Small Cap Value Report (Friday 5 July 2024) - SPA Brief: SIS

5th Jul by Paul Scott

47 comments 7043 reads

Good morning from Paul!

Practically nothing on the newswire today. So today's

Labour landslide

Is now fact rather than forecast. This is not the place for discussions on politics itself. So please can we stick to how the election might affect the economy, markets, and companies/sectors.

Futures on IG are currently showing (at 06:23) little to no change (FTSE 100 up 17 points, sterling flat at £1 = $1.276), because markets already price in high likelihood events in advance. It's only big surprises that send markets haywire - who can forget the Brexit vote, when equities and forex markets went absolutely haywire - I can vividly remember that - even some FTSE 100 stocks collapsing, and (briefly) there were no buy orders on the books at all for some mid and large caps (so technically a bid price of zero!) - that's the danger of stop losses when something big and unexpected happens - fortunes were made and lost that day by geared traders.

FWIW I won't be making any adjustments to my portfolio, because I don't see that much is likely to change any time soon. The general drift is likely to be similar to 1997 I reckon - lots of new stealth taxes, but probably no big changes to the main taxes (if Labour stick to their pledges). I know a lot of affluent/rich friends are worried about potential tax raids on CGT, Inheritance Tax, etc. One has even emigrated to a tax haven! Will AIM IHT relief survive? Will pensions be raided? I was very worried about the Lifetime Allowance being re-introduced, so I wrote to Rachel Reeves explaining why that would be a mistake, and that proposal was dropped. Maybe not cause & effect there with my letter, but hopefully my voice added to others saying the same thing? It's always worth writing to people in positions of power, because apparently for every 200 people who agree on an issue, only 1 actually writes a letter. Also I like sending a physical letter because they probably receive very few (with people preferring emails, which are more easily ignored). The same is true of writing to company Directors - a physical letter will stand out, and will probably be read by the Chairman/CEO, whereas an email is less likely to reach them directly.

What comes next on Govt spending? Well, more public spending, but…

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Traditionally Celebrus partners with major SaaS providers eg Adobe, Teradata etc to major global clients eg Bank of America, Quantas, HSBC, BNP Paribas. They how have a cloud based platform which allows them to offer directly to customers - eg with a Salesforce API or custom interface.

Customers are very sticky. Which is great for ARR when you have them. Not so great when you want to acquire them? As third party cookies are removed the private cloud based Celebrus platform allows first party data capture - an unique opportunity for Celebrus to acquire customers that otherwise would not be keen to change. Customer acquisitions will likely start small - the cloud based platform allows rapid scaling of customer use - the 'land and expand' strategy.

Like others I recommend the recent capital markets day, on IMC, or here on Youtube

stockorocko

5th Jul

yes I did thank you. I was also very impressed with the CEO's interview with Fintech Times last November. Seems like 2019 was their best year - be interested to see if they are headed back to that...

Fire Juggler

Interesting to see Kier (LON:KIE) up 7% when Keir enters No.10. ..

Apparently no such thing as bad publicity. Is Mr Market really that crazy?

sjones33449

Thanks ever so much only saw Paul’s brief comments

yadi

Irish shares

Don’t know about dividend tax but the stamp duties is 1% instead of 0.5% for UK shares. I think Aim shares have no stamp duties.

Lefty99

Excellent Paul, I really enjoy listening to Iain.

And the Greens from the middle!

illiswilgig

Celebrus Technologies (LON:CLBS) Hello stockorocko - yes, I hold in my 13 company UK small cap portfolio.

Seems a lot of investors find it hard to assess what Celebrus does?

Not surprising - it's what used to be referred to as CDM (customer data management) though that's now frowned upon as outdated terminology. These days it's an SaaS platform that plugs into a corporate software stack (website plus backend) and enables sales, marketing and fraud departments to better understand their customers needs during (live-time) and across sessions. In the companies own words '

&t=4521s

The video includes a demonstration of some of the software modules by the CTO and at around 1 hr 24 mins a presentation by a Merkle executive (global marketing and sales consultancy) on why they choose Celebrus Technologies (LON:CLBS) platform for their customers - which I think is helpful in understanding what the Celebrus platform does for its customers.

The trading update in March was issued a couple of weeks prior to the year end - hence the revenue figure gives an 'above' and the profit and cashflow are 'in the region of' - as it would not be possible to be accurate prior to the year end?

