UK INVESTOR MONEY // SHARES // INTERVIEWS
ISSUE 20 // MARCH 2017
WHY WE FIGHT
Plus
SEVEN NEW TIPS INTERVIEW WITH RICHARD POULDEN BETTING ON THE BANKS FAKE NEWS IS THE LATEST NEWS UK Investor Magazine — 1 — March 2017
Intro
From The Editor INSIDE 3 Attend the UK Investor Show Tom Winnifrith 5 Three resources shares to buy for February Gary Newman 7 Jon Snow and fake news Tom Winnifrith 8 What a pile of bankers Chris Bailey 9 Company profile: K3 Group Steve Moore 10 Why do we fight fraud? Tom Winnifrith 12 Beware Madame LePen Tom Winnifrith 13 Interview with Richard Poulden of PGCE Tom Winnifrith 15 Three stocks to sell Tom Winnifrith 17 The House View
CONTACT US UK Investor Magazine 91 - 95 Clerkenwell Road London, EC1R 5BX E: info@ukinvestorshow.com W: www.UKInvestorShow.com EDITORIAL Tom Winnifrith Editor
It is only March 6th and already the UK Investor Show magazine is out. Given how we pride ourselves on our tardiness this may be a bit of a shock to you all. But the team are now in fifth gear in the lead up to UK Investor Show on April 1. And it is now sure to be an absolute humdinger. With four weeks to go we have now booked in 119 of the 121 companies with booths and presenting. The line-up will complete next week. We see that other me too shows, owned by an asset stripper, have barely a third of that number of companies attending. Under Nigel Wray’s ownership UK Investor Show is now THE leading one day shares event by a country mile. As you can see on page three more than 85% of the 3000 tickets have now been allocated. Every year we get pathetic calls in the last few days from folks asking why they cannot buy tickets any more? It is because this event is always fully booked well before then. And this year, for the Nigel Wray 15th birthday party show that is more true than ever. We have 25 of the last tickets to hand out with this issue - details are on page three - book now to make sure you are at the party! The editorial team are again in the midst of some cotroversy. We appear to have got a major “takedown” with the AIM fraud of the year, Cloudtag, seeing its shares suspended as the Nomad quit. That is yet another big win in our fight against fraud, see HERE. That fight has seen us get three lawyers letters so far this year with the wife of charlatant Darren Winters - who we have also exposed - telling a Judge she would supply a fourth. Natch’ she has not and will not. She must surely be sick of losing to us in Court by now! But Aidan Earley of Worthington infamy, a man with the most appalling reputation for naughtiness, has stated that he will shut us down with a series of legal claims and has launched his first action, claiming damages of £50,000. It is a spurious claim and we will fight him as we fight all the other shysters. We fight hard inded and Aidan will regret making this claim. On page 10 we describe what drives our fight against corporate wrongdoing. And of course there are the usual features in the magazine, seven shares to buy or sell, another dose of Trump and a Q&A with Richard Poulden, the saviour of PCGE on AIM. Plus there is Chris Bailey on the banks, Donald Trump & Marine Le Pen and much more. We hope you enjoy this issue. Now ....turn to page three and book your seat to UK Investor Show on April 1 2017 in Westminster. Best wishes Tom Winnifrith Editor
UK Investor Magazine — 2 — March 2017
UK Investor 87% sold out for the 15th Birthday show on April 1 - grab your free seat today By Tom Winnifrith
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s I write UK Investor is just under four weeks away. The nation’s leading one day investor show is almost upon us. April 1 ( no kidding) looms and, as of this morning 87% of the 3000 tickets have been allocated and they will go fast. So to ensure you have a seat book today. WE have 25 complimentary tickets to hand out to our readers. But why book? We had one more reason to book announced this weekend. For the first - and I hope last - time ever I shall record a Bearcast with a co-host, that is to say the UK’s top share blogger Paul Scott. We will record live at the show and to see us in action you know where to go. And there will be audience participation! It will be a hoot. We have 25 free tickets to hand out to readers today. Just go to www.UKInvestorShow.com/tickets and use the promotional code MARMAG and we will send you a ticket to the event this week. So book now as there are fewer than 13% of the 3,000 tickets left! Here are the more than 150 reasons why: • 121 stands. These are not filled with rubbish companies from Nasdaq or which cannot even gain a listing on AIM. These are nearly all high quality AIM or main market PLCs with stands manned at CEO level who want to talk to you. Think Sirrius Minerals, Optibiotix, Alliance Pharma, Kefi Minerals, Premaitha, ICAP, Big Sofa, Metal Tiger, Rare Earth Minerals and the list goes on an on. Most of the PLCs will also be doing a 20 minute presentation on the day. • 17 big name speakers on the main stage: Nigel Wray himself with Paul Scott and the UK’s oldest find manager Paul Mumford, gold gurus Dom Frisby, Ross Norman of Sharps Pixley and Peter Hambro, me, Steve Moore & Gary Newman, tech queen Vin Murria, by video Mark Slater, Evil, Lu-
