UK INVESTOR MONEY // SHARES // INTERVIEWS
ISSUE 22 // MAY 2017
GREEK MELTDOWN It’s worse than everyone thinks
Plus
• Three hot new shares tips
from Gary Newman • The truth about bent bananas
UK Investor Magazine — 1 — May 2017
An Eight page photo-spread of the Glorious 1st
Intro From The Editor
INSIDE 3 Company profile: Universe Group Steve Moore 4 Don’t believe the fake news Tom Winnifrith 5 A day at the UK Investor Show 13 Three resource shares to buy for May Gary Newman 15 Greece: Don’t tell the EU, but it’s getting worse Tom Winnifrith 17 Why join Primary Bid? 18 The House View
CONTACT US UK Investor Magazine 91 - 95 Clerkenwell Road London, EC1R 5BX
Welcome to the May Edition of UK Investor Show Magazine. We try, in this publication, to look forward but you will forgive a bit of a look back on our part to April 1 of this year. That was the day of the annual UK Investor Show and it was a triumph! 3000 people were there to hear some stunning big name speeches and to meet CEOs manning 123 stands. It was our biggest and best event in 15 years. On pages 5 to 12 we look back at the show in a photo special happy memories for those who attended, and for those who did not an idea of what you missed. Preparations are already well underway for the 2018 event on April 21. Although it is almost a year away the main stage speaker line-up is finalised and we bring you three big new stars: Ed Croft, Nick Leslau and Luke Johnson. In 2018 there will be 135 stands and already almost half of them are already booked in. So all we need is you. Don’t miss out. Put April 21 2018 in your diary now or even better buy a half priced ticket ( just £6 including VAT) at www.UKInvestorshow.com/tickets using the promotional code HALFUK - that offer ends June 14. Our normal editor is off on sick leave but Tom Winnifrith has sent in a special report on Greece where he is spending most of his time killing snakes. Greece is also still very sick as Tom explains of pages 15. And this edition also contains four share tips. I hope that you find something of interest. Best wishes,
E: info@ukinvestorshow.com W: www.UKInvestorShow.com EDITORIAL
Steve Moore, UK Investor Magazine
Steve Moore Editor
UK Investor Magazine — 2 — May 2017
company profile Universe Group Shares to reach a new orbit?
H
By Steve Moore
aving slid towards 8p, early April news from developer and supplier of point of sale, payment and loyalty systems Universe Group (UNG) has helped sparked something of a share price recovery. Is there though further to go? Through a main operating subsidiary, htec Ltd, the group designs, develops and supports pointof-sale, payment and on-line loyalty systems for the UK petrol forecourt and convenience store markets. These can be provided as discrete products or on a managed basis – with revenue generated from such sales, installations and support, data centre offerings and product development and consultancy services. April saw the company announce results for the 2016 calendar year – which showed increased profitability despite delays in certain planned customer deployments. Current assets over total liabilities increased by more than £1.5 million to £3.4 million, though after particularly increased receivables (as sales were somewhat concentrated in the final two months of the year), net cash remained just above £2.1 million. The statement emphasised that “there has been considerable customer interest in our renewed and high-functionality product set and this bodes well for continued growth in 2017 and beyond” – and the company’s broker, finnCap, is looking for earnings per share to head towards 0.90p this year (a pre-tax profit of circa £2.5 million, 2016 earnings per share: 0.79p). The results were followed by more than £28,000 of director buys at average prices between 8.674p and 9.125p – and, with the shares still presently below 10p, there looks much to support what clearly seems the boardroom view that there should be further upside from here.
Management CEO Jeremy Lewis qualified as a Chartered Accountant and then gained extensive experience in investment banking and technology-based companies before joining Universe in 2013. CFO Bob Smeeton also qualified as a Chartered Accountant and had AIM company experience from OpSec Security Group before joining Universe in 2008. Non-Executive Chairman Robert Goddard is a Chartered Engineer, with experience from having been on the executive board of Burmah Castrol and CEO of Amberley Group plc. At the latter turnarounds and sales of businesses were delivered and more recently he has taken a variety of advisory and turnaround assignments, joining Universe in 2011.
