Small Caps Live Weekly Summary

CAM CPH2 CRPR CYAN HUD IGR ING SHEP YNGA

Here’s a selection of what we looked at this week:

Camellia (CAM.L) - Final Results

The company has long traded at a large discount to net assets, often below cash + liquid assets, and recently quite close to cash. Especially after some were disappointed by the size of the buyback, any kind of cash distribution is therefore positive news:

The Directors have proposed a final ordinary dividend of 260p…comfortable to recommend restarting the dividend with confidence that this is sustainable.

They also give a deadline for an update on the operational review:

a Value Enhancement Plan covering the medium term will be announced in May 2025, outlining actions to improve operating results, growth areas and capital allocation priorities

Nonetheless, there is little confidence they can turn a profit over the next few years, not even from their broker.

Clean Power Hydrogen (CPH2.L) / James Cropper (CRPR.L)

The hydrogen bubble continues its multi-year squeaky pop, with final-year results from CPH who completed yet another rescue fundraising in December:

Year-end cash and term deposits of £0.3m (2023: £8.5m). Post-year end the Company successfully completed an equity fundraise, generating net proceeds of £5.7m.

After “insane in the membrane” highs in 2017-2022, James Cropper touched fresh 15 years lows, with concerns likely to centre around debt covenants and the pension deficit.

Commercial viability for these technologies seems as far away as ever.

Cyanconnode (CYAN.L) - Profits Warning

It took until the third paragraph and 28 days after the year end before the smart-meter supplier admitted that 70% of their revenues had been expected in March and “did not materialise”.

Commentators on SCL were less than impressed. The majority felt they must have known about the miss earlier, the alternative view being that they might have been waiting to see if they could fiddle the revenue recognition.

Huddled (HUD.L) - Trading Update

Although this had been trailed in advance, the fall in revenue in their largest business was unimpressive:

Discount Dragon revenue was down to £2.5m, an 18.5% decrease from Q4 2024 due to strategic stock clearance in January sale...

Lower prices leading to lower revenue is the very definition of inelastic demand, which doesn't seem an ideal property for a discount clearance retailer. Apparently they would have been better off throwing away some of the goods and selling the rest at their normal price!

Valuation seems high here, especially unless/until operational issues are resolved and scale is gained.

IG Design (IGR.L) - Exit from the US

Although a final decision hasn’t been reached, the consensus on SCL was that the writing is on the wall for DG Americas and that this is a positive thing for shareholders:

…tariffs have the potential to have a significant adverse effect on the DG Americas performance going forward.

This has compelled management to widen the range of strategic options…

The swing in the share price was significant, from down 6% to up 15% as the market came around to our view.

Ingenta (ING.L) - Final Results

An unconventional definition of ARR and a lack of interest received on their claimed cash pile confuses what appears to be either a deep value or GAERP (growth at an exceptionally reasonable price) story depending on your perspective.

However, the outlook does appear to be positive:

Current Trading
· Ongoing implementations on track, with a further Ingenta Content go live in Q1 2025.
· New Belgian customer contract win for Ingenta Content in January 2025.
· Significant pipeline of opportunities for Ingenta Commercial consultancy work in 2025.
· Trading in line with expectations with our focus on delivering sales growth.

Shepherd Neame (SHEP.L) / Young & Co’s Brewery (YNGA.L)

Shepherd Neame, the Kent and London focused integrated pub group’s share price hit likely 15+ year lows (Aquis data only goes back to 2012) despite the best asset backing in the business. In contrast their peers have recovered well from recent valuation lows.

Young’s positive recent trading was received well by the market:

in the 13-week period ending 31 March, like-for like sales were up 7.7%

While Shep offers an excellent shareholder discount scheme, there was optimism that Young’s AGMs would be enjoyable.

Both groups are likely to have benefited from the recent good weather, and on this note we wish you a great weekend and hope the sun lasts where you are!