Rosslyn Data Technologies Plc (LON: RDT)

Business Overview
Rosslyn Data Technologies Plc is a UK-based company, which offers various platforms, such as data factory, application centre, technology infrastructure and security. The company offers different types of solutions, such as big data solutions, finance, systems, etc. The company introduces new technologies to the market that are used every day by hundreds of companies to improve the quality of their decision making.

Recent News
On 14^th January 2020, the company announced that it has won a five-year contract with a value of €1.0 million, for the implementation and license of RAPid supply chain analytics.

Financial Highlights – H1 Financial year 2020 (31st October 2019, GBP, Thousand)
 

(Source: Interim Report, Company Website)

In the first half of the fiscal year 2020, the company’s revenue declined by 11.7 per cent to GBP 3.12 million as compared to GBP 3.53 million in the first half of the fiscal year 2019 due to a reduction in low-margin professional service revenues. Gross profit decreased to GBP 2.53 million as compared to GBP 2.77 million in H1 FY 2019 while the gross profit margin during the period improved to 81.2 per cent against 78.4 per cent in H1 FY 2019. Operating loss of the company for H1 FY 2020 was GBP 932,000 against GBP 807,000 in H1 FY 2019. Loss after tax was GBP 826,000 in H1 FY 2020 versus 660,000 in H1 FY 2019. The basic and diluted loss per share of the company was 0.43p as compared to loss of 0.36p in H1 FY 2019.

Share Price Performance

Daily Chart as on 15^thJanuary 2020, before the market closed (Source: Thomson Reuters)

On January 15^th, 2020, Rosslyn Data Technologies Plc shares were trading at GBX 5.88 at the time of writing before the market close (at 8:10 AM GMT), up by 1.38 per cent against the last day closing price. Stock's 52 weeks High and Low are GBX 8.25/GBX 4.70. The stock price has given negative 16.59 per cent returns during the previous year and 15.29 per cent return in the last one month.

Valuation Methodology

*Peers: Mirada Plc, Access Intelligence Plc, Altitude Group Plc, Dillistone Group Plc, Big Sofa Technologies Group Plc and Crimson Tide Plc

Conclusion
During the first half of the financial year 2020, the company won significant contracts including GBP 0.9 million contract from a multinational general insurance company, GBP 0.6 million from a science-led sustainable technologies business and Euro 1 million from an international building materials group. Their current customer portfolio is also expanding. The company’s gross profit margin has also improved. However, there are certain principal risks and uncertainties which could affect the overall business of the company. Excessive dependence on key executives and technical personnel could impact the operations of the company. The company operates in a technological driven market, any disruptive change in technology could affect the business of the company. Competition in the industry could affect the revenue and profitability of the company. Political and economic uncertainty could impact the business of the company. Failure in cybersecurity and critical data breach could hamper the operations as well as the reputation of the company.

Based on the valuation and factors as highlighted above, we recommend investors to keep a “Watch” on the stock at the current price of GBX 5.88 (as on 15th January 2020, before the market close at 8:10 AM GMT), with support from few catalysts needs to be evaluated at a later stage. 

DP Poland Plc (LON: DPP)

Business Overview
DP Poland Plc is a UK based company which is listed on the FTSE- AIM index. DP Poland wholly owned DP Polska S.A., a polish company, which operates Domino’s Pizza in Poland. DP Poland Plc is incorporated in Weybridge, Surrey.

Recent News
The company has appointed new Chief Executive for the company. The new Chief Executive is Iwona Olbrys effective from 1 January 2020. The company announced this information on 20^th December 2019. Iwona Jolanta Olbrys is an experienced person with experience in the Food & Beverage sector in Poland. He was in Telepizza Poland Sp. z o. o. for eight years.

Financial Highlights – H1 Financial year 2019 (30^th June 2019, GBP)

(Source: Interim Report, Company Website)

In the first half of the fiscal year 2019, the company’s revenue pre-IFRS 16 was GBP 6.9 million as compared to GBP 6.4 million in the first half of the fiscal year 2018. It was due to improvement in like-for-like growth and the positive impact of the company’s trial TV advertising. Group EBITDA loss increased by 18 per cent to GBP 962,444 on pre-IFRS 16 basis against a loss of GBP 814,086 in the same period of FY2018. The company’s loss before tax was GBP 1.86 million on pre-IFRS 16 basis in H1 FY2019 against GBP 1.11 in H1 FY2018.

Share Price Performance
 

Daily Chart as on 15^thJanuary 2020, before the market closed (Source: Thomson Reuters)

On January 15^th, 2020, DP Poland Plc shares were trading at GBX 6.40 at the time of writing before the market close (at 10:00 AM GMT), up by 6.67 per cent against the last day closing price. Stock's 52 weeks High and Low are GBX 14.53/GBX 3.60. The stock price has given negative 52.59 per cent returns during the previous year and negative 17.41 per cent return in the last six months.

Valuation Methodology


Conclusion
The company’s losses have increased coupled with the recent headwinds affecting the Polish food delivery sector have dented the growth of the company. Food and labour costs issues, and the impact of the aggregators on the sector likely to continue which would hamper the business of the company. Competition in the industry and changes in customer tastes could affect the revenue of the company. There are regulatory and compliance risks which could hamper the operations of the company. Inability to identify suitable locations for new stores could affect the revenue of the company. Adverse economic conditions in Poland could result in less income with the customers which in turn, affect the revenue of the company. There is a risk that the company might lose franchisees which could impact the revenue and profitability of the company. Failure in IT system could hamper the operations of the company.

Based on the risk factors as highlighted above, we recommend investors to “AVOID” taking fresh positions in the stock at the current price of GBX 6.4 (as on 15th January 2020 at 10:00 AM GMT).
 
*All forecasted figures and peer information have been taken from Thomson Reuters.

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