UK Investor Magazine — 3 — May 2017
Fake bent banana news from the BBC’s Newsnight on Brexit & farming Writes Tom Winnifrith
T
he BBC’s flagship News programme Newsnight is staffed by the grossly overpaid liberal elite who care about the sort of issues we in the 99% don’t give a stuff about and who show an open hostility to Brexit. Impartiality is not the name of the game here. The other night I watched a show where the main feature was on that silly woman who claimed to be a black rights campaigner before - after many years on the liberal civil rights gravy train - she was outed as being er...`100% white. All that time banging on about how being black had left her victimised and oppressed started to ring a bit hollow. At that point, she claimed that she “identified” as being black. Anyhow she has now got a big wonga book deal so maybe that will go some way to make up for all the hurt she was caused by slavery. Then it was onto the thrice weekly Brexit bash with a report on farming. Naturally most of the farmers interviewed were those operating the sort of economically unviable farm in places such as the Lake District or Exmoor which cannot exist without mass subsidy. The government has said that it will replace the handouts with UK handouts until 2020 at least. Remember that as we send a NET £350 million a week to the Evil Empire those EU handouts are actually our taxes in the first place. Natch these folks are worried that the meal ticket for life may be threatened so farmers Newsnight opined - are demanding many things out of Brexit. Farmers in the Lakes, miners, banksters all demand that profitable industries and those working in them pay more in tax to
subsidise unprofitable industries. The blessed Maggie was right about the mines, Brown was wrong about the banks - for capitalism to work, subsidies for unviable enterprises must go. Only one chap at the end was given far too short a time to explain that. The landscape of the Lakes is an artificial one created by farming. But if the farms are unviable why not let it return to its natural state and let 31 million taxpayers keep a bit more of the money they earn without their employer needing subsidy? The bias of the reporter was made clear with her throwaway remark about “many a myth” about EU regulations banning bent bananas and other matters. That is a standard line of the pro EU forces: we wicked Brexiteers make up all these myths. And so the BBC reports that charge as fact as part of its fake news service. In fact the EU did ban bent bananas in the early naughties. In the end the ban was overturned but that the Evil Empire felt that EC Commission Regulation No 2257/94, which stated that bananas must be “free of abnormal curvature” and at least 14 cm in length was a good idea in the first place is worthy of note. Yet the BBC on a regular basis insists that this is all a myth dreamt up by lunatics like Chris Booker and Richard Littlejohn. And so to report bent banana banning as a myth is just common or garden fake news. And it is fake news from an organisation which is able to pay its staff mouthwatering sums not because it is economically viable but because of a vast taxpayer subsidy. Does that sound familiar in any way?
This article first appeared on www.TomWinnifrith.com
UK Investor Magazine — 4 — May 2017
THE GLORIOUS FIRST
Recall the thrill of the 2017 UK Investor Show on 1st April with these photo highlights of the event
UK Investor Magazine — 5 — May 2017
THE PRELUDE
Three days before the show, Golden Ticket holders were invited to a private gala event at Saracens Stadium, up close with Nigel Wray and Nick Leslau and humour from Private Eye co-founder Christopher Booker
Book Today for April 21 2018 and Here’s why! Reason One The 2017 UK Investor Show was our biggest and best yet. The feedback we have had from the 3000 folks who attended was universally positive. But the 2018 show will be even bigger and better. First there are the main stage speakers. The stars of 2017 will be back. So to catch Nigel Wray, Mark Slater, Vin Murria, Lucian Miers, Paul Scott, Tom Winnifrith, Dominic Frisby et al there is only one place to go. These speakers do one event a year - the UK Investor Show. But for 2018 we have new stars on the main stage as well. There is the enfant terrible of property, secret millionaire Nick Leslau. There is the man who floated Pizza Express, headed up Channel 4 News and who pens a must read Sunday Times column, Luke Johnson. And after a one year absence there is Stockopedia’s Ed Croft. To book a seat now with a 50% discount go to www.UKInvestorShow. com/tickets and use the promotional code HALFUK when reserving your ticket.
