Category Archives: My Sold Shares

Oleeo: Bombshell Tender Offer And Delisting Proposal Forces My Exit At A 30% Loss

23 December 2019
By Maynard Paton

Results summary for Oleeo (OLEE):

  • A bombshell tender offer and delisting proposal overshadowed details of the 2019 results.
  • I have tendered my full holding and recorded a 30% loss after owning the shares for four years.
  • The tender offer was not exactly generous, given OLEE’s net cash represented 93% of the tender valuation.
  • A delisting was always a risk when the executive chairman (and related parties) owned 84% of the business.
  • Full-year revenue climbed 7% to reach a new high, although the significant development expenditure seen since 2015 is set to depress profit for at least another year. 
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Getech: H1 Results Reiterating ‘Lumpy’ Revenue, Fragile Accounts And Other Drawbacks Prompt My Exit At A 47% Loss

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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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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Oleeo: 155-Word H1 Statement Could Strangely Mark The Low Point For Earnings As £13m Market Cap Compares To £11m Net Cash Position

07 May 2019
By Maynard Paton

Results verdict on Oleeo (OLEE):

  • A terse 155-word statement revealed an unsurprising 50% profit plunge as OLEE extends its “capacity to suffer” to four years.
  • At least revenue continues to inch ahead and might even be growing at a reasonable pace if the largest customer is excluded.
  • Recent client installations include all four Welsh police forces — cementing OLEE’s 50%-plus share of supplying UK police recruitment IT.
  • A lack of guidance for the full-year could strangely mark the low point for earnings. 
  • A £13m market cap is almost entirely supported by the £11m net cash position. I continue to hold.
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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.

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Castings: H1 Results Reveal Machining Turnaround Delayed By 2 Years While Depreciation Review Inflates Group Profit By 10%

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.

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Oleeo: The 4:28pm Results Revealed A Further Earnings Slump As Anonymous Tip-Off Corrects My HMRC Mistake

07 November 2018
By Maynard Paton

Update on Oleeo (OLEE).

Event: Preliminary results for the twelve months to 31 July 2018 published 02 November 2018.

Summary: Publishing results at 4:28pm on a Friday is never a good sign. And sure enough, the recruitment software outfit warned of yet another profit slump. Still, at least revenue inched to a new record as the firm enjoyed greater subscription income. Meanwhile, an anonymous tip-off has set me straight about OLEE’s contract with HMRC — the deal appears not to have been lost after all. All I can do now with this illiquid share is hope for an earnings rebound. I continue to hold.

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Getech: H1 Revenue Hits A 7-Year Low And For Now My Hopes Rest On A Stronger Oil Price

08 October 2018
By Maynard Paton

Update on Getech (GTC).

Event: Interim results for the six months to 30 June 2018 published 28 September 2018.

Summary: These figures were not as good as I had hoped. The lowest first-half sales for seven years created a not-insignificant operating loss and left cash flow dependent on tax refunds. Still, the geoscience software specialist talked of a stronger second half and I remain hopeful the accounts will eventually showcase the high margins and expanding revenue the directors continue to predict. For the time being, I just have to trust a stronger oil price can one day tempt GTC’s customers to increase their spending. I continue to hold.

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Castings: The 25-Year Dividend Record Now Shows 23 Increases, 2 Holds And No Cuts

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.

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World Careers Network: I Am Locked Into A 35% Loss Following A Stupid Company Rebranding And Likely End Of A Major Contract

01 May 2018
By Maynard Paton

Update on World Careers Network (WOR).

Event: Interim results for the six months to 31 January 2018 published 30 April 2018

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.

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Record: Alarming 10% Fee Cut Smells Of Management Guff And I Have Sold Out

20 April 2018
By Maynard Paton

Update on Record (REC).

Event: Trading update for the three months to 31 March 2018 published 20 April 2018

Summary: REC has struggled to make any decisive progress for several years now. The firm’s currency-trading strategies have floundered, clients have regularly jumped ship, while those clients that have stayed have demanded lower fees. Now comes the alarming news that REC’s bog-standard currency-hedging service will cut its fees by 10% to keep clients happy. To add insult to injury, greater costs will be required to cater for this product “enhancement”. I have been frustrated with REC for quite some time, and have belatedly decided enough is enough. I have sold my entire holding.

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Getech: 17-Month Results Provide Further Hope Of A Profit Rebound And Decent Share-Price Upside

02 March 2018
By Maynard Paton

Update on Getech (GTC).

Event: Final results for the seventeen months to 31 December 2017 published 28 February 2018.

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.

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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.

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Record: Another Frustrating RNS That Leaves The Stock’s 5% Yield As The Main Highlight

20 November 2017
By Maynard Paton

Update on Record (REC).

Event: Interim results and shareholder presentation for the six months to 30 September 2017 published 17 November 2017

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

Castings: H1 Figures Just About Acceptable As Profit Per Tonne Reaches New £322 High

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.  Continue reading

World Careers Network: FY 2017 Figures Show Revenue And Cash At All-Time Highs, But Earnings Will Remain Depressed Until At Least 2019

03 November 2017
By Maynard Paton

Update on World Careers Network (WOR).

Event: Preliminary results for the twelve months to 31 July 2017 published 02 November 2017

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

Getech: 2017 Results Spotlight Product Attractions And Recovery Potential From £9m Market Cap

31 October 2017
By Maynard Paton

Update on Getech (GTC).