cian Miers, Gabiel Grego the Globo Destroyer and more. • 2 golden share tips. Nigel Wray and I will give £5,000 and £3,000 respectively to Woodlarks and that cash will be invested in two shares, the ones Britain’s Buffett and I reckon are the best bets in London. You have to be at the show to find out what these shares are. • 5 Dragon’s Den Sessions Nigel, Gary Newman, Steve Moore and I are the Dragons and in each session we will each invest £1,000 of real money in one of the five companies doing a 1 minute pitch. • 2 breakout sessions chaired by Big Dave Lenigas - one on UK onshore oil and one on making money in Africa. • 1 gift worth £18 for each delegate attending • 3 chances to win £150 in a free quiz organised by FairFX • 1 whole day of free giveaways at the stand of Chapel Down, the maker of the UK’s best wines and finest lager, Curious Brew. That is 154 in total (155 if you include my battle with Paul) . I could have gone on. There is a free draw with a chance to win a 2 week stay at the Greek Hovel my wife owns which will be a palace when rebuilt by summer 2018, and many other prizes, some of which you can drink!. It is a day when you will get great share tips and short calls, learn from real master investors, meet CEOs in a way you can do nowhere else and above all have fun. We have 25 free tickets to hand out to readers today. Just go to www.UKInvestorShow.com/tickets and use the promotional code MARMAG and we will send you a ticket to the event this week. So book now as there are fewer than 13% of the 3,000 tickets left!
UK Investor Magazine — 3 — March 2017
UK Investor Magazine — 4 — March 2017
Three resource shares to buy for March Writes Gary Newman
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y focus amongst the resource stocks has recently shifted back to oil and gas, following a fantastic run on many of the mining companies. Although many metals are still performing well, I think there will be dips that will offer a chance to buy into some of the recent top performers at lower share prices, and we also need to take into account that part of the strong performance amongst resource companies has been down to currency, and not just the commodity price itself. A weak Pound has meant that those companies which sell products (in this case natural resources) in US Dollars have benefitted, but personally I don’t see the Pound going much lower, if at all, and view the sharp drop during the latter part of 2016 as more of a one-off event. In percentage terms, oil was the hardest hit commodity and although it has recovered fairly well it is still a long way off of the levels that we saw prior to the crash in price, and it also looks to have been consolidating well in the $50-60 range, with some strong bounces on any pullbacks. It is just a case of finding those companies which still offer value and have yet to really recover. As a longer term potential recovery play it is hard to ignore Premier Oil (PMO), and although it has had more than its fair share of problems, caused by eye-watering levels of debt, it looks on the verge of a turnaround. There is still some risk attached to the recently announced re-financing package as it still needs the approval of the lenders, but given how long it has taken to put in place, and the fact that the previous covenant breaches and deferred stress tests haven’t caused the lenders to force the issue, I see a high chance of it all going through as planned. With the pressure off, at least for a few years, that will leave the company to focus on the operational side of the business, and production has been growing steadily. It currently stands at 79,000boepd – well ahead of guidance of 75,000boepd – and will significantly increase during the latter part of 2017 as soon as the Catcher project comes online. The level of debt will put many people off of
investing in Premier, but it wouldn’t be producing the amounts of oil that it currently is had it not spent that on developing projects, as well as on exploration. It was just a bit unlucky that the crash in oil price came when it did, as without that it wouldn’t have got into difficulty. In the shorter term the share price is likely to continue to be volatile and that will offer trading opportunities, but I also view the company as a longer term buy and in years to come the current market cap of £350 million or so, and a share price of just under 70p, could well look very cheap indeed. If you’re looking for a bit more of a long shot with exploration potential, then former darling of AIM Chariot Oil and Gas (CHAR) is well worth a look. The company has done a reasonable job of preserving its cash and ended 2016 with around $25 million in the bank, more than enough to cover its current licence commitments, and with plenty to look forward to operationally in the next 18 months or so. It has been busy acquiring and interpreting 3D seismic data across a number of blocks, including Mohammedia in Morocco, Central Blocks in Namibia, and the four Bar-M prospects in Brazil. The company successfully completed the farmout of the Rabat Deep block in Morocco to Eni, and retains 10% with a funded well set to be drilled on the JP-1 prospect during the middle part of the year, targeting gross prospective resources of 768mmbbls. A knock-on affect on any success at JP-1 will be the de-risking of the neighbouring Mohammedia permits, in which Chariot has a 75% operated interest. It is currently looking for a well partnership and is hoping to drill two wells – LKP-1a and Kenitra-A – in the latter part of 2018 going into 2019, targeting gross mean prospective resources totalling more than 800mmbbls. Namibia hasn’t been kind to the company in the past and was largely responsible for the share price
