finnCap Tech Chat | The ferret of disorder

One wonders what we are going to most remember from such a tumultuous year as 2022; the last throes of lockdown back in January; War; inflation; the death of Her Majesty and a new King; or the missed opportunity to properly celebrate the 25th anniversary of the Spice Girls seminal album, Spice World (and the film of the same name), so overlooked in all the goings-on of the moment. 

Spice World the Movie included an extraordinary cast of cameos: Stephen Fry, Bob Hoskins, Elvis Costello, Richard Briers, Alan Cumming, Barry Humphries, Jonathan Ross, Jennifer Saunders, Peter Sissons, Jools Holland, Richard O’Brien, Meatloaf, Hugh Laurie, Bob Geldof, Elton John and even Peter Crouch – but a particular quote of the movie was delivered by Roger Moore’s character, the mysterious Blofeld-like “Chief”: “the headless chicken can only know where he’s been. He can’t see where he’s going”.  The current environment does tend to encourage the headless chicken in us all, but we perhaps simply need time to adjust – or look more closely.  

Monarchs change: in 1936, the United Kingdom could not have guessed it would have three kings within the year.  Interest rates have been historically unnaturally low: the Bank Rate in January 1980 opened at 17% and dropped to 7.38% in 1988, before exiting 1989 at 14.88%; in the 90s it fell progressively to 5.5%. FX moves: the pound was worth, on average, $2.33 in 1980; $1.78 in 1990; $1.52 in 2000 but $1.55 in 2010. Constant currency is a recent phenomenon. We’ve had pandemics before (and I still don’t understand why they don’t play more of a part in our collective memory: the Spanish ‘flu and polio were much more recent than the plague yet seem to have provoked no folk legend). We must remember how to adapt to new environments. 

Stocks in our current new environment will still thrive on our perennial maxim, that death, taxes, and regulatory compliance are the inevitabilities of life. Look at what PE has sniffed round: Ideagen, acquired; GB Group, almost bid for. They’re not hunting for bargains, they don’t tend to: they’re hunting for ideas which should run and run. 

This week, amongst others, we’ve met Tracsis (TRCS-GB) and 1Spatial (1SPA-GB).  Tracsis is a British champion which has matured before our eyes, morphing from a one product stock to a giant of the British, and increasingly international, Rail industry. This week’s CMD shed more light on the various rail-focused divisions, acknowledging they are also applicable beyond rail; and the demo videos will be available on www.finnCap.com/Tech-hub next week. 1Spatial has carved its own niche within the increasingly fashionable area of geospatial software: a sector where IQGeo (IQG-GB) is also delivering impressive global expansion organically and through acquisition; IDOX (IDOX-GB) has acquired in geospatial; Tracsis has acquired in geospatial. 1Spatial has made serious inroads with a US specific “911” product which is showing tremendous traction; while elsewhere delivering an instant solution for, for example, those companies involved in adhering to roadworking regulation in the UK.  Given the amount of roadworks we seem to perpetually suffer, there are clearly prospects there. Geospatial and compliance? Double tick. All of those stocks have firm bases for convincing investment cases.  

Roger Moore’s most (single) eyebrow raising Spice World quotes in the role of “Chief” were: “when the ferret of disorder runs through the fields of anarchy, it is time to hang your pants on the hook of darkness. Whether they’re clean or not.” Or, “when the speeding melon hits the wall, it’s Christmas for crows”. While the quotes are opaque, it's still possible to see the decent investment cases in this uncertain environment.  

Happy Friday