Scholium Share Discussion Threads

[cjohn] 27/4/2016 10:06

Hi Huge Pants,

OK, technically SCHO IS a net-net, but as you're aware, inventory is the lion's share of "current" assets at 7.42m at the half year. Well, given that yearly turnover is likely to be around only 6m, it's a real stretch to regard this inventory as highly current.

Or put it another way, the quality of the current assets is far from cash-like. (And Hammers of course is quite right: there'd have to be heavy discounting in any fire sale to shift so much inventory in short order.)

[battlebus2] 22/4/2016 17:29

Lol more than today's market cap.

[hammers976] 22/4/2016 17:19

Any idea on the value of this business's inventory in a fire sale? What would be a realistic but conservative haircut to book value?

[hugepants] 22/4/2016 14:01

Well this mutt has net working capital of 72p per share so trading at a huge discount. A bit harsh for a company that returned to profit in H1.

You're right on the trading update. They've released one each of the last 2 years in late April.

[battlebus2] 22/4/2016 10:17

Continuing to rise off lows, it's possible we may have a trading update next week if last year is anything to go by.

[battlebus2] 31/3/2016 14:10

Looks like we maybe bouncing of the bottom, results probably this month...

[hugepants] 23/2/2016 20:25

Yep the share price would suggest this company is heavily loss-making but its eked out an H1 profit. If things continue to improve in H2 I think the shares will rerate closer to NAV.

[battlebus2] 03/2/2016 16:05

Still like this stock and will add to my holding. House broker also likes them as an asset play which is no bad thing in current markets imv...


Scholium is a unique alternative asset play focusing on the rare and collectible
books market. After a difficult period since joining AIM nearly two years ago, we
think 2016 will be a much better year for the shares and the current valuation of just
over half net asset value makes them an attractive value play. Scholium also has
scope for M&A in our view, building on its quoted status and with many
opportunities in a fragmented collectibles market ripe for consolidation. This would
be the icing on the cake. Scholium should offer value and excitement in 2016. Buy.
· Interim results showed a rebound in performance December’s interim results
showed impressive revenue growth (+38%) and a return to profit, quite an
achievement given the dearth of Russian and Eastern European buyers over the past
twelve months. This performance was due in part to diversification into other stock
areas as well as the careful management of costs. Scholium Trading, in particular, is
starting to generate the returns envisaged with a £463k H1 revenue contribution
versus virtually nil last time.
· Change to stock mix is paying off The Rare Books business of Shapero Books has
deliberately shifted its stock focus to more resilient sectors reflecting the change in
market conditions and away from Russia / Eastern Europe. Whilst this proved a
successful exercise, it did lead to some sales at slightly lower margins with an overall
gross margin of 33.3% versus 36.6% for the whole of last year. In addition, Shapero
Modern selling modern art prints made a meaningful contribution to H1 revenue of
£235k.
· Strong balance sheet, Scholium is a value play Scholium’s balance sheet
comprises mainly cash (£1.6m) and inventory (£7.3m), these two items alone
accounting for around 50% more than Scholium’s current market cap. The net asset
value per share of 74.7p at the half-way stage can be expected to improve moving
forward as Scholium’s profitability kicks on thus making the shares an attractive asset
play. This is our primary valuation metric: even applying a conservative 20% discount
to factor in any stock risk suggests fair value of 60p per share.
· With the business back in profit, 2016 should be a much better year For most of
2015, Scholium traded at a sizeable discount to its NAV. Now that profitability has
been restored, there is scope for this discount to narrow substantially whilst the
prospect of a dividend in due course would increase the shares’ attractions to a wider
range of investor. Scholium is one to watch in 2016.

[hugepants] 09/12/2015 07:24

Profit of £6K versus a loss of £215K during same period last year.
Certainly looks good value given the asset backing. They raised £8M at 100p last year.

[boycie1] 09/12/2015 07:17

any holders out there,anyone care to comment?

for a company with a market cap of 5m,this don't look too shabby..

December 09, 2015 02:00 ET (07:00 GMT)

The group remains very well capitalised. On 30 September 2015 the Group had a strong balance sheet with cash balances of GBP1.62 million (30 September 2014: GBP2.63 million) and stock of GBP7.4 million (30 September 2014: GBP6.5 million). These supported Net Assets of GBP10.2 million (30 September 2014: GBP10.5 million). The Group had no debt but has a GBP0.5 million facility with Coutts.

Outlook

The international political instability of the last twelve months which impacted a number of established customers created a challenge for the management team, but we are delighted that they have responded admirably and managed to reposition stock, increase revenue and gross profits, reduce the cost base and return the business to operational profitability. The performance of the business over the first six months and the start of the second half is encouraging and we look forward to the prospects of the second half of the year.

[hugepants] 08/12/2015 11:00

results tomorrow

[hugepants] 26/11/2015 10:29

Decent article here from last year on the IPO.

[hugepants] 19/11/2015 08:59

Are there any other listed companies in a similar business to SCHO to compare? ie the rare collectibles business.

Avarae (AVR) is probably one. Rare coins company released results this morning. They posted a small loss and valued at 20% discount to NAV. The NAV is basically the net value of the inventory, similar to SCHO.

SCHO looks way undervalued if they have returned to profit and maintain dividend. Should be nearer 60p IMO.

[battlebus2] 18/11/2015 07:22

Results date announced as December 9th.......

[battlebus2] 17/11/2015 15:29

40p looks like the base, a few buys lucky enough to get them at that price before the tick up.

[androyd] 11/11/2015 12:21

Results due early December, 3-4 weeks.

[boycie1] 11/11/2015 11:25

if it slides to 30p it kind of defeats the purpose of holding for results!

There's hardly any volume just short term traders probably selling for a loss...

[battlebus2] 11/11/2015 10:11

Yep just a little patience, don't see us sliding any further especially not to 30p but dyor etc.....

[traidemark] 11/11/2015 09:47

Still here. Seen this before ! True value is only presumed but with 6 weeks approx until results we could well slide lower. Plenty of support at 30p however.

[battlebus2] 04/11/2015 16:20

Yes still here... there is no catch or any guarantee the market will rate the shares at NAV or near until we see the next results, reassurance is the word i'm looking for so just being patient until the end of December.

[boycie1] 04/11/2015 14:41

so NAV of 73p but trading at 45p.

What's the catch???

is anyone still there!

[traidemark] 29/10/2015 16:58

Tick up at the close. This moves on very light volume.

[battlebus2] 28/10/2015 18:32

Good to see you here playful..

[playful] 28/10/2015 17:16

If we don't see this above 60p before Christmas I'd be surprised

[battlebus2] 28/10/2015 13:57

Yes good to see, a long way to go to get anywhere near that NAV of 73p.