UK Investor Magazine — 5 — March 2017
collapse following failed drills, but it looks set to try again and this time 8.1tcf gross mean prospective resources of gas is the target in the Southern Blocks, where a farm-out process is already under way and the data room is open. Obviously risking money on exploration drills is very risky and the potential for the share price crashing as a result of any failure is high, but if any one of these drills (or further down the line the Brazil licence) finds commercial hydrocarbons then it will be transformational for the company. Given the amounts of oil and gas being targeted, and taking into account other recent successes for other companies operating in Morocco in particular, then a market cap of around £26 million and a share price of 10p would seem to offer value. Finally, my attention turns to a company which I’ve followed closely for several years but which has failed to live up to expectations in dramatic fashion, that being Turkish outfit Genel Energy (GENL). Anyone who has invested in this Kurdistan oil producer for any length of time will currently be well underwater, but with a market cap of just
£225 million or so I believe it is pretty much being priced to fail, given the upside potential based on its assets. Its Taq Taq and Tawke fields have been averaging 53,300bopd, and with 429 million barrels of 2P (proven and probable) reserves, the low share price of around 82p currently is largely down to payment problems with the Kurdistan government as well as geo-political risk. Payments have been fairly steady, with over $200 million coming in during 2016, including some for money owed for historical oil sales, and at the end of 2016 the company had over $400 million in unrestricted cash balances and net debt of just $240 million. It has also recently announced newly agreed production sharing contracts for the Miran and Bina Bawi gas projects, which have massive reserves and potential, and Genel is now able to begin the process of developing these low cost onshore licences. This isn’t a company for widows and orphans, but given the level of production plus the proven reserves already in place, I think it certainly offers far more value than most of the explorers that are yet to produce a single barrel of oil.
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newsletters.advfn.com/tomwinnifrith UK Investor Magazine — 6 — March 2017
Jon Snow of Channel 4 fake News bleats about Donald Trump exclusion but why not? Writes Tom Winnifrith
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on Snow the uber liberal presenter of Channel 4 Fake News took to twitter last night bleating about how his channel was being denied access - along with others - from White House press briefings. I pointed out why this was fair on the part of the new administration. But do so again in more than 140 characters. Snow regards this ban as an attack on the free press. But why the hell should Trump pander to a new outlet which specialises in fake news about POTUS. I cite below a slam dunk and vile fake news C4 special from the last campaign.
This was only one of many fake news stories run by Kylie or her nauseating colleague little Matt Frei during the campaign. If C4 is content to slur Mr Trump by inventing things he said why does it need to attend press conferences? Surely it can just carry on making things up as it goes along. Kylie can just watch the
I think Snow means working on it. C4’s Washington reporter Kylie Morris ventured outside of the Beltway and went to a retirement village which was red hot for The Donald. In her report - which I exposed in full at the time - she described the retirement village where old folks have “found the American dream he is promising: its predominantly white and predominantly conservative” Donald Trump at no point in the campaign or in his life promised a dream for America that is predominantly white. Kylie and C4 put words in his mouth which were racist and that is fake news. Does Snow not realise how serious this is? And does he not accept that such slanderous fake news may have consequences? The awful thing is that this was not a one off slip by a rogue reporter.
press conferences on Fox News from her luxury apartment and then report back to the UK with some more made up quotes bearing no reality to what she has actually seen. That is how fake news works on C4. Donald Trump is not assaulting a free press in denying folks like Kylie access to press briefings. She and C4 are free to report whatever they want. But in giving a seat in the briefing room to organisations that like to report what is actually said rather than just make things up to suit their own agenda what is Trump doing that is so bad? Jon Snow can bleat all he likes,but until C4 starts to report real news rather than fake news when it comes to US politics why does the sanctimonious old fool expect to be treated any differently?
