Small Cap Value Report (Mon 8 July 2024) - KGH, PLUS, MACF. Movers: CRL, ZIN

Mon 5:59am by Paul Scott

78 comments 7461 reads

Good morning from Paul & Graham!

I updated my SCVR summary spreadsheet over the weekend, and we are now up to 552 unique companies covered here (including brief comments) 2024 YTD.

"Profitable Growth"

This phrase seems to be appearing with greater frequency in trading updates. It strikes me as being vague, and not really telling us much, if anything. Do you share that view, or is it just me over-thinking things, and/or being neurotic? Let's find out! I've set up a quick & simple online poll here. Please don't share this link, as I'm just trying to gauge opinion amongst Stockopedia subscribers. Then I can share the results with the PR/broking community, to give them some feedback. There's also a comment field where you can leave any additional views (up to 100 characters, the max allowed). Just a bit of fun, and if people like this, we can do some more polls!

Tell us your opinion here!

Apologies, the survey is now full, as they start charging after just 25 responses, so I'll have to find some better survey system (I might set up my own on Google Forms, leave that with me for later).

Explanatory notes -

A quick reminder that we don’t recommend any shares. We aim to review trading updates & results of the day and offer our opinions on them as possible candidates for further research if they interest you. Our opinions will sometimes turn out to be right, and sometimes wrong, because it's anybody's guess what direction market sentiment will take & nobody can predict the future with certainty. We are analysing the company fundamentals, not trying to predict market sentiment.

We stick to companies that have issued news on the day, with market caps (usually) between £10m and £1bn. We usually avoid the smallest, and most speculative companies, and also avoid a few specialist sectors (e.g. natural resources, pharma/biotech, investment cos). Although if something is newsworthy and interesting, we'll try to comment on it. Please bear in mind the "list of companies reporting" is precisely that - it's not a to do list. We typically cover c.5 companies per day, with a particular emphasis on under/over expectations updates, and we follow the "most viewed" list of readers, so if you're collectively interested in a company, we'll try to cover it. Obviously with the resources available, we…

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andrewdb

Mon 2:30pm

Court judgement on water company pollution.

I have not noticed this in the newspapers etc. It looks like water companies may be sued for putting sewage in the water.

illiswilgig

Mon 2:35pm

Right now wind power, after £45 billion of investment is giving us 750mw, while nuclear is as usual providing a reliable 4500mw.

Those wind power figures don't look right to me?

https://www.gridwatch.templar....

Currently wind is supplying 8.57GW(29.76%)

Nuclear 4.68GW(16.25%)

The latest available quarterly figures Q1 2024 are

Wind generation 26.1 Twh

Nuclear generation 8.3 Twh (lowest recorded due to outages)

data from https://assets.publishing.serv...

just sayin'....

Mark

rmillaree

Mon 2:40pm

Reeves has also announced an increased investment in wind power as though it was something good. Right now wind power, after £45 billion of investment is giving us 750mw, while nuclear is as usual providing a reliable 4500mw.

where on earth have you got your stats from Aislabie?

facts are in 2023 29.4% of the electricity grid generation came from Wind and 14.2% from Nuclear?

https://www.nationalgrideso.co...

personally i would be surprised if onshore wind power costs more than nuclear now - happy to be convinced otherwise if you can provide a non biased link. Note i would say the net is probably full of bias on both sides ref that debate.

Mon 2:43pm

This comment is under review

DWit199

Mon 2:45pm

How reliable are these "gridwatch" sites?

According to gridwatch.co.uk wind is currently 0.73 GW only 2% not the 29% you are quoting.

Mon 3:03pm

per the link i provided it was 29.4% over the whole year last year - is that not enough proof of the pudding?

JASVFS

Mon 3:16pm

Thanks for the comments from members on MBH, added 5000 before the close at 100p also added 5000 Macfarlane at 121p before the slight rally, we had decent holdings in both companies prior to today, they are at 3rd and 5th (MBH) by value in our portfolio. Also added a few Wynnstay which is number 2 and needs patience.

iwright7

Mon 3:18pm

Beeks Financial Cloud (LON:BKS) have announced a Trading Update this morning for July 22^nd. Last year the TU was 6^th September some 45 days later. Could this be a case of Beeks management being keen to announce further good news? In March they stated....

"With our proven offering and growing tier 1 customer base, which includes some of the largest financial organisations in the world, as well as our increasing profit margins and cash generation, we have never been better placed to seize the opportunity".

The SP is up almost 5% today so its looking promising. I hold

BenHazz

Mon 3:19pm

Does anyone know what has initiated the spike down at Ashtead Technology Holdings (LON:AT.) today. It's clearly been triggered by something at around 3.30pm but I'm not sure what!

Mon 3:20pm

Whooops!

My apologies!

you are quite right. These sites are normally reliable. Not today. There seems to be a data feed problem affecting some data on some or all sites. I should have noticed that! My bad.

