I thought this company might be of interest to a few of you and there does not appear to be a thread anywhere.

Asfare has three divisions and a market cap at 82.5p of just over 4 million. Last eps came in at 7p and over the last tweve months two of the three divisions have been acquired.At this price there are also 670,000 warrants outstanding and a small number of options relating to the Todd acquisition. Institutions paid 90p atwo years ago when markets were a lot lower and the company a lot smaller.

At first appearance the company looks very dull - and might still at last appearance to some of you.

The organic company provides equipment such as gantries,ladders etc to such as the London fire brigade, recently acquired Collins Youldon manufactures hose reels, cable drums and related products supplying both the fire and the vehicle tanker industries.

It is perhaps the Todd Research acquisition late last year, however that provides a little bit more 'glamour' (not too hard!)! They have available two new products that can detect explosives in hand luggage:
TR VETOCH, a handheld device which will alarm for flammable liquids
TR DETECTOR 7 DETEX, an X-ray conveyor unit, which is the world's only hand baggage unit that can detect explosives to the approved EDS standard:

EDS stands for Explosive Detection Systems is part of an internationally agreed set of security standards and is adopted by Chinese, US Homeland,and EU (including of course UK) authorities amongst many others.

Given the recent raising of terror alerts, that is where the greatest potential lies I think.

To the chase then:
Last results showed:
Turnover has increased by 25% to 4.905 million (2005: 3.925 million)
Profit Before Tax has risen to 358,000 (2005: 109,000)
Basic Earnings Per Share of 7.0p (2005: 2.8p)
Earnings Per Share adjusted for goodwill amortisation 10.6p (2005: 6.3p)
Cash generated from operations 774,000 (2005: 487,000)
Proposed dividend of 2 pence per share
Net asset value increased to 80 pence per share (2005: 71 pence).

Since then, the last acquisition - Collins Youldon, looks for all the world as though it was cheap:
consideration is 912,000'. In the year ended 30th June 2005 Collins Youldon reported turnover of 2,752,000 with adjusted pre-tax profit of 320,000. In the Management Accounts for the 10 month period to the 30th April 2006 the turnover was 2,412,000 with an adjusted pre-tax profit of 285,000.'

I'm afraid my suspicious mind wondered why it was so cheap. The current numbers above don't point to growth certainly, but neither a depressed order book. only time will tell but the company seem in upbeat mood. At the AGM last month the Chairman said:

'Tim Wightman, Chairman of Asfare, commented: 'I have been greatly encouraged by recent events at Asfare. Our results to the financial year ended 31 March 2006 provided evidence of a strong second half of trading and the momentum has continued into the current financial year with the announcement of two significant orders and the key acquisition of the Collins Youldon business. This increase in orders and expansion of the business provide the Board with growing confidence in the outlook of the business.'

Since then another five year contract win has been announced.

Of course as with any four million market cap business there must be question marks and risks. I have chosen to ignore the adjusted higher eps of 10.6p which discounts options etc which are exerciseable above the current shareprice and in my view make that figure too optimistic.

Also a note in the accounts caught my eye, re the Todd acquisition, the amount of which is uncertain at this stage (performance dependent):
There is a potential further 2,080,000 of contingent
consideration. This has not been included in goodwill as the Board considers that the outcome of this can not be reliably measured at this time." I rather think that should be included in calculations, and there are some intangibles, the worth of which I am not a great believer in, on the balance sheet.

That said, the company does appear to have an interesting niche as well s potentially strong growth from the Todd division, and with historic eps of 7p the p/e is below 12.

However Digital Look have forecasts of 17.6p and 22.6p for the next two years and an arguably very likeable peg of 0.11. Even if these targets are wildly missed, say 10p and 15p, the shares look very promising and I have been accumulating and humbly recommend them for your further research!

Chart doesn't inspire and this is not a trading stock, but a long termer.

www.asfare.com
www.toddresearch.co.uk
www.collinsyouldon.com

Helle Partridge, nice to get a reply, take your point about currency, but I actually think they needed exposure to European markets which the (long established) Collins Youldon offers them.

I don't think there is such a thing as a no-risk sub 5 million market cap company (not one I know of anyway, but very open to suggestions! -:) ) and this seems a lot better than most in that category I have looked at.

Thanks Hawick - as always an interesting and worthwhile company. Checked it out on Hemscott - the eps forecasts are huge. Also it pays a dividend! Might dip my toe in with this one, tho as a microcap it will be hard to get out of if things go pear-shaped.

By the way am still hanging on to mY HMS

I like CLL, TIK, BDI

Flattery Beaufort - cheers though! -:)
ironically before coming across your post today, after the results from HMS I have held onto 2/3 of mine and added to ASF - my fourth tranche. Fair point about illiquidity but sometimes you have to go with your belief in a company and ASF certainly fits the bill for me. Not holding my breath on the eps forecasts for ASF but still do expect strong further growth and anything under 100p seems to me a great risk/reward.

Today's comments from HMS do i think put some pressure potentially on their finances but keepng the remainder of my holding and their strong growth, market position and recent commissioning of a new vessel mean I would not like to miss out on what I think will be a further exciting ride.

Are we heading for a re-rating up 13% today, and a buy 5p above offer augurs well for more near term.

Nudging 12 month high and now 100p on bid. Still cheap imho, with historic eps 7p and 12 month contributions from profitable acquisitions still to show through.

Seems to have caught the imagination of a few! Cracking breakout recently and rumour of a tip in City Confidential yesterday, (virtually doubled now since first post), might explain volume increase last two days if true.