My Shares

[Podcast] BIOVENTIX With Roland Head And Maynard Paton

28 January 2023
By Maynard Paton

I have recorded a podcast with my good friend Roland Head. This time we talked about Bioventix, the antibody specialist that at the start of 2023 represented my largest shareholding. We discussed the wonderful economics of antibodies, information gleaned from the AGM and the research into testing for Alzheimer’s Disease: 

We cover: 

  • My 2016 purchase of Bioventix at £11 and the shares now representing 12% of my portfolio.
  • Roland buying Bioventix at £36 during 2021.
  • What antibodies are, how they work within blood tests and Bioventix’s range of diagnostic antibodies.
  • Bioventix’s financial track record and how antibody royalties support incredible margins.
  • Bioventix’s laboratory, customers and industry competition. 
  • How successful diagnostic antibodies can earn royalties for more than 20 years.
  • An example of a new diagnostic antibody dislodging an established diagnostic antibody. 
  • Bioventix’s lack of visibility on what hospitals pay for blood tests, the volumes of antibodies being used and what customers use antibodies for.
  • Bioventix’s superb dividend record.
  • AGM protest votes and boardroom diversity.  
  • Industrial pollution R&D, barbecued sausages and a low spreadsheet value.
  • Alzheimer’s R&D and a new treatment for the disease. 
  • The academic publication covering antibody test results at the University of Gothenburg. 
  • The potential income from Alzheimer’s testing being a “2030s thing“. 
  • Bioventix’s investments, further Alzheimer’s research and future growth rates.
  • The dependence on vitamin D testing and other shareholder risks.
  • How the £40 shares appear on a dividend basis and possible future returns.
  • Reasons to sell Bioventix and concluding thoughts.

Extra links:

Happy listening!

Maynard Paton

PS: The AGM was held on 8th December 2022 and the podcast was recorded on 26th January 2023.

Disclosure: Maynard owns shares in Bioventix.

TRISTEL: Pandemic-Disrupted FY 2022 Reiterates Reassuring 10-15%/Year Sales-Growth Ambition As US Regulatory Approval Now Relies Upon FDA ‘Negotiation’ Over Product Batches

12 January 2023
By Maynard Paton

Results summary for Tristel (TSTL):

  • Another pandemic-disrupted performance, although 10-15% per annum sales-growth guidance suggests hospital customers will soon resume normal purchasing activity.
  • Progress was complicated by an accounting U-turn, with Brexit stock-piling, share options, US costs and write-offs creating a wide range of profit outcomes.
  • Management webinar comments suggested a positive US regulatory verdict is dependent on a “negotiation” with the FDA concerning data tests using different product batches. 
  • A useful 17% operating margin, net cash of £10m, worthwhile cash conversion and low capital requirements imply the group’s disinfectants still enjoy favourable economics. 
  • An estimated 24x P/E for FY 2025 is not an obvious bargain, but a premium rating may be justified by a US product approval and hefty royalties appearing soon thereafter. I continue to hold.

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My Portfolio: Year In Review 2022

01 January 2023
By Maynard Paton

Happy New Year!

I trust you enjoyed the festive break and are now ready to battle the market for another twelve months!

This 4,680-word post provides a ‘year in review’ of my current holdings. I recap how each business performed during 2022 as well as provide a few remarks about valuation. 

These reviews are very useful to write, not least because they help ensure I am still invested for the right reasons. Any upsets I will suffer during 2023 will most likely be caused by the shares I already own rather than any new shares I will buy.

I undertook the same annual review at the start of 2015, 2016, 2017, 2018, 2019, 2020, 2021 and 2022.

My portfolio lost 23.3% during 2022. This other post explains that performance in more detail and clarifies how my portfolio begins 2023.

