Summary: Bumper first-half figures and subsequent monthly updates had already ensured the fund manager’s summary annual results would be positive. However, the second half did witness funds under management decline and the group’s own projections for the coming year have now been reduced. In addition, client fees have been cut once again while the main emerging-market strategy continues to underperform. I still hope that, one day, this cash-rich, high-margin business can attract meaningful new mandates to spark a share-price re-rating. Until then, a 6.8% income remains available. I continue to hold.
Summary: The commercial property group once again left its numbers to do most of the talking, as new all-time highs for revenue, net asset value and the dividend were accompanied by only two paragraphs of management commentary. A bonus this year was US tax changes adding £40m to the balance sheet, which now stands at £111 per share and continues to dwarf the £64 share price. Conservative borrowing levels, veteran family management and an illustrious track record remain the foundations of this investment, and, in theory at least, a 14% earnings yield is available, too. I continue to hold.
Summary: Earlier this week I attended TSTL’s third annual open day, and this year the event was accompanied by news of hefty director selling as well as confirmation of record revenue and profit. The chairman has reduced his shareholding from 19% to 15%, and confirmed he is looking to sell more during the next few years. The marquee presentation did not provide any great revelations, but one slide did show a useful sales comparison between the UK and overseas, while another slide suggested full-year sales of the group’s ‘core’ disinfectants had just advanced an impressive 18%. I continue to hold.
Summary: This RNS was more interesting for the management comments — all 626 words — than the actual 2018 financials. Indeed, MTVW’s chief exec is probably the first-ever boss to tell shareholders their business has a “finite life” and had essentially operated in an ex-growth market for 30 years. Hardly inspirational stuff… until you realise the dividend was lifted 33% and has now grown 47-fold during the last three decades. Mind you, this property-trading specialist will at some point have to call it a day — and dissolve an estate that could be worth almost double the current share price. I continue to hold.
Summary: These results came in below the engineer’s earlier expectations — but the performance did not appear too bad in the circumstances. Although CGS’s smaller machining division continues to lose money, its problems now look to be contained. Meanwhile, the larger foundry operation seems to be progressing well following a decent second half. A hefty cash position and the illustrious dividend remain key attractions, but the P/E of 13 does not suggest an immediate bargain. I continue to hold.
Summary: A series of poor updates had already heralded what SYS1’s founder described as a “miserable” performance. However, shareholders did receive a candid explanation of what went wrong — with a Warren Buffett-backed bid to buy Unilever taking some of the blame. However, a greater concern is whether SYS1’s pioneering market-research techniques remain that pioneering — the competition is apparently catching up. A lot now rests on whether SYS1’s founder has the ability to lead another recovery. I continue to hold.
Summary: These results were quite satisfactory, although sadly the record figures I had hoped for did not entirely come through. Indeed, after a bumper first half, I note the second half could only match last year’s H2. Nevertheless, I was pleased the specialist hire group did not have to rely on “significant extremes in climatic conditions” to stimulate extra demand for its air conditioners, heaters and pumps. Meanwhile, margins remain high at 24%, net cash has grown to a hefty £20m and a 14x cash-adjusted P/E does not seem that excessive. I continue to hold.
Summary: Yet again the recruitment software developer delivered results that warned of greater costs and lower client fees. However, this statement was also accompanied by details of a company rebranding — which seems a complete joke project to me. Instead, management really should be addressing why the firm looks to have lost its largest customer. I have sat on a 35% loss here for three years now, and have been taught a tough lesson about illiquidity. Sadly I continue to hold.
Summary: The London estate-agency group was never going to issue stunning figures. Nonetheless, a credible performance was reported and I am impressed the business continues to fare well against sector rival Foxtons. Note, too, that WINK’s average percentage commissions actually increased — so perhaps online competition is not that big a threat after all. Meanwhile, the books remain cash rich, the outlook does not seem too bad while the 10x multiple and 6% yield appear modest. I continue to hold.
Summary: These results from the car-loan specialist once again provided an investment dilemma. True, shareholders received yet another respectable progress report from the accomplished executive team. However, the finer details showed potential bad debts soaring 59% — which was double the growth rate of revenue and customer advances. The chairman is set to make some ‘sensible gear changes’ to keep a lid on potential bad debts, but until the changes become evident, the share-price multiple could be stuck at 13. I continue to hold.
