Intercede Share Discussion Threads

[she-ra] 14/7/2018 16:26

Fair enough Paul I thought the conversion price was much lower; my mistake. However as for the cash in the bank Intercede have munched through a hell of a lot of cash which you are aware of and haven't made a profit for some time and when they did it didn't justify the share price. They were priced on jam tomorrow and it never came. So its a risky investment but if they keep getting new contracts things could change. But its a gamble so I'll pass.

Good luck with your long term investment.

[rambutan2] 11/7/2018 04:22

The recent annual report:



As Paul Scott has noticed, with costs cut and back under control, and remembering that approx 50% of rev is in reality recurring, it doesn't need a great pick up in sales from the now more sales orientated management team for the bottom line to start looking much healthier. And for the mkt cap to look undercooked.

[paulypilot] 07/7/2018 11:41

she-ra - you're talking ill-informed nonsense. Perhaps if you had actually read my piece on Intercede on Stockop... which was posted at the request of some readers, then you would be able to answer you own questions.

Yes, I did explain about the convertible loans, as follows;

Convertible loan notes - this is a bit of a nuisance. The company has c.£5m convertible loan notes in issue, which carry interest at 8%, so costly, at c.£400k p.a.. Interest is payable quarterly, so £100k per quarter cash outflow. The conversion price is 68.8125p, which is well above the current share price of 28.3p, so dilution on conversion doesn't look a problem. Final redemption date is 29 Dec 2021 - so not a problem for the time-being - the company has 3 years to come up with the money to redeem these loan notes (if they're not converted beforehand), and actually it currently has roughly that amount of cash on hand anyway. So this doesn't look like a problem to me - unless trading deteriorates, when it would become a problem.


The dilution if all these loan notes convert, at 68.8125p, would be about 7.27m new shares issued (and all debt eliminated). There are 50.5m existing shares, so that's 14.4% potential dilution - which is clearly not "massive dilution" at all, as you falsely described it. It's actually quite modest potential dilution, at a favourable (for existing shareholders) price, of about double the current share price. So not a problem at all, is it?

Secondly, nothing in my blog posts are recommendations. The readers know this, as it's been emphasised by me for 6 years, repeatedly. There's nothing I can do if a few readers decide they want to rush out and buy things I like without doing their own research. Buying into a short term price spike is usually a bad idea, but we're all adults, so people have to make their own decisions & take responsibility for them. I have never, and will never, sell into any spike - I'm a long-term holder looking for multibaggers mainly, not a short term trader. Plus my position sizes are too large to trade in & out of anyway.

I'm a small caps specialist, so of course I mainly write about small caps. Hardly a revelation there, is it?

My positions are all long-term, so the short term price movements don't interest me. As stated in my article, my position in Intercede is intended to be held for 1-2 years, depending on newsflow.

Intercede has been a serial disappointer in the past (as pointed out in my article), so this is speculative. The upside hinges on new CEO generating increased sales momentum, which may or may not work, we'll have to wait and see.

Perhaps, rather than pouring out personal bile as your go-to response, you should have (a) actually read my article before falsely slagging it off, and (b) concentrate on the facts & figures, rather than ad hominem attacks.

Your post reminded me why I rarely visit this particular backwater of the internet - it's mainly populated with unpleasant people, posting ill-informed rubbish, and hating on each other.

I see a couple of other trolls have commented, but I've previously blocked them, so have no idea what rubbish they've spewed out, who cares!

Paul Scott.

[runthejoules] 06/7/2018 21:30

As someone on STocko pointed out, PS posted at 11:39.
c £25k worth of buy trades spread over 15 trades.
Approx £24k worth of sells, over 4 trades..

I don't think they were insinuating PS was the seller. He does outline his philosophy on small caps but it's basically ant-elephant and the advantage of research if you have the time to put in. So I should have bought the Paul Scott spike after all! I do watch his buys and some have been a bit ropey recently so didn't follow him in here.

He does seem to hold for longer - for good or bad, than someone like Naked Trader, if it starts to go pear-shaped after initial success. So you might do well buying into the hype but managing your own sells. (Not advice!)

I forgot it was low-volume madness Friday, and that no attention is bad attention on an unloved stock... We'll see if there's more to come Monday but I fear I have missed out...

