seem to command too much respect, he needs to address that!

[eastbourne1982] 25/9/2019 10:27

Most of my best investments are when the chart has said no way.

Are you one of those fickle investors who buys when everyone else is buying and you are overpaying substantially.

[basem1] 25/9/2019 10:22

CCT - The chart says NO WAY

[eastbourne1982] 25/9/2019 10:20

I've been looking at these purely as a punt however at the moment I've opted for CCT.

CCT market cap of 72 million, net cash of nearly 20 million and profits around 11 million.

[5oletrader] 25/9/2019 10:17

"Dear Bears...

I wouldn't be so sure of yourselves" Anything can happen in this game.

[eastbourne1982] 25/9/2019 10:09

The market thinks this company is as reliable as a blind man driving down the M25 at 7.30am.

[bigfrocks] 25/9/2019 08:45

Pure manipulation, strong strong results! Chill baby

[anony mous] 25/9/2019 08:37

Well as always share price rises for the day traders and now back to the drip drip in share price.Pathetic.

[johnwise] 25/9/2019 07:17

Innovaderma (IDP)

Final Results
The Group remains in a strong cash position and continues to carry no external debt

[franki8] 24/9/2019 16:04

Eezy I am well aware R&D and valuation of intangibles in general is a grey area, thank you Sherlock.

Our fundamental disagreement is that in my view product development creates value, whilst in your view it doesn't. Both have a point, but i myself happy to rely on accounting standards

[shanklin] 24/9/2019 15:48

How does the annual capitalised R&D expense compare with the rate at which it is being depreciated?

[lord loads of lolly] 24/9/2019 15:27

eezymunny - agreed, the expenses are likely to be annual & ongoing. But - and it's a big but - the expenses each year are likely to be incurred on NEW AND DIFFERENT products. For example, Wonder Serum's development costs are largely incurred already, but sales of this line should continue for a few years yet. That - I believe - is the justification for capitalising them. Though I appreciate you may still see it otherwise. Anyhow, I've said all I'm going to on this for now.

[eezymunny] 24/9/2019 14:21

franki8 it's a VERY grey area. You just have to convince the auditors and you can choose to expense/capex what you like. I simply HATE companies that choose to capex what are pretty much inevitably ongoing annual expenses...it's just ridiculous IMVHO

[franki8] 24/9/2019 13:19

you are making no sense eezy. Research is expensed, Development is capitalised - provided the technical feasibility of a development project can be demonstrated. Refer to IAS 38

re fevr - I do not know the background of the matter, but:

If an entity cannot distinguish the research phase of an internal project to create an intangible asset from the development phase, the entity treats the expenditure for that project as if it were incurred in the research phase only - this can be the reason

[kemche] 24/9/2019 13:10

Eezy - I respect your decision. It's not for everyone - that is what makes a market.
Bon chance elsewhere.

[eezymunny] 24/9/2019 13:09

Look at FEVR. They have presumably got people on salaries paid to develop new drinks etc. How much of those costs do they capex? None. Zilch. Zero. All expensed. That's the way to do it IMVHO.

[eezymunny] 24/9/2019 13:06

And Kemeche you say "In terms of cash generation it may be pertinent to note that trade debtors have gone up because of increased supplies to retailers".

That may be the case but working capital SHRANK by a bit (see note 25!)

Overall very little cash generated but promising numbers IMO.

Not my cup of tea at all.

[zico01] 24/9/2019 13:05

Volume building up nicely once the seller has finished it will climb up

[eezymunny] 24/9/2019 13:01

Yes well this "investing for growth" is what I hear every time I see companies capexing a lot of stuff. My argument is that a team of product developers in a product company like this is inevitable and will repeat year after year (just like software developers). Capexing just looks like a way to flatter the headline numbers. It's legal and you can argue all you like but a) I hate it and b) cash flow is king (always, forget the P&L).

Just my views. Overall IDP seem to be progressing. Numbers aren't bad. I'd buy it on todays' P/E if the cash flow matched the P&L - but it doesn't!

[lord loads of lolly] 24/9/2019 12:37

eezymunny - I think it's called investing in growth. IDP makes it very clear in their trading statement that they've no intention of standing still. The company operates in a competitive & fickle sector, where sales momentum is largely achieved through NPD. Wonder Serum being a prime example. Money well spent I'd say, particularly when the company has zero debt still and remains cash generative even after NPD expenditure.

[kemche] 24/9/2019 12:36

Eezy, Whilst I usually appreciate your analysis could you possibly elucidate as to why genuine product development costs cannot be capitalised? You will note that the company has developed a number of products over time and continue doing so - should it all be expensed immediately?

In terms of cash generation it may be pertinent to note that trade debtors have gone up because of increased supplies to retailers - who famously demand extended settlement periods. But I am sure you know that.

But otherwise excellent analysis.