Summary: The antibody specialist delivered another set of impressive results. I had been concerned about a possible ‘revenue gap’ emerging this year following the termination of certain product income. However, these concerns have now diminished — BVXP’s other sales still seem to be growing fast (I estimate at 30%) while management has become more confident about the early contribution from the new troponin product. The group’s financials remain top class and could even be improved if all of the royalties were collected on time. The 25x multiple is understandable, and I continue to hold.
Summary: MCON’s subdued years of 2014, 2015 and 2016 now seem long forgotten after the mining-drill manufacturer confirmed a bumper set of 2017 numbers. Greater client activity has now fuelled director talk of “significant opportunities” and “the first year of the current upturn”, and the share price has naturally climbed to a premium level. Meanwhile, the accounts remain cash-rich, several factors may be suppressing certain ratios, and even the standstill dividend has been lifted. I continue to hold.
Summary: These first-half figures actually set new H1 records, but they also confirmed TFW’s good run of double-digit profit growth will pause during 2018. Pressure on prices for tunnel lighting was cited as one reason for the pedestrian performance. Should revenue and profit continue to plateau, the elevated share price — rated at 22x my earnings guess — may be at risk of a de-rating. Still, the lighting specialist remains a very respectable business, and continues to be led by directors that think long term. I continue to hold.
Summary: Phew! I had thought TAST’s plunging share price was signalling these results would be accompanied by an emergency equity placing. As it turns out, the beleaguered restaurant chain continues to report a profit and has surprised me by raising £4m — equivalent to half of its market cap — from two property transactions. Furthermore, management now have a proper turnaround plan in place, the second half showed a few glimmers of hope while the upside could be considerable if a recovery ever occurs. I have bought more shares, both before and after these results.
Summary: A change of year end, various exceptional items, the effect of an acquisition and the company’s own ‘cost base’ definition meant studying these numbers was not straightforward. However, it was clear the geoscience software specialist has returned to profit, while it was also obvious the new boss remains confident about the group’s competitive attractions. Looking ahead, I am still hoping some encouraging revenue talk alongside tight cost controls could one day lead to much higher earnings and decent share-price upside. I continue to hold.
Summary: These first-half figures were slightly better than I had expected, with December’s AGM statement having downplayed the group’s underlying progress. Welcome revenue advances — both in the UK and abroad — were delivered by TSTL’s main disinfectant products, while adjusted profit would have soared 24% were it not for the costs of entering North America. Sadly it remains anyone’s guess as to when those costs will eventually see any payback. Nonetheless, the first North American milestone is looming — an EPA product approval decision is expected on 16 April, and the share price is optimistic. I continue to hold. Continue reading →
Summary: Favourable market movements helped CLIG report its best-ever first-half figures, with revenue, profit, net cash and the dividend all moving higher. However, the finer details showed the emerging-market fund manager struggling to capture new clients as its main strategy under-performed. Meanwhile, fee rates are still being chipped away and staff costs keep on climbing. The shares may look under-appreciated on a P/E of 10 and yield of 6%, but sadly a re-rating does not appear imminent. I continue to hold. Continue reading →
I trust you have enjoyed the festive break and are now raring to do battle with the market for another twelve months!
This first Blog post of 2018 provides a ‘year in review’ of my current portfolio holdings. I recap how each of the underlying businesses performed during 2017, as well as provide a few remarks about valuation.
