Webinars Galore – Intercede + AB Dynamics + Augmentum

This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

The views expressed in this article are those of its author and not necessarily those of ShareSoc.

I seem to be filling my days with webinars of late. Two today and one yesterday, partly because this is the season for half-year results announcements.

I’ll cover the recent ones – all on the Investor Meet Company platform, but I’ll only give you some general impressions and highlight particular points as you can watch recordings of them for the detail:

Intercede (IGP). Positive results and the company seems to be moving in the right direction – expanding products to cover a wider customer spectrum and making acquisitions. The presentation also covered what the company’s products provide in the identity/security sector but even though I have been a shareholder in this company for a long time it is no clearer to me what the products provide in terms of individual benefits or why people would buy them rather than competing products. Like many technology companies they have a communication problem!

One also gets the distinct impression that the products are complex to install and maintain. Does identity management really need to be that complicated? This and the above factor may be why the company has never grown as quickly as it should have done. But I remain a long-term holder of the shares.

AB Dynamics (ABDP). This company has come a long way since I first purchased the shares in 2015. From being a small UK company operating in a niche of the automotive engineering sector it has become a major international business. It now has a high proportion of recurring revenue from previously being reliant on one-off deals and has recovered well from the impact of the Covid epidemic.

A good presentation if rather too full of acronyms and there was a focus on ABD Solutions which is providing automated driving solutions to companies such as big miners. This company is also growing by acquisition and there seem to be more opportunities for that.

Both the above companies got somewhat bogged down in their presentations on the detailed financial results. This is both boring and unnecessary as we can all read the results announcements before the event. Only a very few key financial points need to be presented.

Augmentum Fintech (AUGM). This is an investment company which I do not currently hold. It focusses on the financial technology sector and the share price performance has been quite dire in the last eighteen months as a result of it being in a deeply unpopular sector. The presenter said there has been a sell off of risk assets but it could be a compelling market in 2023. I agree with the former comment but as regards the latter I would not like to take a view on it. Markets are composed of willing buyers and willing sellers and emotions have more influence than facts.

There were some interesting comments on digital assets such as crypto currencies and that the speaker had met FTX management but the company did not invest.

The company’s interim results reported that NAV per share had remained stable but NAV fell. These numbers are no doubt influenced by the share buy-backs the company has been doing and note that they have been buying back shares at an average discount of 42%!

Comment: The only way to judge the value of these kinds of investment companies is to look at the underlying holdings in which they are invested. That can be difficult to do as they are small unlisted companies and there was minimal information provided in this presentation on them. But a high discount to NAV is common on private equity investment companies.

However I think that valuations of small technology companies may have reached a plateau and may be now reasonable value. But it could take some time for investors to view the sector more favourably as many people have been badly burnt in the last year from over-optimism about the technology sector.

These are my personal views alone of course and should not be relied upon!

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

One comment
  1. Mark Bentley says:

    Thanks Roger,

    I do hold Augmentum (a small position), having picked some up in their last placing (when the shares were still trading at a premium!). I also attended the webinar. I think you may have misinterpreted Tim Levene’s comments regarding a compelling market in 2023.

    What I believe he meant is that 2023 may well present opportunities to pick up stakes in quality fintech companies at more attractive prices. Augmentum has a good amount of dry powder, after realising its stake in interactive investor, so is well placed to deploy capital. Augmentum’s share price picked up a bit after the results and presentation but I shall watch for opportunities to add to my holding at better prices if the market loses its nerve again.

    Best,
    Mark

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.