Small Cap Value Report (Thu 5 May 2022) - QXT, RCH, BUMP, TRI, LUCE, SNWS
Good morning, it's Paul amp; Jack with you today.
Agenda -
Paul's section:
Reach (LON:RCH) - A confusing trading update, showing the revenue mix shifting more towards lower margin print revenues, with advertising amp; circulation down. Nothing is said about profitability, but Singers has lowered forecast profit by 6%. Higher paper costs, and lower advertising revenues are the main negatives. Looks very cheap now, might be worth a nibble?
Seraphine (LON:BUMP) - A third profit warning from BUMP, in less than a year of being listed. Putting aside the negative emotional reaction, I think this share is starting to look interesting in valuation terms. The new CFO is experienced, and should be rectifying sloppy financial amp; operational controls. High risk (I think it needs a placing), but possible high reward longer term?
Luceco (LON:LUCE) - I take a look at yesterday's profit warning. Customer stockpiling last year, of high margin products, is unwinding this year. It surprises me that this has taken LUCE by surprise. FY 12/2022 forecast EPS is dropped considerably, by a third. Shares now look quite good value, on more realistic forecasts, assuming no further profit warnings occur, which is a big assumption right now!
Smiths...