UK Investor Magazine — 6 — May 2017
THE MAIN STAGE
UK Investor Magazine — 7 — May 2017
Book Today for April 21 2018 and Here’s why! Reason Four To make sure you get a copy of the limited edition book; to hear the best line-up of speakers in our 16 year history; and to meet 135 growth companies on April 21 2018 you need to buy a ticket to the show. If you book a seat now using the promotional code HALFUK at www. UKInvestorshow.com/tickets you will get a 50% discount. That means that an Investor class ticket costs just £6 (including VAT) If you are serious about making money from shares you will be among the 3,500 folks at UK Investor Show 2018 on April 21. We look forward to seeing you there.
UK Investor Magazine — 8 — May 2017
THE EXHIBITION HALL
From the breakout rooms with company presentations to the opportunity to meet company officials one-on-one, the exhibition hall is the start of many conversations
UK Investor Magazine — 9 — May 2017
Book Today for April 21 2018 and Here’s why! Reason Two There is the book. Only those who pay for their tickets before September 14 get a free copy which will retail at £12.99. This is not an e-book but a hard copy and it will be a very limited edition. To book a seat now with a 50% discount go to www.UKInvestorshow.com/ tickets and use the promotional code HALFUK when reserving your ticket. Each of the 21 main stage speakers will be contributing one section to the book, on the biggest lesson they have learned in their investing career. We all make mistakes. Even Britain’s Buffett, Nigel Wray. The key is to learn from them. And that learning experience which has helped to make our star speakers such successful investors is what this book will explore. If you buy a golden ticket, giving you front row seating at UK Investor, a pass to the after show party and a ticket to the Saracens Cabaret three days before the main event (featuring Luke Johnson in conversation with Nigel Wray, Dominic Frisby as a comedian and Private Eye’s Chris Booker) your copy of the book will be signed by the main speakers. An investor class ticket gets an unsigned book. But to get that book you must buy a ticket before September 14 2017. And if you book now you can get a 50% discount on both classes of tickets. Just go to www.UKInvestorshow.com/tickets and use the promotional code HALFUK when reserving your ticket
UK Investor Magazine — 10 — May 2017
UK Investor Magazine — 11 — May 2017
Book Today for April 21 2018 and Here’s why! Reason Three The 2017 UK Investor Show was our biggest and best yet. The feedback we have had from the 3000 folks who attended was universally positive. But the 2018 show will be even bigger and better. There will be even more AIM and main market listed companies in 2018 than there were in 2017. This year there were 123 stands making UK Investor easily the largest one day investor show. In 2018 there will be 135 stands. Already, a year ahead of the event, almost half are booked in. Companies including Optibiotix, Alliance Pharma, Sula, Fox Marble, Premaitha, Concepta, Big Sofa, Amryt Pharma, Petropavlovsk
and many others have already committed to coming back to man stands and give 20 minute presentations. But such was the success of the show in 2017 that we are already taking bookings from companies who want to be there in 2018 including Eco Atlantic and Franchise Brands. At some events there are less than a dozen AIM listed companies attending. We know that what folks want is to meet the men and women who run the companies that you buy and sell shares in every day. And those companies are rushing to secure their place at UK Investor Show 2018. To book a half priced ticket now to make sure you get to quiz the most exciting companies on AIM, go to www.UKInvestorShow.com/tickets and use the promotional code HALFUK when reserving your seat.
