$1000 invested in Amazon in its 1997 IPO would recently be worth $239,000 – confidence in IPOs is positive and confidence breeds confidence.
where shares can be bought and sold from as little as £8 a trade. It is an informative share trading website.
Last week …
… after a sharp fall on Wednesday markets recovered to become virtually flat. The FTSE100 at 6693, was a marginal 0.2% lower, the FTSE250 0.6% lower, while the Aim All Share at 808 declined 0.2%. The cause was the BOE’s Inflation Report on Wednesday which reset expectations for a ‘near-term’ raise in Interest Rates. Otherwise the economic news was ‘good’, with (CPI) inflation dropping to 2.2% (2.7%), unemployment fell to 7.6% (7.8%), although Retail Sales fell 0.7%. In the US Jobless figures declined by a slightly lower amount than was anticipated so allowing believe that QE tempering remains a distant event.
This week …
… is ‘lite’ for UK Economic news with the CBI trends survey on Thursday. US Inflation is currently under control at 1.2% and the new figure is reported on Wednesday as well as US Retail Sales. Markets seem set to drift into a flat trend.
RED24 (REDT) – £8.6m at 17.5p
Interims to the end of September reported a 17% increase in turnover to £3.2m with a 12% increase in PBT to £457k. Red24 provide a range of services to large international companies to help individuals and organisations to avoid and manage security risks to themselves and their dependents. The policy can be ‘wrapped’ into other employee/client benefits. Revenue from non-response work grew 3%, security assistance increased 15% and Business Support Revenue grew by 27% In March 2013 the contract with HSBC was extended until 2017 and recently a major client, AIG, renewed their contract for three years until 2016. This allows forward visibility on revenues and increased confidence on the business prospects. From this ‘strong’ niche Red24 are diversifying into building a training business which is reported to be performing ahead of expectations. Profits for the full year to March 2014 are forecast at £0.9m on £6m turnover for an EPS of 1.6p which gives a prospective P/E of 11x while yielding 4.6%. The moderate organic growth is unlikely to be supplemented by acquisitions.
The net cash reduced to £1.8m from £2.1m, as the freehold of the Cape Town Call Centre was purchased. The cash inflow from operations increased to £292k from £92k.
Croma (CSSG) – £2.7m at 18.25p
Finals to June 2013 from this micro-cap, ‘total’ security provider reported 34% growth in revenue to £13.5m, with a gross profit margin of 25%. The Security market is fragmented allowing an opportunity for an integrated supplier of services to clients. The businesses acquired in 2012 are reported to be fully integrated although the opportunities for cross selling products to clients are taking longer than originally anticipated. Croma is aiming to develop products that improve client’s safety and security as well as creating intellectual property. Two such products are a unique technical solution: Fastvein® which is a biometric access control system and a Vehicle Impact Protection System, which are both being aggressively marketed. The PBT to June of £79k, however reflects the investments being made in building the infrastructure to support the Group’s development into a fuller service national security provider while there were delays in the order pipeline. The plan is for organic growth by developing products and intellectual property so as long as they remain profitable this growth is fundable. Directors recently brought shares at higher levels.
The cash generated from operations improved to £392k leaving net cash of £667k and there is no structured long-term debt.