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The Shifting Shares review of this year’s Growth and Innovation Forum (Part 2/2)

I attended the Growth & Innovation Forum the Business Design Centre in Islington last week.

The event was fairly well attended, with many familiar faces and private investors appearing.

Over 30 companies were there, along with ShareSoc, with the companies doing their best to recruit new shareholders and get their message out.

Towards the end of last week, I reviewed several companies in attendance at the event, including TClarke (LSE:CTO), Shearwater Group (LSE:SWG), and Ixico (LSE:IXI).

Here, in this concluding article, I review another handful of businesses:

Open Orphan (LSE:ORPH)

In attendance was Cathal Friel and Open Orphan – who then went on to deliver the webinar on ValueTheMarkets (you can watch a recording here).

I do not hold stock here, but I am watching the story with increasing interest – Cathal has put his neck on the line here with some big investment, and he intends to roll up a bunch of companies and sell it on to a large one. With management locked in for three years they want to get it done sooner!

Seeing Machines (LSE:SEE)

This stock has been incredibly popular with private investors and even institutions in the past. The story is highly captivating – the technology watches drivers’ faces and alerts them if they are tired or distracted. Proven to reduce accidents by around 90%, the value proposition is clear.

However, like any growth company, there are always a few spanners in the works. The stock has done a yoyo-like move over the past few years, but perhaps we could be at the beginning of a new rise with all of the regulatory aspects moving in Seeing Machines’ favour.

(All charts taken from SharePad)

I do not hold this stock, but would not be averse to taking it out for another bag. It stays on the watchlist for that reason.

Escape Hunt (LSE:ESC)

Perhaps the most interesting company at the show was Escape Hunt. This trading statement piqued my interest, as revenues were modestly ahead of expectations.  Whilst I bet many shareholders were wishing they had certainly ‘escaped’ this IPO, things could be changing.

I had a very good chat to the CEO Richard and new CFO Graham Bird (of Gresham), and both felt that the business had now reached a turning point, and that there is a story to tell.

The firm does not have a moat, but then it also has little to no competition either. First mover advantage means that the company is able to grow and build up the monopoly board in various cities before any competition appears.

My opinion was that the games would need to be changed with regularity, thus eating away at margins as more investment is needed. But in the Birmingham site, the same game or games have been running for over two years, and yet the Birmingham site is still growing.

So, the model appears to be working, if management can get the right sites and grow this portfolio of units.

Let’s be frank here, nobody is going to be doing escape rooms forever. A few years ago, it was table tennis bars that were all the rage, at the moment it’s gimmicky crazy golf layouts, and perhaps escape rooms are going to take over.

But at a valuation of £4 million, the upside for the business is staggering. Whether management can deliver is another question. I currently hold no position at the moment, but will be digging into this further.

Velocity Composites (LSE:VEL)

This is another company that has seen better days. Management were of the opinion that the turnaround is now in place, with revenue and margins increasing. The company works with many Tier 1 producers and can count Airbus and Boeing as customers.

Where they see the potential for growth is in doing more work for their customers. Again, there is no moat, but these contracts are hard to get and once the company delivers to a high standard and keeps delivering, there is not much reason for them to change.

I do not hold here, and I would probably only ever trade it, but it seemed interesting. With a tiny market cap, this too is a company that could re-rate if execution is sound.

Author Michael Taylor’s website www.shiftingshares.com contains a number of tutorials on how to trade and invest as well as his free book – ‘How to Make Six Figures in Stocks’.

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