UK Investor Magazine — 12 — May 2017
Three resource shares to buy for May Writes Gary Newman
P
eople sometimes question why I don’t invest in all the companies that I write about in a positive light, but the reality is that it is impossible to be in everything that you fancy to do well. But this month I thought I’d take a look at three companies which I do hold shares in, and have done for varying lengths of time, and which produce three different natural resources, all of which I am quite bullish on in the short to medium term. Firstly, in the oil and gas sector there is Premier Oil (PMO), which has had a fairly dire time over the past couple of years since the oil priced collapsed, and the company could have ended up going bust. But a deal to refinance the company has been sorted out, and following 75% of the convertible bond holders agreeing to the terms, it now looks like it should all go ahead as planned – the risk has certainly reduced substantially following that news as a few weren’t happy with the terms that are being offered. There isn’t space to go into all of the details, but basically covenants have been relaxed temporarily, some debt has been extended slightly, and the company has enough undrawn debt capacity for what it already has planned going forward. The company has also managed to offload its business in Pakistan for $65.5 million, which will result in a $40 million book gain on the balance sheet. This one really is a bet on oil recovering to higher levels in the coming years, and it wouldn’t even need to go back to anywhere near $100/barrel for Premier to perform well.
going to come in around 29% lower than originally forecast. Given a current share price of around 62p and a market cap of close to £320 million, I can see decent risk versus reward when treating this as a recovery play. I can also see value in some of the copper plays at the moment, and although it has taken a bit of a dip in recent weeks I can still see it going higher. That would certainly benefit Kazakh miner Central Asia Metals (CAML), as it had still been doing well during 2016 when prices were low, as the latest set of financial results showed. Annual production from its Kounrad operations was around 14,000 tonnes and a similar level is expected during 2017, and given a C1 cash cost of just $0.43/lb it is amongst one of the lowest cost producers in the world – although that was partly down to a devaluation of the local currency, the Tenge. This resulted in a net profit $26 million, the largest it had ever made, and at the end of 2016 it had around $40 million in the bank and no debt – had it not spent over $13 million expanding Kounrad cash would have been even higher.
The company did manage to make a net profit of $122 million during 2016, but that was purely down to a large tax credit.
With a market cap of some £250 million I think this makes it very attractive as it is trading off of a PE ratio of around 10, which is low for a miner, and the dividend yield is nearly 7% - with a 10p final dividend on May 12.
Operationally it has been performing well and averaged over 71,000boepd last year, and guidance for 2017 is 75,000boepd, and that is without the Catcher field coming online at some point during 2017. The company has also been reducing costs and operating expenses are now at $15.8/boe, and the overall amount spent on developing Catcher is
The only real risks I can see here are the fact that it is currently only producing from one asset, and the fact that some might be put off by it being in Kazakhstan, as even if copper were to drop the company would still be fairly safe. So I’m happy to keep holding at around the 235p level and can see further upside potential.
UK Investor Magazine — 13 — May 2017
Finally we move onto platinum, which has been absolutely hammered relative to other precious metals and is trading back around the $950/oz level, partly as a result of the weakening Rand making it cheaper to produce, alongside some demand concerns as well. But I can’t see a lot of downside from here, and this means that I’m still holding Sylvania Platinum (SLP), which has also recently released financial results in the form of Q3 production and financials up to the end of March. The company has shown very good levels of production, but there were concerns that it might start to drop off in the coming years. That problem looks to have been overcome by the implementation of Project Echo at its Sylvania operation, and that will see a steady 55,000 to 60,000 ounces per annum for possibly the next ten years.
This will cost the company $12 million over a four year period, but given that it still managed cash build of $3.9 million on the previous quarter and had $16.6 million in the bank, it will be able to finance the project internally and still have money left over. Cash cost of production is $471/oz, which was higher than previously but was partly due to the Rand strengthening during that period prior to its more recent drop. So as long as platinum doesn’t suddenly collapse operations will remain profitable even at the current lower prices. It is also worth remembering that it produces palladium as part of its PGM basket, and that has performed very well and has been trading above $800/oz. I wouldn’t expect a dividend any time soon as the company has been re-investing profits, but in the next few years it does need to start showing that it can be profitable without having to keep ploughing back in all the money that it is making, but I’m prepared to see how that unfolds from around the 12p mark.
