Should You Buy Cap-XX Limited, Sinclair Pharma PLC And Manx Telecom PLC After Today's Results?
Every heard of CAP-XX (LSE: CPX)? It's a small Australia-based company, with a market cap of around £13m before today's interim results, and it makes thin, flat supercapacitors. If you don't know what they are, they're key components in the power supplies of portable computing devices, so there's a pretty big market for them.
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But the shares took a tumble today, dropping 18% by the time of writing, to 4.05p, caused by a 27% fall in revenue for the six months to December 2015. That was, we were told, due to the deferment of some orders combined with increasing project lead time. The deferments were known in October, so might the price fall be a bit of an over-reaction?
Well, there was an increased net loss, of A$1.3m, and the firm reported cash reserves of just A$0.9m -- although a new patent licence agreed after the end of the period should bring CAP-XX an up-front payment of at least A$2.4m. There are no forecasts for profits yet -- in fact, there are no forecasts at all -- so it's hard to quantify. A big risk or a company with great potential? Possibly both.
Pretty skin
We also had interim results from Sinclair Pharma(LSE: SPH) today. They were greeted with a little more enthusiasm and the share price gained 3.4% to 34.6p as a result. Sinclair, which specialises in aesthetic dermatology (skin lifiting, collagen stimulation, and things like that), reported a loss of £14.1m for the period, up from £10.7m, with a 2.8p loss per share compared to 2.1p a year previously.
That came from an expected fall in sales to £7.7m, from £10.5m, attributed to "planned distributor de-stocking". But the third quarter is expected to bring revenue in excess of £8m, and along with an amendment to the payment terms for Sinclair's acquisition of AQTIS Medical BV, that pleased the markets. The disposal of Sinclair's non-aesthetics brought in £132m, enabling it to clear all debt and leaving net cash of £75.4m at 31 December.
With losses expected to continue for at least the next two years, making any valuation of the company pretty difficult, it's a big risk -- but it could be one worth taking.
A great start
Since flotation in February 2014, shares in Manx Telecom(LSE: MANX) have put on 34% to reach 215p. And on top of that, the company paid out a 5.6% dividend for 2014, and has just announced a 5% rise in its 2015 dividend to 10.4p -- yielding 4.8% on today's elevated share price.
Revenues were pretty flat for the year, but underlying pre-tax profit gained 27.9% with underlying EPS up 19.4%, and the company recorded strong operational cash flow of £25.4m. How does it do so well? Having a monopoly on fixed-line communications in the Isle of Man certainly helps (and the firm has just renewed its government contract for another five years), and it also has about three quarters of the island's mobile business.
With 4G rollouts continuing (after helping boost mobile revenues by 9.3% in 2015), forecasts suggest more of the same over the next couple of years, with the firm's progressive dividend policy set to boost the annual cash handout by 5% per year.
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