This article first appeared on www.TomWinnifrith.com UK Investor Magazine — 7 — March 2017
FINANCIAL ORBIT Chris Bailey Banks earnings fest: what a pile of… bankers
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orporate earnings season really sorts out the analytical geeks from the also-rans especially when it is ‘banks’ week. I sadly have been absent from writing pearls of wisdom on these pages recently as I have been up to my neck in global corporate disclosures and just the art of keeping up has taken up all of my time. Once however it is ‘banks week’ I know the end is nigh… because the UK large cap banks are among the last to pucker up their insights. We will generously muse that it is due to the complexity of their businesses and not inherent laziness… The week started with that bruiser from the East HSBC (HSBA) whose perfect looking share price chart (rising from the south west of the page to the north east like a bullish chartist’s erotic dream) was rudely interrupted by a set of basically crud and below expectations numbers. I waded through the complex disclosures and came up with somewhere in the 630s as the price you should buy some. So having passed on that one, it was hello to Lloyds (LLOY) where I see the government has cut its stake down to below 4%. Life has got better here despite the CEO making the front page of The Sun due to some unlicensed activity in Singapore and with the populace generally paying their mortgages the company has decided to branch out into buying a credit card business. Well, you cannot have enough debt, can you? Lloyds shares did well but are now fast closing in on a fairer value. I guess for choice you hold here for a higher price deeper into the 70s but if you want to buy a bank then it should be… …bad boy Barclays (BARC). What a results day
Thursday this one had. Looking like a hero early on and a zero later with further shabbiness as I write on Friday. Barclays is making progress including a plan to close their bad bank element six months early (good) as well as still making decent returns from their Barclaycard and banking businesses. Even investment banking was not too bad. Barclays is though impacted much more than a Lloyds by the global scene. This can cut both ways though. Expect Trump to punch through a litany of deregulation in the US financial sector? Then Barclays is your beneficiary. At a decent discount to that ultimately geek measure (tangible book value) with a good core return on equity I would buy here. And to finish this little summary we have Royal Bank of Scotland (RBS) in which we all own a majority stake. Yes another year of grinding losses and they have already marked our card that 2018 is likely to be the first year of any profits. Meanwhile US litigation and UK branch liberalisation remain problematic sores. RBS – along with most of the UK banking scene – have had a resplendent last seven or eight months but I am not surprised to see the shares rolling over a bit today. There is value there but whilst widows and orphans should buy Lloyds for the dividend and mainstream investors buy Barclays for the bounce back scope, share masochists and bottom drawer players will be naturally attracted to RBS. Given all banks’ correlation to a mere hint of dodgy economic issues you will not be surprised to know that I would suggest Barclays is your play today. I think it trades much closer to three quid in the next year.
Chris Bailey is a main stage speaker in the China session at www.UKInvestorShow.com and edits www.FinancialOrbit.com UK Investor Magazine — 8 — March 2017
company profile K3 Business Technology Able to manufacture a solution to current challenges? By Steve Moore Having been above 350p as recently as the start of November, shares in K3 Business Technology (KBT) fell below 240p in January – since recovering to a current just over 250p. What’s the story here? The company states it “provides missioncritical software, cloud solutions and managed services to the retail, manufacturing and distribution sectors”. Its core retail offering is based on the Microsoft Dynamics suite of software, though the offering also includes wholly K3 authored and developed solutions. The company’s flagship ‘ax l is’ product is powered by Microsoft Dynamics AX (enterprise resource planning software) and the outcome of a major internal IP development programme. The key offerings to manufacturers and distributors comprise SYSPRO, Sage and Microsoft Dynamics, again tailored with the company’s own IP – including modules for customer relationship management, advanced planning and scheduling, warehouse management, pallet management, data integration, payroll and HR. The company then also offers cloud hosting and managed services. Having drifted down towards 300p, the shares were hard hit by a 10th January “Trading update” announcement. This noted “a softening in market conditions”, “lengthening sales cycles around larger deals” and an “accelerating industry shift to cloud-based consumption” – with the result that “management now believes it prudent to expect that EBITDA (pre-exceptional items) for the full year will be approximately £3.5m less than the originally anticipated”. The company sought to mitigate that it had made “important progress” in operational reorganisation, with this, the pipeline of opportunities and increasing cloud consumption-based earnings and own IP seeing
“the board views K3’s prospects positively”. It was added that “cash conversion is also expected to increase through further improvements in working capital management”. Having added the shares to the Recovery Portfolio of the Nifty Fifty subscription site at a 148p offer price, we concluded they still look good value on revised forecasts (full-year earnings per share of circa 18p, rising towards 23p next year) but that the latest update created doubt on management’s ability to deliver. As such, ahead of a further update with half year results intending to be issued “towards the end of March”, our stance is currently hold.
Management Having been Chief Financial Officer at K3 for over 15 years, David Bolton took over as CEO in January 2014 before becoming Executive Chairman following the commencement of a new CEO in October. He qualified as a Chartered Accountant in the mid-1970s with Ernst & Young. CEO Adalsteinn Valdimarsson has more than 20 years of experience in the software industry including recently as Chairman of Microsoft Dynamics Independent Software Vendor of the year 2015, LS Retail. Other prior experience includes responsibility for the strategic restructuring of a number of large IT companies owned by Iceland-based Hands Holding and as a founder of Landsteinar Group, focusing on products and services for the Microsoft Dynamics NAV platform.