I'm keen to see the results - but not too fussed on the actual figures for revenue and profit as the 'in-line' represents an increase of 50% in revenues and 67% in profits over the prior year with confirmation in the TU that ARR is up 20%.

I'm primarily interested in the commentary on their 'land and expand' approach using the cloud based platform and any more colour that they can give on the outlook for the current year. I often find its important to watch the presentation Q&A to help read between the lines on the outlook? As its this that will dertermine whether Celebrus Technologies (LON:CLBS) proves to be a quality company with sticky customers but lacking scale - or a company that can scale its operations rapidly with the share price upside coming from growing profits though operating leverage and re-rating on increasing margins. Time will tell?

cheers

Mark

rogerh

Stocko is sometimes incorrect with earnings release dates. I checked with Cavendish Financial (LON:CAV) directly and, after multiple attempts, heard back from the Head of Broking that the results date had not yet been announced to the market. So it could be July 11th, then again, it may not be. I am also hopeful for an upturn in their share price, given the slowly improving market sentiment and cash on their balance sheet compared with market cap.

Mark L.

The main thing about the election is we have the prospect of a stable government for the next 5 years. So much better than numerous other western countries at the moment. (France, USA etc etc)

I don't suppose Rachel Reeves remotely wants to shock the markets in tribute to Liz Truss! So expect a few stealth taxes and in a way quite a boring initial few years. At least until the super majority of Labour backbenchers get restive with limited economic and welfare changes.

The thing to watch out for are under-the-radar changes which have longer termm effects. I'm thinking of Gordon Brown's 1997 (or was it 1998?) abolition of the Advance Corporation tax/ dividend tax credit regime. This change was accelerated the decline of a natural UK demand for home based equities, and 25 years later the London Stock exchange lacks the range and quality of shares it once offered.

Trident

What gets me is that pundits blame politicians (some justly, some not) but the electorate (their viewers) is treated as deeply wise.

cafcash49

Can anyone help me. There is a regular investor and sometimes contributor on here who has written an e Novel about Investors. He has very kindly said he is donating some or all profits to Pauls favourite charity Zane. Thanks to Paul I am now a trustee of Zane. I would like to make contact with this person and know who he is. If he reads this will he contact me at charles (at) woodlandswitney.co.uk (if I use the normal at symbol it doesn't work properly on here) I hope someone can help. Thanks in anticipation.

sevenccc

Yes Alphafight

In preparation for the continuing abuse and waste of our North Sea assets I recently pulled the plug on my last North Sea involvement in Serica Energy (LON:SQZ) and Jersey Oil and Gas (LON:JOG). Ha e opted for Arrow Exploration (LON:AXL) and Petrotal (LON:PTAL) instead.

Also watching the rapidly developing exploration play offshore Namibia and South Africa. There are still some places that like the value extractive industries can add to their National Wealth and job creation. Galp Energia SGPS SA (ELI:GALP) and Africa Oil (TSE:AOI) of particular interest.

Why bother waiting and wishing and hoping for an outbreak of common sense in the new world wokery order ?

shopping365

I don’t know his user name on here but the author is Andy Vaughan and the book was entitled Pigs get slaughtered. He also did a chat with David Stredder on Mello Monday on 13th May, so he may be able to provide contact details.

davidallen77

thanks for that axl and ptal look interesting

John LA

It will be interesting to see how Namibia finds fare deepwater and far from shore?

Monty Carlo

Funnily enough I bought some more the other day. Kier (LON:KIE) being one of the major contracting survivors (by the skin of their teeth) who should be a beneficiary of any increase in infrastructure/construction spending.

For the investment rationale, it is worth taking a look through postings by contributor yiannos1 (no point me reinventing the wheel).

nevilleaustin

I thoroughly enjoy all of your fund manager interviews and with Paul Scott and Richard Crow etc, please keep them coming

Gnome2

6th Jul

cafcash, that's me. I'll drop you a line.

Lincoln Green Imp

I recently bought the 'Pigs Get Slaughtered' paperback and found it very good. It was nice having small chapters, easier to leave it at the end of a chapter. A well thought out book.

Small Cap Value Report (Friday 5 July 2024) - SPA Brief: SIS

Labour landslide

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Paul Scott

47 comments

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