Summary: From what I could tell from the chairman’s 216-word update, DJAN has had to work hard of late to achieve somewhat modest progress. Currency movements and Brexit apparently kept a lid on this H1 performance, although NAV still managed to creep to a £103 per share all-time high. Dull updates from low-profile businesses often cause share prices to stagnate, and so I’m not too surprised the property group’s discount to book has widened since I first bought during 2015. I now wonder whether I should buy once again. I continue to hold. Continue reading →
Summary: It took MTVW’s chief exec just 265 words to describe the group’s weakest first-half performance for four years. Still, the nature of this property-trading firm means earnings can be somewhat variable from time to time. What is important, though, is that net asset value improved once again to a fresh high while debt continues to be reduced to a new low. My sums point to a possible NAV of £209 per share based on the firm’s long-term margin. I continue to hold. Continue reading →
Summary: This was another frustrating RNS from the specialist currency manager. The cost base has ‘inevitably’ increased, yet revenue and client numbers remain stagnant and — as usual — there’s no real sign of the business enjoying an upturn anytime soon. At least REC continues to generate cash, retains a robust cash pile and distributes a healthy dividend. The yield is 5%, which is not too bad in the current market. I continue to hold. Continue reading →
Summary: Last month’s statement concerning a review of CGS’s machining division had already braced me for worrying news. In the circumstances, this RNS was not too bad. Sure, the machining division has reported a loss and will cut back on certain projects. However, CGS’s main foundry operation appears to be performing very satisfactorily, with profit per tonne reaching a new high. I continue to hold. Continue reading →
Summary: These figures from the recruitment software developer were never going to be great. The overriding theme of the last three years — greater marketing and product investment — once again hit earnings and will continue to do so throughout 2018. The statement talked of some client-fee reductions, too. Still, at least overall revenue and the hefty cash position have both advanced to new all-time highs. Exactly when a profit revival will occur remains anyone’s guess — but I am hopeful the chief exec/71% shareholder will one day oversee a recovery. I continue to hold. Continue reading →
Summary: These results were never going to show a major turnaround, but glimmers of hope continue to emerge at the geoscience software specialist. In particular, a new chief exec has cut costs, reorganised the firm and spotlighted some of the company’s product attractions. True, minimal earnings are likely during the short term. But with the upbeat stock market making obvious buying opportunities hard to find, I am beginning to warm to GTC’s recovery potential. I continue to hold. Continue reading →
Summary: The marketing-services group had already alerted investors to these disappointing figures. However, the setback was explained honestly by management and I note 50% of the business continues to grow at a fair rate. So everything does not appear completely lost just yet. That said, adopting the tag of industry ‘pioneer’ will always court competition and it seems rivals have tempted some customers away. The share price has been thumped since the summer, but is now looking quite interesting. I continue to hold. Continue reading →
Summary: July’s trading statement from this medical disinfectants specialist had already signalled these record results. However, the update showed underlying revenue growth of just 7%, with the UK up 3% and overseas up 10%. I’ve therefore had to delve deep into the numbers to ensure TSTL’s main products continue to sell relatively well. At least the company’s accounts and recent acquisition showed more obvious appeal. I must confess, I am nervous comparing the share-price valuation against the medium-term expansion potential, especially with the prospect of sizeable North American revenue as distant as ever. I continue to hold. Continue reading →
Summary: The antibody specialist delivered another outstanding set of results, as astonishing margins, robust cash production and magnificent equity returns once again underlined the group’s wonderful economics. However, matters were tempered somewhat by management remarks about the immediate revenue potential of a new product. It could mean progress during 2018 won’t be very impressive, which may leave the current 29x multiple rather exposed. I’m hoping things work out for the best, and continue to hold. Continue reading →
Summary: I was very satisfied with ASY’s first-half progress. The specialist hire group reported positive performances both within the UK and overseas and could now be on course to deliver its best-ever annual results. A 20%-plus operating margin and substantial net cash remain key bookkeeping features, while management hints of an encouraging second half have kept the share price buoyant. I continue to hold. Continue reading →
Summary: These results displayed further “steady and sustainable” growth from the used-car loan firm. Although the seasoned executives remain optimistic about the group’s prospects and the wider economy, margins have dipped once again as the impairment charge representing potential bad loans continues to rise. Still, the 11-12x multiple appears modest given the company’s growth rate and there is a near-5% income, too. I continue to hold. Continue reading →
Summary: Yet again this lighting specialist has delivered a very satisfactory annual performance, with revenue and profit attaining fresh all-time highs and the dividend lifted for the fifteenth consecutive year. Although the group’s largest division appears to be performing very well, other subsidiaries did not enjoy the very best of second halves. Management comments about 2018 seemed quite cautious, too. The accounts remain in pristine condition, but I am mindful of the shares trading at a rich multiple. I continue to hold. Continue reading →