UK Investor Magazine — 9 — March 2017
Why do we fight fraud on AIM and elsewhere? By Tom Winnifrith, The Sheriff of AIM
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e do not pay the writers on ShareProphets very much. In fact only Steve Moore, the Pizza Hard Man Darren Atwater and I are on a living wage. The rest of our team do this as an addendum to their day job. Gary Newman is a fishing journalist, Nigel Somerville is a music teacher, etc. So the rest of the team write for us for a bit of bonus cash but because they enjoy what we do. They like seeing us take down the bad guys. And they adhere to the one rule we have for all
writers: write exactly what you think and want and the site will not censor a word, only libelous comment will be removed. This can see members of our team advising folks to sell shares I own. So be it, I would not change a word. I used to work for a company which I founded but where I gradually lost control (to the asset strippers). In my last few years at Rivington I had copy spiked, censored and I found myself losing the will to write. As a
By Nigel Somerville
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om Winnifrith is entirely to blame for handing me the epithet The Deputy Sheriff of AIM. After some years of losing money on the AIM Casino I started to look into some of my losses and was horrified by what I found out. Had I got some terrible blind spot when analysing stocks? Was I unable to read an RNS properly? Perhaps it was just a case of everything going wrong for the company in question, but everybody did their best and behaved perfectly honourably. A look skywards or into the mirror and a bit of abuse later the pain would subside. But what if there were rum doings? What if we were not being told the truth by a company, its directors and its advisers? What if the regulators failed to act? What then? We all know how the LSE
likes to promote AIM as the world’s most successful growth market and have us believe that it is tightly regulated by the oxymorons of AIM Regulation. In any case the chocolate teapots of the FCA should be there as a back-stop. But when I started to examine those losses I was sorely disappointed. Lies, corruption, willful blindness, deliberately and carefully crafted misleading statements are the order of the day on the Casino and nobody cares. Who is out there to protect the little guy? Who has corporate ne’er-dowells swinging from the nearest tree? ShareProphets is a wonderful organ – writers are free to say what they want and if there has been, shall we say, “colourful” conduct then we expose it. Tom Winnifrith wants the hard evidence, but if it is there then his see you in court, bitchez is more
UK Investor Magazine — 10 — March 2017
writer the worst thing that can happen is being censored.
again (the Aidan route). Or apologise and change direction.
Post Rivington, as I tried to start again I worked for a couple of other folks as a freelancer but again found out that speaking the truth counted for nothing if a crook with fascist lawyers threatened a publisher without a spine. I exposed Pirate Pete Landau, he sent a fascist lawyers letter and another publisher caved. Gosh that was soul destroying. And would it not have been better for investors had Landau (now facing a string of criminal charges & a proven corporate tea-leaf ) had been exposed and brought down earlier?
That is what i did five years ago getting back to what I did at the start of my life going after frauds. You can do that only if you have nothing to lose which I did, being worth minus £200,000, and if you know how AIM works (or doesn’t) and how to spot a “wrong un”. There are dozens of websites dedicated to the bull tack on AIM shares. Moreover there is a vast IR & PR machine which uses shareholders funds to promote ( oft worthless or overvalued) stocks so that they can raise more cash from mug punters via placings. So there are armies of folks saying BUY.
So ShareProphets was established. Our swashbuckling style of taking on fraudsters can land us in a spot of bother. I now have a vast collection of lawyers letters from folks who wanted to shut me up. Fraudster Rob Terry of Quindell, the Globo fraudsters, lyin’ Chris Cleverley of fraud African Potash, Charlatan Darren Winters, the list goes on and on and on. Right now Aidan Earley, the shadow director of failed fraud Worthington and a man who have been involved in 52 companies since 1988 of which 51 have gone bust, and 1 is not yet bust as it is involved in the Rangers fraud case, is suing me for libel and for £50,000. He says that I have damaged his good reputation as a businessman. Whatever. Of course folks will say that I have made mistakes in my career and they are absolutely right. I admit to the mistakes although pointing out that a number of the accusations folks like Aidan and my other critics make are pure fabrication. If you make mistakes you have two options: carry on making the same errors than just a good headline. It is a promise. We may be the Millwall FC of financial journalism (everybody hates us and we don’t care) but someone has to do it. Nobody else does. It is an old-fashioned concept, journalism, but it is alive and kicking at ShareProphets. And kicking dodgy companies and their corporate spivs and hangers-on who make a living from spinning out lie after lie, misleading statement after misleading statement, or just not checking (as they are paid to do, by the very shareholders in the company in question) is what we enjoy the most – ouzo at the ready.
