My Portfolio: Year In Review 2019

10 January 2020
By Maynard Paton

Happy January!

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

This 5,562-word post provides a ‘year in review’ of my current portfolio holdings. I recap how each of the underlying businesses performed during 2019, 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 I double-check my investment logic to ensure I am still invested for the right reasons! The upsets I will suffer during 2020 will most likely be caused by the shares I already own rather than by new shares I purchase.

Read more

System1: As H1 Figures Show Just 4% Top-Line Growth And AdRatings Burning £2m A Year, Could ITV’s Euro 2020 Competition Validate A Potential Recovery?

20 December 2019
By Maynard Paton

Results summary for System1 (SYS1):

  • Another unremarkable performance, with underlying gross profit up 4% and profit (without AdRatings) rebounding 24% due mostly to improved cost control.  
  • The start-up AdRatings service continues to lose £2m a year and is increasingly dictating the company’s progress, potential and valuation.
  • An ITV competition to determine the most “emotionally engaging” advert during Euro 2020 could create extra recognition for System1-type marketing and SYS1’s services. 
  • The accounts remain cash rich and the business (without AdRatings) exhibited a healthy 21% margin.
  • The P/E could be anywhere between 8 and 26 depending on how AdRatings, share-based payments and the cash position are viewed. I continue to hold.

Read more

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.

Read more

My Portfolio: Year In Review 2018

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.

Read more

System1: H1 Results Could Mean The P/E Is Just 9… Assuming The Ad Ratings Service Eventually Becomes A Money-Spinner (I’m Not Sure)

06 November 2018
By Maynard Paton

Update on System1 (SYS1).

Event: Interim results for the six months to 30 September 2018 published 02 November 2018.

Summary: A couple of earlier updates had already signalled this lacklustre first-half performance. Indeed, several references to competitive pricing and re-designed products implied the advertising research specialist may no longer be the ‘pioneering’ force it once was. Furthermore, the new Ad Ratings service could be hard pushed to become a real money-spinner and return the group to growth. That said, margins remain good, there is cash in the bank and the P/E might be 9… if you believe some significant development expenditure will eventually pay off. I continue to hold.

Read more

System1: Boss Blames Buffett-Backed Bid For Client Cutbacks And 72% Profit Crash

08 June 2018
By Maynard Paton

Update on System1 (SYS1).

Event: Annual results for the twelve months to 31 March 2018 published 01 June 2018

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.

Read more

My Portfolio: Year In Review 2017

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.

Read more

System1: H1 Profit Slumps 70% But Finer Details Provide Hope For Shareholders

27 October 2017
By Maynard Paton

Update on System1 (SYS1).

Event: Interim results and shareholder presentation for the six months to 30 September 2017 published 27 October 2017

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.

Read more

System1: News Of 26.1p Per Share Special Dividend Tempered By Mild Q1 Warning

16 June 2017
By Maynard Paton

Quick update on System1 (SYS1).

Event: Annual results and shareholder presentation for the twelve and fifteen months to 31 March 2017 published 15 June 2017

Summary: A change of year-end meant SYS1 had a second opportunity to impress shareholders with a bumper set of annual results. However, this time the group admitted recent trading had been “a little slower than expected” and the highly rated share price reacted accordingly. Still, the group’s executives remain confident about the long term and underlined their confidence by declaring a super 26.1p per share special dividend. I continue to hold. 

Read more

BrainJuicer: Bumper 2016 Results Suggest Growth Accelerated Towards 20% During H2

10 February 2017
By Maynard Paton

Quick update on BrainJuicer (BJU).

Event: Annual results and shareholder presentation for the twelve months to 31 December 2016 published 09 February 2017

Summary: These impressive annual figures confirmed BJU had enjoyed a magnificent second half. The market-research pioneer confirmed all of its core products had performed well, including the group’s best-selling system that had suffered a wobble during H1. I’m also pleased the accounts remain first class, while it’s not surprising the share-price rating is now expecting further robust growth. However, the usual “limited visibility” of client orders remains a drawback. I continue to hold.

Read more

My Portfolio: Year In Review 2016

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!

Read more

BrainJuicer: Return To Double-Digit Growth And Yet Another 12p Per Share Special Dividend

16 September 2016
By Maynard Paton

Quick update on BrainJuicer (BJU).

Event: Interim results for the six months to 30 June 2016 published 16 September 2016

Summary: A very respectable set of figures that confirmed this market-research agency has now returned to double-digit growth. However, the group’s best-selling system has started to face “pricing pressure” and the wider competitive advantage may not be as strong as it once was. The statement’s highlight was news of a 12p per share special dividend — the third in four years. The accounts remain in good shape and I continue to hold.

Read more

BrainJuicer: I Watched A Beer Advert And Decided To Buy

07 September 2016
By Maynard Paton

Today I’m reviewing one of my recent investments.

The company in question is BrainJuicer (BJU), which you may recall I revealed as a fresh holding within this second-quarter portfolio update.

I purchased my BJU shares at an average price of 325p (including all costs) during March and April 2016. The bid price is now 425p and the position currently represents about 2% of my portfolio.

I have to admit, BJU is somewhat quirky in comparison to many of my existing holdings. The group is a market-research agency and has pioneered techniques to judge the potential success of adverts using ‘behavioural science’.

If you’re wondering what on earth behavioural science is, don’t worry. For years BJU’s business never made much sense to me — until I read this year’s annual report, watched a beer advert… and finally got to grips what this £58m small-cap actually does.

Anyway, supporting the notion that BJU had above-average investment potential was a respectable record of progress, decent financials, an executive team led by the firm’s founder/major shareholder… as well as the opportunity to further ‘disrupt’ the wider market-research industry.

Read more