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[Podcast] CITY OF LONDON INVESTMENT With Mark Atkinson And Maynard Paton

24 November 2022
By Maynard Paton

I have recorded another episode of The Private Investor’s Podcast with my good friend Mark Atkinson. We discussed City of London Investment (CLIG) and my recent share purchase, my AGM attendance and the company’s 9% dividend yield: 

We cover:

  • My recent CLIG purchase and history of ownership.
  • A lack of capital gains, but superb dividends.
  • Where CLIG stands in my portfolio now.
  • How does CLIG invest for its clients?
  • My attendance at the AGM and previously receiving a letter from CLIG’s founder.
  • Major shareholder George Karpus and his future plans.
  • The performance of Karpus Investment Management following the merger.
  • CLIG’s regular client income, but fees are being squeezed.
  • Employee remuneration versus client returns.
  • The share-price KPI and potential double-digit returns.
  • CLIG’s investment team approach and employee retention.
  • History of funds under management and recent client-money inflows.
  • The S&P 500, institutional ‘allocators’ and portfolio ‘buckets’.
  • The attractions of emerging markets and potential for outperformance.
  • Private investors holding CLIG and liking cash-rich income stocks.
  • The 9% yield, valuation comparison with Liontrust and closing thoughts.

Extra links:

Happy listening!

Maynard Paton

PS: The AGM took place on 31st October 2022 and the podcast recording took place on 21st November 2022.

Disclosure: Maynard owns shares in City of London Investment.

BIOVENTIX: Exceptional H2 Profit (+30%) Plus Promising Biotins Sales (+67%) Support Better-Than-Expected FY 2022 And 7th Consecutive Annual Special Dividend

22 November 2022
By Maynard Paton

Results summary for Bioventix (BVXP):

  • A somewhat better-than-expected FY performance, with record revenue and earnings supported by an exceptional H2 profit (+30%) that was bolstered by a post-pandemic recovery and stronger USD.
  • Encouraging sales progress from best-seller vitamin D (+13%), future big-seller troponin (+81%) and sudden surprise-seller biotins (+67%) more than offset lost income from an expired product. 
  • Tweaks to management’s commentary plus a revised pipeline grid suggest the development work on dementia research now offers a greater chance of becoming a real money spinner.
  • The accounts remain in great shape, with an astonishing 82% H2 margin, terrific employee productivity and robust cash conversion leading to the company’s seventh consecutive annual special dividend.
  • Troponin’s finite income and a basic sum-of-the-parts valuation may explain why the £36 shares have not made headway during the last three years. I continue to hold.

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M WINKWORTH: Yield Approaches 7% Despite Acceptable H1 2022, Quarterly Dividends Lifted 23% And Confidence Towards £2m Profit Forecast 

04 November 2022
By Maynard Paton

Results summary for M Winkworth (WINK):

  • An acceptable H1 performance that would always struggle against the comparable (and exceptional) H1 but encouragingly matched the preceding H2.
  • The subsequent Q3 update provided reassuring ‘mini-budget’ commentary, reiterated an earlier £2.1m profit forecast and announced a further 23% quarterly dividend lift.
  • Claims of a leading SSTC market share may contradict statistics from Foxtons, with fresh leadership at the London rival set to create stiffer competition. 
  • A robust 25% margin plus £4m net cash left the accounts in good order, although cash conversion was impacted by rising intangible expenditure and more franchisee loans.
  • The gloomy outlook for the economy and housing market looks responsible for the possible 10-13x P/E and yield that approaches 7%. I continue to hold.

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[Podcast] SYSTEM1 With Mark Atkinson And Maynard Paton

23 October 2022
By Maynard Paton

I have recorded another episode of The Private Investor’s Podcast with my good friend Mark Atkinson. We talked about System1 and the investment potential of testing adverts:

We cover:

  • My fourth System1 AGM and my share purchases.
  • What the company does: testing television adverts and marketing ideas.
  • ‘System 1’ and ‘system 2’ thinking within broadband adverts.
  • Validation of the company’s service through the partnership with ITV.
  • The transition from ad-hoc consultancy work to automated data services.
  • The competitive advantage gained through years of accumulating advert data.
  • The chairman’s handling of the AGM.
  • Microphones, voting cards and special lunches. 
  • AGM formalities and Section 319A of the Companies Act.
  • Protest votes against two non-execs and the strategic review. 
  • The company’s podcast becoming a sales tool.
  • Mark’s verdict and closing remarks.

Extra links:

Happy listening!