That is why ShareProphets and the work we do is unique - we are the only folks saying sell. Ignore us if you wish as we are not always right but surely it is good to have one voice going against the shrill crowd? As for busting fraud we are almost alone. Newspapers cover small cap stocks in a minimal fashion. When they do write it is usually what the PR folks tell them to write, that is the way Fleet Street sucks up to PR in a corrupt axis. Pr gets to ramp shares in its clients. Journalists earn brownie points so that they can, in dude course, get a job in PR and earn big money. So we are the only organ tackling fraud on AIM and in financial services on a daily basis. If we fold or are closed down by Aidan Earley the fraudsters will celebrate like it is all their Christmases rolled into one. I hope that you support the work we do as we have no intention of dodging the good fight and backing down.
incubator of the next generation of blue-chips and have a hugely beneficial effect on the UK economy. The sad truth is that AIM’s long-term record is one of losing investors’ cash whilst the cronies live it up and the regulators do nothing about the corruption. In the post-truth world in which we live, the rest of society is only just catching up with the AIM Casino. In my own small way, I hope to carry on exposing lies and skulduggery on the markets and hope one day to do myself out of a job. But there is no sign of it yet.
The shame of it all is that AIM could - and should - be the world’s most successful growth market. But the measure of that success is how its investors – and not the cronies – fare. It should be the UK Investor Magazine — 11 — March 2017
Madame Le Pen is so God Awful but as she keeps doing things that folks love she might just win: the Muslim bigot & the headscarf Writes Tom Winnifrith
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hough the candidates ranged against Madame Le Pen in the French Presidential election are truly dreadful, I must still hope that one of them triumphs. I just cannot support a member of the Le Pen family or of the Front National. The polls indicate that Madame Le Pen will win the first round easily but will almost certainly lose the second round, a playoff between the top two candidates for the first contest. But as each day goes by Le Pen’s poll ratings improve. She keeps doing things that just cause her opponents to look silly. She skewers the elitists of the liberal left on their own double standards and the sans culottes applaud her again and again. Heck, we must accept the possibility that she might just win. The other day when she was set to meet a Muslim cleric and was asked to wear a headscarf as she entered the building. Le Pen refused and so the meeting was scrapped. Some on the liberal left will regard this as culturally insensitive - there is only one region which the “bien pensants” believe can be dismissed as a barbaric relic and that is, of course, Christianity, all others must be respected in full. Others will (rightly) point out that women are not second class citizens and so why should they be treated as such? It is not intolerant to say that sexual discrimination is wrong and that we should not accept it just because of one interpretation of one religion. If this was any female politician other than Le Pen most of the left would back her stand against
sexism, arguing that this fight trumps the need to be culturally sensitive to backward looking religions. They would start to drone on about glass ceilings and praise her bold stance. But it is Le Pen so instead most of the left argue that she is
just another racist right winger. My sense is that most folks outside the media and political liberal elite are overwhelmingly with Madame Le Pen on this issue, I certainly am. And the trouble is that on so many other live wire issues they also back Le Pen’s views. And that makes me wonder if we will see a repeat of the “shy Trump” phenomenon in the French elections. There are, I suspect, a lot of Froggies who would not admit to a pollster that they would even consider voting for Le Pen but who find themselves agreeing with her far too often on issue after issue. How such folk vote in the privacy of the polling station is anyone’s guess.
This article first appeared on www.TomWinnifrith.com UK Investor Magazine — 12 — March 2017
INTERVIEW Richard Poulden, Chairman By Tom Winnifrith Tom Winnifrith: PCGE has gone through some turbulent times recently – care to elaborate? Richard Poulden: The Company has indeed seen some ups and downs, but it’s the nature of the beast I think. We’re in a high opportunity area in a massive marketplace – China, but what’s true is that massive opportunity also brings risk with it. But we’ve steadied the proverbial ship, and we have some more interesting times ahead. TW: What happened with the CPDC debacle? It seemed like it was the great hope of the company, but was then offloaded pretty quickly. RP: The CPDC deal, on paper and in our due diligence, was attractive. It certainly delivered profits and cash to the Company initially and indeed continued to grow. Then, halfway through 2016 we realised the business started to melt away. Suppliers and customers were each blaming the other and the major supplier tried to change the terms of business in direct breach of the supply agreement. As announced to the market, we started down the litigation route and I think we had a reasonable case, particularly against the vendors. However winning at litigation can be a very pyrrhic victory if you cannot enforce the judgement. We were thus facing a probable additional £250/- in legal costs with perhaps the same again trying to enforce judgement if we won. That would have meant further actions in Asian jurisdictions, trying to track down companies and assets where they would have had plenty of notice that we were coming after them. Accordingly in the fourth quarter of last year , we decided the best course of action for the benefit of the Company and its shareholders was to “sell” CPDC back to it’s original owners. I want to emphasize that the consideration for the “sell back” of CPDC was not just the original shares issued for the purchase of CPDC but in addition all other shares which we could identify as being associated with the main vendors of CPDC. This transaction meant we didn’t need to deal with the litigation issue, and put some strong working capital back into the business from the sale of those shares. It was really the best response to an untenable situation, and one that’s substantially improved the financial situation of the Company. TW: So it was just another “Filthy Forty” Chinese fraud then?