That doesn't affect the governments Quarterly update for 2024 Q1

sorry for any confusion caused,

Simon Hilton

Mon 3:22pm

Thanks Aislabie. Maybe I am a bit over cautious at times, but I always recall a few of us at a previous employer had been approached by another company (Quindell) with job offers and they were doing something similar and buying up companies. I didn’t like what I read online and in the accounts, plus odd as it may sound, the salaries were too generous as well. Sadly it didn’t end well and those who jumped ship got made redundant 18 months later when things went belly-up

Mon 3:43pm

is that not enough proof of the pudding?

I'm not disputing the annual average. The issue with wind is that it is intermittent, only contributing about 2% of total demand today. Something else is needed to fill the void. I think this is the point Aislabie is making.

Samsgrandad

Mon 4:39pm

Apropos my post about Gordon "Robber" Brown's stealing from pension funds, coincidentally this article was on the Telegraph site. Lists manifesto pledges versus reality for Bliar and Brown. It's unlocked and archived here.

Mon 4:40pm

all energy generation is intermittent thats the nature of the beast - obviously wind is more variable than most other stuff but we are managing ok with wind already at 1/3 of the mix most of the doom and gloom mongers would have said that was impossible 10 years ago. we have hardly started on battery investment (battey and wind is a pefect combo) we have made zero investment in tidal little investment in hydro and need to invest more in ability to transmit between the countries. the falacy that we need 2 coal power station on standby for every 1 wind equivalent is just that nonsense.

Abel

Mon 7:01pm

Hi Paul, thanks for Macfarlane’s short section

ACounsell

Mon 7:07pm

I find this site useful and generally accurate regarding electricity generation. I believe the data is sourced directly from the National Grid https://grid.iamkate.com/

Aislabie

Mon 8:29pm

The problem is not that we cannot manage it is that this management is gruesomely uneconomic - before we even discuss batteries which do nothing at all to lower energy costs.

Despite the bleating, the Government takes over an economy with historically modest and declining inflation, full employment (for those able and willing to work) and a government debt pattern that, while higher than historically experienced, is well managed to long dated maturities. So what is wrong? The cost of energy; which affects everything we do and which is kept artificially high to “manage” the wildly ineffective £45 billion investment (so far)in wind power and thus put both our government and industrial costs at uncompetitive levels. Tidal power (see Simec ) is hopeless even when applied to the Pentland Firth, which is about as good as it gets for favourable conditions. To give our economy the shove it needs to afford all the aspirational spending this government wants, requires us to lower energy costs. The carbon footprint has been declining mainly because of the move to gas and we should be seeking to build our own gas and oil over the decade or so while every other pound gets put into replacing it with a reliable nuclear base for increased electrical usage. The biomass number seems to be largely based on clear cutting South Carolina for Drax and this should also be stopped as soon as possible. We need to get a position in the mid 2030s where our fossil fuel needs starts to drop fast, this is affordable and realistic and (will coincide with the expensive and necessary decommissioning of masses of uneconomic wind farms).

With enough electricity electrolysis should allow cheap hydrogen production for fuelling the gas turbines for handling peak loads above the nuclear base.

Mon 9:05pm

You do raise some valid points Aislabie agree gas if the cheapest is then most obvious practical stopgap solution - should our government have gone so gung ho on freebies for renewable providers probably not. I am trying to be balanced here and you seem to ignore the fact seems clear to me offshore wind prices are coming down and onshore is surely cheaper than nuclear and we are so far of getting any new nuclear up and running at reasonable costs perhaps its best left on the drawing board - perhaps Tidal power via the severn eastuary may not turn out viable . I for one though feel we have made some decent progress to be where we are and to me the future is brigght with options - renewable do all need to stand on their own to feet though so i for one am happy if future subsidies will be be cut back. It appears to me that the stupidity of the government more than anything has caused some of the high energy prices we have - eg by locking in fixed prices at the peak a couple of years back and not boxing clever to ensure we are not having our eyes gouged out by excessive profiteering - and not plannig for more gas storage Must admit i have none of the answers - i only came on here to back up the real i am fact that wind did generate 29% of our electric last year however much you diss it with suggestions that nuclear provides more when that is clearly not the case.

Rusty2

1:50am

You replied to the wrong person then.

peterg

9:12am

You imply 750MW of wind generation costs arounf £45bn, i.e. around £60m per MW. Those figures are nonsense. A modern wind turbine costs around £1m per MW, less if you go bigger as is increasingly the case.

I'm not totally against nuclear, it has a role, for now at least, in being able to provide consistent power generation, but our powe for some time to come (decades?) is going to come from a mix of HCs, nuclear and sustainable (such as wind, solar and possibly tide). But it's no at the moment an either or, and as is crystal clear the costs of solar and wind generation have fall, and continue to fall, continually. Perhaps modular nuclear will cut costs there, but up till now massive cost overruns has been the norm. Storage will reduce in cost too, but we don't need to, and certainly won't, plan a power system that is based on 100% wind backed entirely by storage.

Small Cap Value Report (Mon 8 July 2024) - KGH, PLUS, MACF. Movers: CRL, ZIN

"Profitable Growth"

Tell us your opinion here!

Explanatory notes -

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Paul Scott

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