Category Archives: My Shares

Tristel: Record Annual Figures (Once Again) And Impressive Three-Year Targets Support An Understandable 30x P/E

12 December 2019
By Maynard Paton

Results summary for Tristel (TSTL):

  • Record annual figures for the sixth consecutive year, supported by satisfactory progress both within the UK and abroad.
  • The underlying performance was complicated by Brexit stock-piling, an acquisition, US regulatory costs and option expenses. 
  • The publication of new three-year financial targets was impressive, and suggested the company could grow organically at 10-15% per annum. 
  • The accounts are still healthy with high margins, net cash and respectable cash generation. 
  • The valuation remains understandably rich with an estimated underlying P/E of 30. I continue to hold.
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Andrews Sykes: Milder Winter Leaves H1 Profit Down 25% Although Margins Remain High, Cash Exceeds Debt And Current Trading Signals A Better H2

02 December 2019
By Maynard Paton

Results summary for Andrews Sykes (ASY):

  • Revenue dropped 8% and operating profit dived 25% following lower demand for ASY’s heaters and boilers.
  • European operations continue to represent almost a quarter of the business, with new depots opened recently in France.
  • Accounts now affected by IFRS 16, although the fundamental attractions of decent margins (19%) and net cash (£20m) remain in place. 
  • Outlook comments appeared encouraging, with the company blog suggesting busy demand for pumps to combat flooding.
  • The underlying P/E could be 16 and the yield is 3.9%. I continue to hold.
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Getech: H1 Results Reiterating ‘Lumpy’ Revenue, Fragile Accounts And Other Drawbacks Prompt My Exit At A 47% Loss

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02 December 2019
By Maynard Paton

Results summary for Getech (GTC):

  • Revenue fell 15% to its lowest first-half level since 2010. At least the H1 operating loss did not increase from H1 2018.
  • GTC continues to be dependent on oil and gas operators purchasing its “market leading” data — the income from which remains “lumpy”. 
  • The level of recurring revenue implies a lot of work is needed before GTC can sustain positive earnings.  
  • The accounts are still rather fragile, with cash flow shored up by tax credits and capitalised development costs becoming more significant.  
  • Delays to both a Sierra Leone project and a property sale have not helped support the £9m market cap. I have sold out entirely.
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S & U: Record H1 Figures Show Profit Up Only 3%, Although Welcome News On Bad Debts Now Signals A ‘Resumption’ Of Growth

19 November 2019
By Maynard Paton

Results summary for S & U (SUS):

  • Record first-half figures that showed revenue up 7%, operating profit up 3% and the dividend up 6%.
  • Bad debts within the Advantage car-loan division have started to subside following 18 months of sharp increases.
  • Management remains upbeat as loan applications continue to flood in, and has appointed an industry ‘heavyweight’ as the new Advantage MD.
  • Progress at Aspen Bridging was “slightly short of expectations” but the division’s long-term potential could be considerable. 
  • Possible P/E of 11 and yield of 5.8% do not appear expensive if indeed the business can enjoy “a resumption of [its] usual rates of growth”. I continue to hold.
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Tasty: Woeful H1 Results Leave Shareholders Relying On Bumper Christmas Bookings To Avert Terminal Cash Trauma

07 November 2019
By Maynard Paton

Results summary for Tasty (TAST):

  • Woeful figures showed weaker revenue and greater losses — with the excuses this time including Brexit rather than unfavourable weather and the World Cup.
  • A £3m equity placing has shored up the balance sheet, while an absence of further write-offs and utilised provisions lends support to turnaround hopes. 
  • This year’s Christmas performance is crucial, with TAST going all out to capture festive-party bookings. Management’s outlook remarks seemed encouraging.
  • Poor Christmas trade causing further cash flow traumas could leave TAST no option but to de-list.  
  • The market cap is £4.1m for sales of £45m from 57 restaurants. I continue to bravely/stupidly hold.
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FW Thorpe: 2019 Results Declare Record £57m Cash Hoard Despite Slowing LED Sales And Brexit Reducing Profit By 10%

18 October 2019
By Maynard Paton

Results summary for FW Thorpe (TFW):

  • “Ongoing economic uncertainty” caused by Brexit led to flat sales and lower profit. 
  • Talk of a “healthy order book” provides hope that trading won’t deteriorate into 2020. 
  • Comments concerning new products imply slowing LED growth and a plucky move into non-lighting applications.
  • Accounts boast enormous £57m cash hoard that could be used for acquisitions — or (fingers crossed) further special dividends.
  • Underlying P/E of 19 seems optimistic given recent progress. I continue to hold.
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M Winkworth: Subdued H1 Results Leave P/E At 10x As Foxtons Beaten Once Again In Brexit-Stifled Market

23 September 2019
By Maynard Paton

Results summary for M Winkworth (WINK):

  • A standstill London property market left first-half revenue down 3% and profit unchanged. 
  • Subdued trading conditions have persisted since the Brexit vote and are likely to continue until the “political and economic uncertainty” clears. 
  • Further market-share gains have been won from London rival Foxtons, while the online competition continues to struggle.
  • The accounts remain simple, high-margin and cash-flush.
  • A possible P/E of 10 and yield of 6.6% do not appear expensive should earnings ever resume their momentum. I continue to hold.
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Tristel: 2019 Open Day Yields No Revelations Although Encouraging Sales Developments Have Emerged In The UK, France And Italy

04 September 2019
By Maynard Paton

Trading update and presentation summary on Tristel (TSTL):