RP: Tom, you can’t just throw the “fraud” word around: it was a failed acquisition and that can happen in any country in the world. The Chinese element did make it more difficult though to gain full control of the acquired business. I think what makes PCGE different from some of your other 40 is that when we realised there were problems we moved to restructure the board and then divest the problem area and use that to bring in cash. TW: OK, so you get the money in from the sale of the shares you took back but then we have another massive placing ON TOP of that, what was all that about? RP: Well the initial share sale was insufficient to clear all the outstanding liabilities in full so if we raised no further funds we would have been back to point zero at best. By raising the additional funding we are now not under pressure to do any deals. Remember, PCGE remains an operating company as it still has the Chinese media licences with which it floated and it has retained the gambling licence formerly held by CPDC so now that it has cash as well it is in a far stronger position to deliver a viable business. TW: There’s a lot of talk about opportunities, but when will investors see some concrete plans? RP: Our Chinese licences, and the experience of the Board are delivering interesting opportunities all the time. I don’t think many people thought we would pull off this restructuring: you only have to look at the shorting that went on while we were working on the transaction. We are always looking for deals but since we announced the restructuring I have been inundated with a mixture of rubbish and interesting ideas. We will work on these and announce what we can as soon as we are able. TW: Is PCGE remaining focused on China and gaming? RP: It’s important to remember the huge opportunities that exist in the Chinese market and I am sure you have read my economic commentaries on China ruling the 21st Century. To me, totally ignoring China because of one bad deal, would make no sense at all. However we will look at any opportunity that builds value for shareholders: remember, Sirius was a bust copper explorer when we turned it into a potash company. TW: Any final comments? RP: Well it has got to be “Never Say Never Again”, unless it’s twitter of course where I think that is wholly appropriate!
UK Investor Magazine — 13 — March 2017
See you in Court Bitchez T-shirt on sale special one off offer for UK Investor guests Writes Tom Winnifrith
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e want your support as we face legal threats to our very existence at ShareProphets from some teribly naughty boys who have stated they wish to close us down and are using spurious libel claims to do this. So we would like you to buy a Sheriff of AIM ‘See you in court, Bitchez’ t-shirts for only £25. But we have a special offer for those attending UK Investor Show on April 1.
Wear it to the UK Investor Show on 1 April 2017, and I (or a designated minion in fact almost certainly a designated minion.) will give you - on the spot - a real Bank of England £5 note and a mini-vial of Greek Hovel olive oil. This will be your only chance to get the real deal real Mani olive oil from the hovel. Order your T-Shirt HERE.
UK Investor Magazine — 14 — March 2017
Three shares to sell for March By Tom Winnifrith
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ith shares as a whole surging to new highs it is not much fun being a bear right now. But, given that less than helpful backdrop, it is pleasing to recount that this column has marked up a couple of major wins in February.
crash. It fired its CEO in early January, the second CEO to met such a fate in one year. It hid (bad) price sensitive news from the market until late February so its new CEO should, IMHO, be doing a perp walk. And it has served up a dire profits warning.
The suspension of Cloudtag (CTAG) on the AIM casino following the accelerated resignation of its Nomad Cairn Financial does not quite mark the end for this nasty little fraud. But it is the beginning of the end because no Nomad will want to take on a client which has serially lied to investors to raise cash. So with no Nomad the shares will be booted off AIM on March 28. Off AIM, it will not be able to raise money and all the signs are that almost all the cash it has raised (on a false prospectus) has gone. Like all frauds it will thus run out of other people’s money and go bust. Cheerio.
At 1.125p the market cap is £6.4 million which is roughly equivalent to net current assets. But it is burning cash at an alarming rate and I cannot see that being turned around before all the money is gone. As such the share price will track the cashburn all the way to zero. Incidentally this company changed its name a year ago from one daft name (Rightster) to its current daft name. Any PLC which engages in such pointless and costly folly is surely a wrongster.
