Supply@Me Capital PLC – Loss-making entity with negative share price return in last 1 year. 

Supply@Me Capital PLC (LON: SYME) is a fintech platform provider. It provides Inventory Monetisation© service to European Trading and Manufacturing Companies.

Investment Rationale – Avoid at GBX 0.4939

• Gross profit declined by nearly one-fifth in FY20 against FY19, which the Company turned from net profit to a massive net loss position.
• From the technical standpoint, shares were trading below the short-term support level of 20-day (GBX 0.6367) simple moving average prices, which reflects a downward trend in the stock.
• In the last one year, Supply@Me Capital share has delivered a negative return of 54.96% as compared to the positive returns of FTSE AIM All-Share Index.

Risk Assessments

• The Company is operating as an early-stage FinTech player and has not generated material revenues, and it is difficult to predict that it will generate significant revenues in the foreseeable future.
• The remote working environment amid Covid-19 pandemic presents heightened operational risks.
• The increased usage of remote services has escalated the threat of external fraud and cyber-attack.

Recent News

4 September 2020: The Company formed an alliance with Epic SIM for inventory funding and client company origination.

Trading Update (as on 27 July 2020)

• SYME announced the development of the dual-funding model. Therefore, it is now progressing with two funding routes to achieve Inventory Monetisation - Open-Funding and Self-Funding. It targets to initiate the pilot by the end of 2020.
• Demand for Inventory Monetisation© remained high from clients.

Financial Highlights - for the twelve-month ended 31 March 2020 (as on 1 July 2020)

 (Source: Company Website)

• During the period, the Company did not pay any dividend and the directors do not foresee any dividend being payable even in the FY21.
• In FY21, the Group will be focussing on growing the market share and enhancing technological capabilities.
• The reverse takeover of Supply@Me S.r.l. into Abal Group Plc was completed in March 2020, and since then, SYME has continued to gain traction from the Inventory Monetisation Platform.

One Year Share Price Chart

 1-Year Chart as of 16 September 2020, before the market close (Source: Refinitiv, Thomson Reuters)

Conclusion

In twelve months to 31 March 2020, SYME reported a significant decline in bottom-line financial items. Notwithstanding the Covid-19 backdrop, the management of SYME believes that the demand for inventory monetisation is growing and customer base remains strong. However, the impact of Covid-19 on the inventory funding market is difficult to interpret, especially when interest rates are currently at historical lows. As an early-stage business, the financial strength of the business depends on two key factors – Inventory funding and matching this funding to inventory customer base. Stock 52 week High and Low were GBX 1.10 and GBX 0.0413, respectively.

Based on the headwinds faced by the Group, we have given an "Avoid" recommendation for Supply@Me Capital at the current price of GBX 0.4939 (as on 16 September 2020, before the market close at 12.12 PM GMT+1), while we look for any clarity over the adoption of new platform or results of the pilot scheme.

Eco Atlantic Oil & Gas Ltd - Operating in the development stage and do not generate any revenue.

Eco Atlantic Oil & Gas Ltd (LON: ECO) is an international oil and gas exploration and development company, with focus on the identification, acquisition, and development of upstream petroleum opportunities around the world. It is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and on the Toronto Stock Exchange.

Investment Highlights – Avoid at GBX 22.00

• The Company’s profitability margins and Return on equity remained in the negative zone from last two years.
• P/E and EV/EBITDA metrics are in a negative zone against the industry.
• The stock has underperformed with the index (FTSE AIM All-Share) during the one-year period and delivered a negative return of 87.57% in the last year.
• From the technical standpoint, 14-day RSI stood at 62.14, which means the stock price could decline in the short term.

Key Risks

• The global demand and supply imbalance can affect product volumes and prices across all markets.
• Long production delays and outages could have a material impact on production, operating performance, and financial condition.

Financial Highlights (for the three months ended 30 June 2020, as on 20 August 2020)

(Source: Company Website)

• On 30 June 2020, the Company had cash and cash equivalents of US$17.9 million with zero debt.
• Overall, it delivered a decent performance in three months ended 30 June 2020, with a net loss of CA$0.8 million.
• ECO is non-revenue generative and is currently running operations on the grants received and available cash balance.
• In 2020, the Company has made significant strides towards advancing the asset portfolio.
• It remains well capitalised and fully funded for a further drilling campaign in Guyana and additional activity elsewhere.

One Year Share Price Chart

 Daily Chart as of 16 September 2020, before the market close (Source: Refinitiv, Thomson Reuters)

Conclusion

The Company assumes that the outlook would be decent in the coming months, with further developments across existing partnerships and expect to add new customers and partners. In Guyana, it has made decent progress with high grading and looks forward to recommencing drilling activity in 2021. The Company has taken decisive action to preserve ECO’s liquidity and has a resilient business model.  However, the Company is in the development stage and do not generate any revenue for the period. The stock made a 52-week low and high of GBX 0.195 and GBX 2.95, respectively.

Based on the headwinds faced by the Group, we have given an “Avoid” recommendation on Eco Atlantic Oil & Gas at the current market price of GBX 22.00 (as on 16 September 2020, before the market close at 11:40 AM GMT+1), and we will look out at the turnaround or improvements, such as making new partnership and adding new customers.

Disclaimer

PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine is not responsible for material posted on this website and does not guarantee the content, accuracy, or use of the content in this site. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated.

Kalkine do not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional licensed financial planner and adviser.