Tom Winnifrith’s
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newsletters.advfn.com/tomwinnifrith UK Investor Magazine — 14 — May 2017
Greece—Don’t tell anyone in Brussels but it’s getting even worse Writes Tom Winnifrith, from Kalamata
T
he Greek economic crisis seems to be a bit out of the headlines right now. Perhaps it is because the looming bank meltdown in Italy and Spain is deemed more important? Or perhaps it is because we are focussing on the imminent election as French President of either a fascist or a finance minister from the Hollande administration which trainwrecked France’s economy? Or perhaps it is because we are now immune to bad news from the Hellenic Republic? We shouldn’t be. On the ground things are getting worse by the day, whatever the EU tells us. Such coverage as there is focuses on the requests by Greece’s frightful and deceitful Prime Minister Alex Tsipras for another drawdown of funds. He points out that new taxes and budget cuts mean that Greece might just achieve something like Primary account surplus this year. Sadly for the loathsome Tsipras the IMF (run by convicted fraudster Christine Lagarde), the EU ( run by Germany) and the banksters will demand even more pain to play ball. And the vile Tsipras will do as he is told. He always does. It means he gets to keep his job, rubbing shoulders with other EU leaders and flying in a private jet. Of course Greece can never repay its borrowings or even get them under control. But kicking the can down the road has “worked” so far if working is defined as living in a world of make believe and Mr Tsipras clinging onto power. One day Greece will have to default. The simplest way is to return to the drachma which will, from day one, plunge in value. Sure Greece will repay its debts but the real hard currency value of its payments will be trivial. That haircut for the ECB, IMF and the banksters is however for another day. There has been some coverage in the West of the misery that the IMF/UE/bankster imposed austerity has caused for ordinary Greeks. Youth employment in Greece (that is the percentage of young bubbles working here as opposed to being unemployed or emigrating) is sub 20%. Pensioners must now live on nine Euros a day as pensions have been savaged. Many of them live in worse conditions than those in the bursting camps for
Greece’s frightful and deceitful Prime Minister Alex Tsipras migrants. But for the OAPs there is no chance of an escape to Britain or Germany. Such suffering continues. If anything it will get worse. But perhaps the political comeback for loathsome Alex will only come when the middle classes rise up? Their taxes are going up. Higher VAT in restaurants is hurting the tourist trade. It is all about getting in taxes. For some of the middle classes paying real taxes is a bit of a novelty but all are asking why they should pay more to support a) the banksters and b) a still bloated and infuriatingly inefficient public sector. The fact that after three years I still don’t have final planning permission to rebuild the Greek Hovel the Mrs owns is not because the various Government departments are swamped with applications. Far from it. But because new rules constantly appear to ensure that the officials always have something to do. So, more and more middle class folks ask
UK Investor Magazine — 15 — May 2017
“just what am I paying higher taxes for?” It is a fair question and when that anger boils up one hopes that the rule of Tsipras and the EU nightmare will be over. The real story is however just how broken the real economy is. Have a loom at bank loans. In February the annual rate of bank financing for the private Greece needs to be free of the Euro sector was MINUS 1.5%. that is to say net loan repayments were 101 million Euros. In 206 banks received an average of just 82 mortgage applications per day, Pre crisis that number was 1,182 per day. The average number of applications for consumer loans was 4,455 a day in 2016 compared to 32,273 a day pre crisis. And that is applications. The number of mortgages and loans granted was far lower. Quite simply those who do have cash ( public servants, tax dodging high earners) are not making applications. Most of those who do apply are those no sane bank, or even a corrupt Greek bank, would wish to lend to. The corporate sector is even worse. ICAP data shows that the percent of Greek companies that are on “high credit risk” has soared from 6% pre crisis to 63% today. Virtually no Greek Companies who are capable of getting credit are applying for it. That the banks are not providing liquidity to the economy is not because the banks are bust. As it happens they are and if they were forced to write down their loans in an even half prudent manner that would be apparent to all. But it is because no-one in their right mind would gear up to invest in a broken economy. That applies to both corporates who one would hope would want to expand but also to households who might want to buy a bigger house. It is just not happening and whilst the problems of Greece are kicked down
the road it won’t happen. Is there a solution? Of course there is. Leave the Euro and so, in effect, default on the debt. Force the Greek banks to write down loans and pursue bad debts - something that never happens. Yes the banks will go bust but from the carnage new good banks will appear to buy the assets of the old banks at what is their real value. If the EU shuns Greece and punishes it as it wishes to punish Britain so be it. The current treatment of Greece is another form of punishment. What could be worse? Greece freed of its debt has many friends who will invest in large capital projects here to help kickstart the economy. Our colleagues in the one true faith, the Orthodox Church, are keen to help. Fancy a naval base in the Mediterranean Mr Putin? Syria not as safe as it once was? Perhaps we can assist? There are ways out for Greece but pro tem can kicking is the order of the day. And that means that the misery will continue. Don’t get me wrong. Life continues. We have just had a bank holiday weekend. Folks went out and drank coffees, Kalamata saw a mass fun run. But the misery is spreading. Austerity hurts. And the anger is growing as is the , already high, average age as young folks continue to seek a better life overseas. A demographic time bomb as well as a fiscal one is the true legacy of loathsome Alex Tsipras. One must hope that before it is too late there is a dramatic change of course.