Maynard Paton

PS: The AGM took place on 28th September 2022 and the podcast recording took place on 21st October 2022.

Disclosure: Maynard owns shares in System1.

CITY OF LONDON INVESTMENT: H2 2022 Profit Drops 20% And FuM Slides To $8.5b Although Yield Now Tops 8% And Run Of Net Inflows Extends To 4 Quarters

21 October 2022
By Maynard Paton

Results summary for City of London Investment (CLIG):

  • Rough market conditions causing funds under management (FuM) to fall 17% to $9.2b led to H2 net fee income dropping 5% and H2 profit diving 20%.
  • A post-year update showed FuM sliding a further 8% to $8.5b, but also the fourth consecutive quarter of net FuM inflows that may signal clients re-appraising CLIG’s ‘value’ approach.
  • Buying SPACs at discounts to cash helped merger partner KIM outperform the original CLIM division with 6% five-year annualised returns versus 3-4%.
  • Revenue “100%” denominated in the stronger USD, handy cash conversion plus net funds and investments of £30m counterbalanced an H2 margin squeezed to ‘only’ 42%.
  • Near-term earnings could now be running at 36p per share, which should still support the 33p per share dividend and 8%-plus yield at 400p. I continue to hold.

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SYSTEM1: £100m Revenue Ambition Disappears Following Disappointing H2 Loss As Tender Offer Cancelled And Agitated Shareholder Initiates Strategic Review

24 September 2022
By Maynard Paton

Results summary for System1 (SYS1):

  • A disappointing FY 2022 performance, with a Q4 sales warning alongside greater costs leading to a small H2 loss.
  • SYS1’s ‘Reasons to Believe’ have been diluted, and hint at reduced long-term expectations following the disappearance of a £100m revenue ambition.
  • The transition to new data and consultancy services continues, with such income representing 51% of total revenue for FY 2022 and possibly 70% for Q1 2023.
  • A fresh non-exec reveals the agitated shareholder who has initiated a strategic review, which in turn led to the sensible cancellation of a tender offer.
  • Net cash represents 31% of the market cap, with long-term multi-bagger potential presently obscured by weak legacy services and costs running ahead of new-product revenue. I continue to hold. 

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MOUNTVIEW ESTATES: Estimated NAV At £210 Per Share After H2 2022 Shows Average Sale Reaching £379k To Realise 66% Premium Over Allsop Valuation

02 September 2022
By Maynard Paton

Results summary for Mountview Estates (MTVW):

  • A steady FY 2022 performance, buoyed by an H2 that saw property sales achieve a record £379k average and realise a 66% premium to their 2014 Allsop valuation. 
  • The final dividend was lifted 11% while expenditure on new properties fell to a 13-year low after management expressed a desire to “not chase purchases at any price“.
  • Net debt remains very modest at just 5% of the property estate and reflects management’s concerns of forthcoming “difficult economic circumstances“.
  • Friction between major shareholders continues, with revised director-pay arrangements perhaps encouraging significant protest votes at the latest AGM.  
  • Net asset value remains at £101 per share, although the balance sheet could be worth £210 per share assuming all owned properties enjoy immediate ‘reversionary’ gains and are then sold at fair-market value. I continue to hold.

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BIOVENTIX: H1 2022 Reveals Dividend Up 21% And ‘Exciting’ Tau Biomarker Although Cash At 6-Year Low Now Reduces Special-Payout Prospects

26 August 2022
By Maynard Paton

Results summary for Bioventix (BVXP):

  • An unspectacular H1 performance, albeit accompanied by a 21% dividend lift, after further pandemic disruption left revenue down 8% and adjusted profit down 9%.
  • Muted progress from vitamin D and other established antibodies continues to leave near-term growth dependent on the fast-selling troponin product. 
  • The “exciting” potential of a Tau biomarker alongside the BVXP website selling pyrene test kits suggest positive developments within the research pipeline.
  • Net cash at £5m is the lowest for six years, and combined with standstill earnings seems likely to reduce the size of any FY 2022 special payout.
  • Troponin’s finite income and a resultant sum-of-the-parts valuation do not indicate an obviously compelling £33 share price. I continue to hold.

