Quality UK Investment Blog
01 January 2019
By Maynard Paton
Happy New Year!
I trust you enjoyed the festive break and are now raring to do battle with the market for another twelve months!
This first Blog post of 2019 provides a ‘year in review’ of my current portfolio holdings. I recap how each of the underlying businesses performed during 2018, as well as provide a few remarks about valuation.
15 November 2018
By Maynard Paton
Update on Castings (CGS).
Event: Interim results for the six months to 30 September 2018 published 13 November 2018.
Summary: CGS’s results were acceptable but contained several irritating drawbacks. In particular, a recovery at the engineer’s troubled machining division has been seemingly postponed for two years. Furthermore, management has now downgraded customer demand from “strong” to “steady”. Oh, and a depreciation review inflated group profit by 10%. CGS does have strengths — not least its cash pile and dividend history — but I suspect the firm’s stalled earnings will keep the shares marooned for now. I continue to hold.
15 June 2018
By Maynard Paton
Update on Castings (CGS).
Event: Final results for the twelve months to 31 March 2018 published 13 June 2018
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.
01 January 2018
By Maynard Paton
Happy New Year!
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.
10 November 2017
By Maynard Paton
Update on Castings (CGS).
Event: Interim results for the six months to 30 September 2017 published 10 November 2017
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.
14 June 2017
By Maynard Paton
Quick update on Castings (CGS).
Event: Annual results for the twelve months to 31 March 2017 published 14 June 2017
Summary: A lack of work at CGS’s smaller machining division meant these annual figures were the engineer’s worst since 2011. Thankfully there were no worrying omens for 2018 — the group’s order book apparently remains “steady” while the second-half performance even showed some promise. The hefty cash pile and a resilient dividend continue to be shareholder centrepieces, and talk of “robotic handling” suggests margin improvements may be on the way. My P/E of 13 does not indicate a bargain and I continue to hold.
01 January 2017
By Maynard Paton
Happy New Year!
I trust you enjoyed the festive break and are now raring to do battle with the market for another twelve months!
This first Blog post of 2017 provides a ‘year-in-review’ of my current portfolio holdings. I recap how each of the underlying businesses performed during 2016, as well as provide a few remarks about valuation.
As I mentioned this time last year, I find writing such reviews extremely useful — not least because it encourages me to double-check my investment logic to ensure I am still invested for all the right reasons!
11 November 2016
By Maynard Paton
Quick update on Castings (CGS).
Event: Interim results for the six months to 30 September 2016 published 11 November 2016
Summary: Earlier statements had already signalled lower earnings for 2016/17, and these results were in fact CGS’s worst first-half figures for six years. The engineer still reckons lost work can be replaced, but the immediate outlook remains stagnant at best. The upcoming retirement of the chief executive brings some further uncertainty, too. Still, I don’t think good companies become bad companies overnight and the group’s long track record suggests a recovery will one day arrive. I continue to hold.
15 June 2016
By Maynard Paton
Quick update on Castings (CGS).
Event: Annual results for the twelve months to 31 March 2016 published 15 June 2016
Summary: A quite satisfactory set of results from the country’s largest foundry operator. Revenue, profit, the dividend and net cash all headed in the right direction, while a shareholder bonus was news of a 30p per share special payout. However, counter-balancing the 2016 figures was the admission of less work at the higher-margin machining division, which will hurt 2017 progress. Still, the shares do not appear expensive and I continue to hold.
01 January 2016
By Maynard Paton
Happy New Year!
I trust you enjoyed the festive break and are now raring to do battle with the market for another twelve months!
This first Blog post of 2016 provides a short ‘year-in-review’ of each of my current portfolio holdings.
As I mentioned at the start of 2015, I find writing such reviews extremely useful — not least because it encourages me to double-check my investment logic to ensure I am still invested for all the right reasons!
13 November 2015
By Maynard Paton
Quick update on Castings (CGS).
Event: Interim results published 13 November
Summary: Just what I like — a concise set of results that reports steady progress and robust financials. In fact, I could not find anything to complain about, with revenue up, profit up, cash up, the dividend up, plus the prospect of further growth during the second half. What’s more, the share price does not look that expensive. I continue to hold.
23 October 2015
By Maynard Paton
Today I’m revealing my latest share investment.
The company in question is Castings (CGS), a long-established iron castings and machining group that’s based in the Midlands.
You may recall that, back in September, I added Castings to my watch list.
Well, after mulling over that write-up, I then bought in at an average price of 426p including all costs. The bid price is now 440p and the holding currently represents about 8% of my portfolio.
When I invested, I felt this £188m firm offered many traits of a respectable investment.
Important attractions for me included a durable dividend, an asset-flush balance sheet, improving productivity, good-value management and an upbeat immediate outlook. What’s more, a possible P/E of 11 suggested the shares were priced quite modestly.
However, I recognised CGS was by no means a one-way bet. Obvious risks include serving a small number of large customers and a recent profit history that has seen its ups and downs.
04 September 2015
By Maynard Paton
Today I’m continuing my hunt for Watch List shares with a look at Castings (CGS).
Here are the initial attractions that prompted this research:
Respectable financials: The accounts showcase a dependable dividend, net cash and property assets
Straightforward management: The executives do not collect grandiose wages nor own any options
Interesting valuation: The shares could offer a possible P/E of 11
As usual, I’m applying a question-and-answer template to help me pinpoint companies that match the criteria set out in How I Invest. I’m looking for as many Yes answers as possible.
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