UK Investor Magazine — 16 — May 2017
LGO Energy, Versarien, Ascent Resources - who is next? Be Prepared...
I
n days gone by when smaller companies on AIM wanted to raise cash they went to City brokers and offered them shares at a huge discount with private investors locked out. It was wrong and it was unfair. But all that has changed with Primary Bid. More and more companies are offering private investors the chance to participate in these placings one the same terms and they do so via the Primary Bid platform. You too can take part, all you need to do is register HERE. In recent weeks we have seen LGO Energy, Versarien, Ascent Resources and others do such placings, making an announcement after hours on Friday and filling the order on a first come first served basis over the weekend.
fact you may baulk at most of them but, sooner or later, there will be one you won’;t want to miss out on. And you will need to be registered to take part so sign up HERE. The point about PrimaryBid is that it allows we private investors to get in on placings previously reserved for City institutions only. If those who sign up to use PrimaryBid via a link here like this one, take part in one of its offerings we get a small commission which goes to support the high quality journalism on ShareProphets. So we are supportive. But we also support PrimaryBid as a way of closing down the bucket shop discounted placing way of funding AIM stocks. One day there will be an offer you will want to go for so ahead of then register HERE NOW
Of course you will not like every placing. In
Hot Stock
ROCKETS Stocks Ready to take off hotstockrockets.com UK Investor Magazine — 17 — May 2017
the house view The general election really does not matter
A
s ever we are being told that this is the most important election in memory. It is true that the leader of the opposition is an IRA & Hamas loving lunatic who would
take Britain’s economy back to the darkest days of the 1970s. But that is one reason why in stockmarket terms the election does not matter a jot. We all know that Comrade Corbyn is completely unelectable and thus the result - a stonking Tory majority - is a racing certainty. So that is alright then? Well up to a point. The Labour party makes great claims about the misery caused by the “austerity” agenda of the wicked Tories. But this is a myth. The wicked Tories have actually increased Government Spending year in year out in both real and absolute terms. Whilst the previous chancellor, the useless George Osborne, used to pretend that the deficit would be eliminated one day, his successor, the even more useless Mr Hammond, does not even bother with the pretence. And thus we enter an election where Prudence has left the building. All four of the parties which might conceivably have some sort of power (The Tories, Labour, the Lib Dems and the SNP) are essentially committed to carry on spending. That means more deficits and, almost certainly, more taxes. The trouble with deficits is that they start to add up after a while and thus by the end of the next parliament UK National Debt will almost certainly be closer to 100% of GDP than to 90%. Okay that is not as high as Greece ( pre crisis) or indeed the USA today but it is still well past the level that most economists deem to be sustainable. And so we face a choice at this election of four parties all committed to worshipping the Money Tree and trainwrecking the nation’s finances. It is not really a great choice is it? UK Investor Magazine — 18 — May 2017
Saturday 21st April 2018 | London Save the date!
UK Investor Magazine — 19 — May 2017