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ANDREWS SYKES: FY 2021 Discloses UK Hire Revenue Rebounding 17% To Deliver 34% Margin While Dividend Yield Remains Near 5% Despite Potential FY 2022 Heatwave Bonanza

18 August 2022
By Maynard Paton

Results summary for Andrews Sykes (ASY):

  • An encouraging performance, with profit recovering 35% following the pandemic to almost match the record set during FY 2018.
  • Additional reporting disclosures revealed ASY’s main UK Hire division enjoyed sales rebounding 17% and a wonderful 34% margin.
  • European operations expanded to 27% of group revenue following very strong progress, although Middle Eastern woes included an extra £1m provision. 
  • The books remain in good shape, with useful cash generation lifting net funds to £29m and perhaps increasing the possibility of another special dividend. 
  • An estimated 13-14x P/E and near-5% yield hardly seem expensive given the appealing financials, potential for an FY 2022 heatwave bonanza and scope for further European expansion. I continue to hold.

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TASTY: £8m Market Cap Could Still Be Remarkably Cheap After FY 2021 Reiterated 5-6 New Restaurants Despite ‘Prevailing Economic Uncertainties’

04 August 2022
By Maynard Paton

Results summary for Tasty (TAST):

  • The absence of pandemic restrictions ensured a bumper H2 performance that TAST acknowledged may not be repeatable during the current year.
  • Higher wages, rising utility costs, “prevailing economic uncertainties” plus a June update that did not refer to H1 trading could be other signs of FY 2022 not being that profitable.
  • Rent reductions of 27% now appear to be temporary, and explain why total lease obligations remain in excess of £50m.
  • Repaying an emergency loan, appointing a new executive alongside plans to open 5-6 new restaurants confirm management’s mindset has moved from ‘survival’ to ‘recovery’.
  • Although the £8m market cap could be remarkably cheap if TAST ever sustains a modest margin on decent sales, other shares could offer more dependable returns. I continue to hold.

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FW THORPE: Record H1 Results Reveal Thorlux Orders Up 25% And Another Special Dividend As Companies Scramble For Energy-Efficient Lighting

01 August 2022
By Maynard Paton

Results summary for FW Thorpe (TFW):

  • A record H1 performance bolstered by the acquisition of Spanish firm Zemper and complemented by another special dividend.
  • Progress at Thorlux continues to be modest, but a new MD, an order book up 25% alongside growing demand for energy-efficient lighting support future optimism.
  • Dutch profit was assisted by the absence of earn-out provisions, with new manufacturing facilities at Famostar underpinning “continued rapid sales growth“. 
  • Net cash remained significant at £37m after extra stock investment suggested component shortages were no longer as severe as they once were.
  • A P/E of 27 seems generous, but could reflect significant ‘ESG’ attractions as TFW showcases its environmental credentials to quoted companies scrambling for LED lighting. I continue to hold.

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[Podcast] TRISTEL With Mark Atkinson And Maynard Paton

27 July 2022
By Maynard Paton

I have recorded another pilot episode of The Private Investor’s Podcast with my good friend Mark Atkinson. We talked about Tristel and the company’s hospital disinfectants and shareholder open day: 

We cover:

  • 0:00 Tristel’s open day and when we invested.
  • 1:31 Tristel’s business and disinfection chemistry.
  • 3:00 Tristel’s revenue and profit.
  • 5:56 The price I purchased and when I started selling.
  • 7:01 The latest trading update and the potential for US growth.
  • 12:51 The different products Tristel offer.
  • 16:21 Debtors and product restructuring. 
  • 18:26 The shareholder open day.
  • 20:90 High gross margins.
  • 21:92 Patent expiries.
  • 23:44 The CEO, CFO and the non-execs.
  • 26:24 A buy, hold or sell?
  • 29:41 Closing remarks.

We may record more podcasts if sufficient interest is shown.

Happy listening!

Maynard Paton

PS: Tristel’s open day took place on 18 July 2022 and the recording was made on 25 July 2022.

Disclosure: Maynard owns shares in Tristel.