It is also pleasing to see shares in Avanti Communications (AVN) slump to new all time lows of 14.5p after dismal interims. How its bombastic CEO Dave Williams must be pleased that he made millions of quid selling shares at £8 as he urged others to buy. Good call, you fat prick. Avanti is not a fraud although its accounting policies have been exceedingly fruity. It is just a failed business model. S&P now rates its debt ( of which it has vast amounts) as likely to default. That makes its equity worthless. It is just a matter of when. And so what to sell this month? Our best ideas will of course be presented at UK Investor Show on April 1 - see page three to grab a free ticket. Evil Knievil and I will be taking one AIM listed company apart in horrible detail. And Lucian Miers, Matt Earl, Gabriele Grego, Graham Neary and I will have 10 stocks to short in our session. So ahead of then? Brave Bison (BBSN) looks like a slow motion car
Next up is Eden Research (EDEN). I know I featured this last month and before but in such awful times for we poor little bears it is right to stick to slam dunk frauds. The point about Eden is that the clock is ticking on the cover-up of its major fraud of August 2015, the Terpenetech panama pump. Terpenetech has been involved with Eden in doing fraud for half a decade but the 2015 fraud will be laid bare when we see accounts
UK Investor Magazine — 15 — March 2017
for the year to July 31 2016. Those are due by the end of April this year. Last year it filed on deadline day. Which is odd for such a small company. I expect the same again. Those accounts will lay bare the panama pump fraud which, do date, folks like Nomad Share Cap and the Oxymorons at AIM Regulation have pretended did not happen. At that point the pretense will not be sustainable any more and Eden - which is in urgent need of another bailout placing - will be in serious merde. At 12.5p the shares are a sell with a target price of 0p. Why 0p? Because in the end, frauds always run out of other people’s money. Finally, again a company I have mentioned before - Servision (SEV). It has never generated cash, its accounting policies stink and have seen it reported to the FRC and its RNS announcements have time and time again been shown to be er... not true, fake news. Until two weeks ago it was surviving on the back of an uber expensive short term loan. It was at death’s door and its shares were 2.25p. Then a murky, hard to track down,
Delaware based outfit called Cascade offered to invest $2 million at 11.4p. WTF? If Cascade had offered to invest at 2p Servision would have bitten its hand off. There are some really strange conditions to this investment and the whole thing is so obviously “just not quite right” that it should make any sane person run to the hills. Even with this cash, Servision will need another emergency placing within six months. When this unravels it will unravel fast. If AIM was not so utterly dodgy, Nomad Allenby would have walked as soon as it saw the cascade deal. Who knows, it may well do so as it stinks. The shares have been pumped on this nonsense to 4.25p. They are a slam dunk sell with a 0p target.
Hot Stock
ROCKETS Stocks Ready to take off hotstockrockets.com UK Investor Magazine — 16 — March 2017
the house view Don’t get carried away by record highs
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o the FTSE is now well above 7,000 and at record highs. Over in the US, the Dow has surged past 20,000 and, having passed through Insanity Central, the self-interested or brain dead cheerleaders are now talking about Insanity North as the next destination. Yes, people really are talking about the Dow at 30,000. It is all too easy to get carried away. It is certainly dangerous to be a bear and to short the market. That is a strategy we have advised against for some time although we have, ourselves, been bears for a good time. Right now fundamentals are being swept aside by a powerful rip tide of bullish sentiment. You just cannot argue with that. Once a market or a stock reaches a valuation that is clearly insane then facts cease to matter and there is no reason at all why the next valuation should not be insane + 50% or 2 insane or 3 insane. Hell, why not, 10 insane? But it is hard to call the top in such situations and in the end gravity cannot be defied forever. The market is right now defying gravity and all around us we see signs of madness. The IPO of Snap was a case in point - $25 billion for a business where growth is slowing and which last year burned half a billion dollars. Will it ever reach profitability? Maybe? One day. Does that make it worth $25 billion? No way. But investors rushed to buy anyway so as “not to miss out.” History tells us that such episodes always end in tears. Snap is a sign of a market that has lost touch with reality. The facts are that the global economy and thus corporate earnings will grow very slowly this year yet shares trade on all time high PEs. One has to give and it is not going to be a massive uplift in E but a massive downgrade in P that returns us not to normality - in terms of historic average PEs - but below normality. Markets never revert to norm after a big move ( either way) they always over-react. Meanwhile there are bubbles set to burst such as China and Real Estate in the US and UK. The Eurozone is in crisis, and ISIS can always spring a nasty surprise. Base rates in the US and UK are heading higher and that will catch the over-borrowed as it always does when monetary policy tightens in the debt addicted West. So we remain bearish. Our time will come but that is not to say the market may not head closer to insane North before then. UK Investor Magazine — 17 — March 2017