[topvest] 06/7/2018 15:12

The Paul Scott effect - wow!

[runthejoules] 06/7/2018 15:00

She-ra: no, yes (convertible at a much bigger price) and no.

[she-ra] 06/7/2018 13:59

In his piece does he explain why he buys into blog recommendation sensitive low volume shares where he can make easy money by talking about them?

Does he also mention those convertible bonds which could lead to massive dilution?

Does he explain why he is talking up an inferior company to Trakm8; a company he continually bashes?

[runthejoules] 06/7/2018 13:20

Not buying the Paul Scott spike but will do my research & wait for it to calm down...

[mctmct] 06/7/2018 13:04

Paul Scott has taken a small position in his Stockopedia fantasy fund BMUS. He explains why in today's Small Cap Value Report.

[daz] 07/6/2018 15:54

Agree patience is going to be needed here but the attraction (which I should have mentioned earlier) is that if they can build revenues then because margins are very high, profits will be very geared

[the big fella] 07/6/2018 14:53

Daz - decent post. They are probably worth keeping an eye on, but plenty of better placed investments IMHO.

[daz] 07/6/2018 13:31

I don't think they're beyond hope but there is certainly a significant amount of risk.

On the plus side:
They've cut costs - run rate is 20% lower than this time last year
Support & Maintenance revenue, which is very reliable, as contracts are spread over a number of years has been building steadily to the current £4.4m and will hopefully be around £5m in the current year
Revenues are forecast to rise this year but that will be dependant on the timing of some large contracts.
The need to make things more secure is certainly there and their market ought to grow

On the not so good side
It's not clear whether they have sufficient cash to see them through to profitability but with costs being cut and with the company saying they have £4.7m as of April, it doesn't seem like they will need much extra.
The convertible load notes are well out of the money at the moment and there is a risk that they will be redeemed in cash if the share price doesn't get past the 68.8p conversion price, cash, which the company doesn't have.
Adoption of their technology has been slow, they have a good niche in defence but getting the technology accepted into other industries has been hard.
Contracts are very lumpy

[davidosh] 07/6/2018 11:46

Incidentally Richard Parris will be at our MelloSouth event in Hever next week. He was also on a panel at our Mello2018 event two months ago

[jailbird] 07/6/2018 11:29

Not for me eitheR.

What happened about IOT and MyTAM ..these were supposed to generate large revenues soon

[the big fella] 07/6/2018 11:20

Having read the results there really isn't that much to get excited about. Given the sector they are in they should be making profits not significant loses. As for the outlook statement that was as clear as mud. Perhaps they would like to elaborate why they are so confident they will return to profit with 2 years. Not for me.

[sharesoc] 30/4/2018 13:34

Take a look at our recent blog post which mentions Intercede: Beaufort Administration, Intercede and the Mello Conference

[mdchand] 27/4/2018 09:29

A bit of a bio on him on linkin. Seems to be a results driven manager. hxxps://www.linkedin.com/in/kvanderleest/

[wigwammer] 27/4/2018 09:06

He must have taken £1m of costs out, and removed the whole senior team. Dressing it up for sale?

[yorkiemike] 27/4/2018 08:53

Let’s hope the new CEO is a Klaas act then.

[mdchand] 27/4/2018 08:50

Did she resign or was she asked to resign? I suspect the new CEO wasn't impressed with her track record and obviously feels he can do a better job. Perhaps he can?

[garth] 27/4/2018 08:45

And the exit of the Sales Director sees me unexpectedly back out for now.

G.

[zipstuck] 27/4/2018 08:24

So the Sales director leaves with a big paper loss on last years share purchase ands after what seems to be a successful run of contract wins???

[daz] 26/4/2018 11:37

A raise is highly likely in my view as well. A new CEO will not want to have his hands tied by not having the cash resources to carry out his plan.

The question is really how much do they need? I thought before they could avoid a raise if revenues ramp up as expected but it was tight. So on a positive view they may not need to raise much but if revenues are slower to build, it would be more.

[jailbird] 25/4/2018 22:34

Garth,

My cynical hat says is he boosting the prices for fund raising?.

Not sure if profits are in sight this year

[garth] 25/4/2018 11:54

Mr Pol doubling up his shareholding.