  • TSTL’s 2019 open-day presentation and the associated scuttlebutt did not yield any ground-breaking news. 
  • Unpicking the accompanying trading update suggested second-half UK sales gained an impressive 12%.
  • However, the contribution from international operations was distorted by the purchase of Ecomed in November.
  • The former Ecomed boss was confident sales in France could one day exceed those in Germany — TSTL’s largest overseas market. 
  • The purchase of the group’s Italian distributor — which has expanded quickly during recent years — appears very sensible. 
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Mincon: Remarkable €8m Disposal And Promising ‘Challenger’ Contracts Offset Mixed H1 Trading And 14% Profit Drop

27 August 2019
By Maynard Paton

Results summary for Mincon (MCON):

  • Mixed progress, with little underlying revenue growth and profit down 14% due to a “softening market”.
  • Earnings were bolstered by the remarkable €8m disposal of a subsidiary purchased 15 months earlier for effectively €1m.
  • New ‘challenger’ plan of selling direct to customers appears to have started well with two new contracts won.
  • Financials could be improved after accounts show modest margins, notable write-offs and significant working-capital investment.
  • The underlying P/E of 20 is not a bargain. I continue to hold.
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Daejan: NAV Reaches New £119 Per Share High But Management Remarks Of Slowing Growth Now Leaves Price-To-Book At 46%

14 August 2019
By Maynard Paton

Results summary for Daejan (DJAN):

  • These full-year figures set new records for revenue, up 9%, net asset value, up 7% and the dividend, up 3%.
  • The 3.5% valuation gain was DJAN’s lowest since 2012 following the “uncertainty” caused by Brexit. Management remarks suggested current-year growth could slow further.
  • A significant purchase in the States has lifted the proportion of US properties to 29% of the group’s estate.
  • The accounts remain conservatively financed and the property valuations continue to appear prudent.
  • The share price represents only 46% of net asset value — the lowest percentage for seven years. I continue to hold.
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City Of London Investment: Dividend Yield Still Tops 6% After Mixed 2019 Summary Shows FUM At Record (GBP) High But Fee Rates Sliding Lower

26 July 2019
By Maynard Paton

Results summary for City of London Investment (CLIG):

  • These 2019 summary figures contained no surprises, as lower funds under management (FUM) throughout the year left revenue down 6% and profit down 16%.
  • FUM ironically ended the year at its highest-ever level in GBP terms (£4.2b), as client money once again trickled out of the main emerging-market funds and in to other strategies.
  • The overall fee rate paid by clients slid from 80 basis points to 76 basis points.
  • The accounts continue to sport high margins, a robust return on equity, decent cash flow and net cash.
  • The P/E is approximately 10 and the yield tops 6%, although the shares have traded on a similar rating for years. I continue to hold.
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Mountview Estates: 2019 Results Show Encouraging H2 As NAV Climbs To £94 Per Share And Closer To £97 Share Price

15 July 2019
By Maynard Paton

Results summary for Mountview Estates (MTVW):

  • Brexit “uncertainties” led to MTVW’s lowest annual revenue and earnings since 2013.
  • At least the dividend was held and net asset value reached a fresh £94 per share high.
  • A higher gross margin during the second half was encouraging and may indicate MTVW is enjoying slightly stronger sale prices.    
  • Debt represents a low 12% of the group’s property estate — which continues to be accounted for at cost.
  • My sums suggest MTVW’s balance sheet could actually be worth £200-plus per share — more than double the recent share price. I continue to hold.
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System1: 2019 Results Prompt Awkward Questions After Woeful £3k AdRatings Revenue

25 June 2019
By Maynard Paton

Results verdict on System1 (SYS1):

  • An unspectacular performance with gross profit unchanged and profit rebounding due only to cost cuts.  
  • The new AdRatings service suffered a woeful start after generating revenue of just £3k.
  • The lack of all-round progress prompts awkward questions as to whether the group’s advert-analysis services are actually of much interest to the marketing industry.
  • The accounts remain cash rich and would exhibit respectable ratios were it not for the chunky AdRatings start-up costs.
  • The P/E could be somewhere between 10 and 15 assuming AdRatings one day breaks even (or is scrapped). I continue to hold.
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Andrews Sykes: 2018 Results Show Profit Rising 18% To New High But Absence Of ‘Cautiously Optimistic’ Outlook Hints At Weaker 2019 Figures

22 May 2019
By Maynard Paton

Results verdict on Andrews Sykes (ASY):

  • Very favourable weather helped revenue gain 10% and profit jump 18% to set new records.
  • European sales soared 24% to represent almost a quarter of the business, and continue to offer further potential.
  • Accounts showcased wonderful margins, robust returns on equity, reassuring cash levels and respectable cash flow. 
  • Absence of “cautiously optimistic for further success” within management’s outlook hinted that 2019 may not be as buoyant as 2018.
  • The underlying P/E could be 16 while the yield is 3.3%. I continue to hold.
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Getech: 2018 Results Showcase Impressive 24% Products Revenue Gain But Full Profit Recovery Remains Dependent On Stronger Oil Price

10 May 2019
By Maynard Paton

Results verdict on Getech (GTC):

  • Total revenue gained 11% to set the highest level since 2015. The dominant and more attractive Products division impressed with a 24% revenue improvement.
  • Progress was achieved in particular by a last-gasp $3.2m sale that contributed approximately 30% to the top line.
  • Profit was hampered by the loss-making Services division, although significant cost savings have since been made.
  • The direction of the oil price may largely dictate whether GTC’s oil-exploration software sells well (or not) during 2019.
  • The £11m market cap requires greater earnings to underpin obvious upside potential. I continue to hold.
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