OMG! We find it almost inconceivable that Scots would vote ‘emotionally’ for a profound change that would bring far reaching unknown economic consequences. Markets should improve.

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15th September

…………….Last Week

UK Markets was Shillelaghed by Scottish Referendum concerns; the FTSE 100, at 6806 fell 0.7%, the more domestic focused FTSE 250 was hit by a  harder -1.3% decline. The AIM All Share at 776 was 0.38% lower.  The economic news narrative returned to the good news could have bad outcomes; particularly in the US where better Retail Sales leaves the  poised to raise interest rates.


Next Week ……………..

As an indicator to the timing for the increase in UK interest rates the BOE Minutes reported on Wednesday are of interest but not critical. The vote is currently 2-7 against a raise; will it move to 3:6 etc ? More likely the  interest  increase will  be announced  nearer the election date. Unemployment is also reported on Wednesday. On Tuesday there is Inflation and Thursday Retail Sales which could be disappointing after the cold August.  Globally, US and Europe have on Balance of Trade and Industrial Production.

We were blinded-sided by Scottish concerns after a You Gov Survey put the Yes voters ahead. We find it almost inconceivable that Scots would vote ‘emotionally’ for a profound change that would bring far reaching unknown economic consequences.  Markets should improve.


Pause for Thought    

“ A yes vote would be deeply damaging for the Scottish Economy and therefore living standards”

Sunday Times  



(LSE:SDM)       -solid earnings not reflecting gowth

(LSE:NPT)         -acquisitive growth likely

(LSE:MIRA)      -potentially leaping up the profitability curve

(LSE:ADVFN)    – October finals could trigger a rally

Stadium (LSE;SDM)
Bid/offer spread: 101p/104p

MKT CAP: £32.3m

Next Results: Final March 2015


Electronic products manufacturer Stadium (LSE:SDM) reported good progress with integrating its latest acquisition and directors have been buying since the interims.

Interim revenues declined from £21.4m to £19.8m but underlying profit more than doubled to £900,000. The rationalised outsourced manufacturing division returned to profit on reduced revenues. The interim dividend was increased from 0.45p a share to 0.7p a share. Net debt should be less than £5m at the end of 2014, following a cash outflow for the acquisition of United Wireless.
United provides wireless connectivity technology that can be marketed with the company’s power units, displays and electronic manufacturing expertise. The refocusing on Stadium’s own products rather than manufacturing for others should help to increase the rating of the shares over time.

Chief executive Charles Peppiatt acquired 30,000 shares, taking his stake to 45,000 shares, and finance director Joanne Estell bought 5,500 shares, taking her stake to 15,500 shares. The shares were bought at 100p each, which is more than 50% higher than the share price prior to the United Wireless acquisition. The offer price was 90p when we previously wrote about Stadium.


Forecasts for 2015 profit range from £4.2m to £4.7m. Even at the lower end of the range the shares are trading on ten times prospective 2015 earnings. Given the growth prospects for the enlarged business Stadium remains attractive.
NetPlay (LSE:NPT)

Price 10.75p/11.25p

MKT CAP: £33.3m

Next Results: Finals April 2015

The first half was tough for interactive gaming business NetPlay (LSE:NPT) but there are hints of increased payouts to shareholders.

Net revenues edged up to £14.5m but underlying profit declined from £2.41m to £2.01m because higher marketing spending was required due to greater competition. Rivals appear to be trying to grab market share before the Point of Consumption tax comes in at the end of the year. Management says that the second half has been stronger with third quarter net daily revenues 6% higher, while cost-cutting ahead of the new tax is progressing well. The new website for the Vernons sportsbook should be launched later this year.

Net cash was £12.6m, excluding £1.6m of players’ cash, at the end of June 2014. The interim dividend was increased by 20% to 0.22p and management says that it will assess what to do with its cash. It could be spent on acquisitions but higher dividends, or even a special dividend, appear likely.

House broker N+1 Singer has trimmed its 2014 profit forecast from £4.9m to £4.85m – so more fine tuning than significant downgrade. The shares are trading on eight times prospective 2014 earnings and the prospective yield could be more than 5%.

Non-executive director Andrew Lapping and related parties have acquired 400,000 shares at 10.8625p a share. The offer price was 13p when we previously wrote about NetPlay and it has fallen back since the interims and chief executive Charles Butler’s decision to move to non-executive chairman. NetPlay could use its cash pile to be a consolidator in the market but it could also be snapped up by a rival, particularly with the short-term uncertainty concerning management.


Mirada (LSE:MIRA)

Price 13.5p (13-14)

Mkt Cap: £15.4m

Next Results: Interims December


The Finals announced in August showed that this TV Software company had remained at break-even. The recent presentation at Proactive Investors reminded investors that around £6m has been raised in the last 18months at prices ranging from 9.5p to 12.5p. Mirada creates products for digital TV operators and broadcasters and receives a licence fee per new users of $2 up to $4 – it is the licensing fees that will transform the P&L and the share price. There are valid reasons for tier one operators in Brazil and Mexico (speed@ bespoke) to be using this AIM listed largely Spanish company to supply software for the set top boxes and   programme guides that interact with any digital device.  Mirada have been chasing the implantation of a 5-8m retained user base for a TV company and a date could soon be set. This is worth in licensing fees a minimum of $10m over maybe 2-3 years and the margin on licensing fees is Microsoft proportions. The finals showed break-even and with estimated next cash of £2.5m MIRA can afford to chase contracts  one further win could see the shares break-out of the price range established over recent years .




Price 84p (83-93p)

Mkt Cap: £21.3m

Next Results: Finals Due October


Since May there have already been as many announcements as for the whole of 2013- mostly positive ones with additional services be offered by this online financial service portal to its growing user base.  Revenue at the interims to December of £4.5m were generated from subscriptions to various services, advertising, conferences and book sales.  The online traffic growth since the New Year was reported to be running at 25% higher from the key markets in the UK and the US. The interim loss was £226k but it is worth noting a material improvement cash-flow to £1.5m from £1.1m. There is no structured debt although the working capital ratio of 1.1x is tight.  ADFVN continue to expand the offering globally and while the UK and US are out-shining some of the other markets  Mexico, Japan and the Philippines continue to make progress. As a global foot print these smaller sites add up to an attractive audience for global advertising clients and as such make a material contribution to advertising sales. Around 36% of the shares are relatively tightly held with (LSE:ONL)  holding 18% worth £3.8m while ONL’s market cap is £1.7m after the shares have improved from 14p to 22p, since August. An equity funding to support ADVFNs organic growth is not needed. Although the shares have improved from 73p since early August it seems set go further.

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