Event: Interim results for the twelve months to 31 July 2017 published 31 October 2017

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

Record: 2017 Results Herald Welcome Larger Dividends And £10m Tender Offer To Help Company Founder’s Retirement Planning

23 June 2017
By Maynard Paton

Quick update on Record (REC).

Event: Final results and shareholder presentation for the twelve months to 31 March 2017 published 16 June 2017, and proposed tender offer.

Summary: There was a certain irony about these figures. REC makes its money by managing currency movements for clients… yet the group itself has prospered of late largely because the weaker GBP has translated into greater management fees. Whether REC’s clients have actually prospered is harder to say, as there still seems little evidence of a growing customer base. Still, I welcome REC’s decision to hand excess cash back via larger dividends, but the accompanying £10m tender offer does appear as if it was devised primarily to help REC’s founder plan for his retirement. With operating costs expected to rise, too, I reckon the tender price equates to an underlying P/E of 14-15. I continue to hold. Continue reading

Castings: Annual Results Are Worst Since 2011 As Management Talks Of ‘Robotic Handling’

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. Continue reading

World Careers Network: Record H1 Revenue But Profit Recovery Delayed Until At Least 2019

19 May 2017
By Maynard Paton

Quick update on World Careers Network (WOR).

Event: Interim results for the six months to 31 January 2017 published 28 April 2017

Summary: These first-half results were not too bad, not least because they included a record £5.1m revenue figure. However, the software developer did warn that rising costs would hurt earnings significantly during the second half of 2017 and throughout 2018. WOR recovered very well from its previous investment phase of 2009 and 2010, and I am left trusting the firm can repeat the trick once again. At least the accounts remain simple and flush with cash, and you could argue the underlying P/E is just 5. I continue to hold. Continue reading

Getech: Oh Dear… The Only H1 Highlight I Could Find Was The 18% Reduction To The Workforce

07 April 2017
By Maynard Paton

Quick update on Getech (GTC).

Event: Interim results for the six months to 31 January 2017 published 06 April 2017

Summary: Oh dear… you know you have a ‘debatable’ holding in your portfolio when the highlight of a results statement is an 18% reduction to the workforce. That sadly is the case with GTC, as the geoscience data specialist has slashed its cost base and now hunts for income sources away from its cash-strapped oil clients. These H1 numbers were otherwise quite unremarkable, although the new boss has issued a few glimmers of hope for some sort of turnaround. I continue to hold. Continue reading

Electronic Data Processing: ELEVEN Months On And The Strategic Review Has Gone Nowhere… And I Have Given Up Waiting

23 March 2017
By Maynard Paton

Quick update on Electronic Data Processing (EDP).

Event: Strategic review and pensions update issued 06 March 2017

Summary: Oh dear — EDP’s strategic review has not gone as well as I had hoped. The software minnow has taken ELEVEN months to finally own up to holding early-stage talks with just the one interested bidder. Other approaches have disappeared, due in part to unfavourable developments within the group’s defined-benefit pension scheme. I doubt EDP’s main shareholders can force anyone to bid and, without any sign of EDP having a Plan B, I have sold my entire holding. Continue reading

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! Continue reading

Electronic Data Processing: 8 Months On And I’m Still Waiting For A Buyer

20 December 2016
By Maynard Paton

Quick update on Electronic Data Processing (EDP).

Event: Preliminary results for the twelve months to 30 September 2016 published 20 December 2016

Summary: What a letdown! I had hoped EDP could announce the conclusion of its strategic review within these results, but no such luck I’m afraid. Instead, shareholders have been left in the dark about possible corporate action as the underlying business puts in another dismal revenue performance. The irony is this company actually develops software for others to improve sales! I can only hope 2017 will see a generous buyer emerge and I can then move on. I continue to hold. Continue reading

Record: High Margin, High Yield… And High Time New Clients Were Found

21 November 2016
By Maynard Paton

Quick update on Record (REC).

Event: Interim results for the six months to 30 September 2016 published 18 November 2016

Summary: If nothing else, REC’s results are consistent — once again this specialist currency manager revealed stagnant financial progress, a lack of new business and a dependence on a handful of major clients. Nevertheless, the group sports high margins and cash-flush accounts,  while the P/E could be as low as 7 thanks to the weaker GBP. Talk of potential special dividends unfortunately remains talk for now, but at least the ordinary payout yields 5.2%. I continue to hold. Continue reading

Castings: £23m Cash Hoard Can’t Disguise Worst H1 Results For 6 Years

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. Continue reading

World Careers Network: Brexit Boost Could Support Cash-Adjusted P/E Of Just 5

09 November 2016
By Maynard Paton

Quick update on World Careers Network (WOR).

Event: Preliminary results for the year to 31 July 2016 published 08 November 2016

Summary: These figures were better than I had expected, not least because WOR enjoyed the benefits of the weaker post-Brexit pound. However, the software developer did warn that costs would continue to rise — which in turn would keep a lid on earnings for the “foreseeable future”. At least revenue is marching higher while the weaker pound ought to help the group’s progress in the States. The accounts remain simple and flush with cash, and you could argue the underlying P/E is just 5. I continue to hold. Continue reading

Getech: H2 Profit Reported But I Am Not Entirely Convinced

08 November 2016
By Maynard Paton

Quick update on Getech (GTC).

Event: Final results for the year to 31 July 2016 published 08 November 2016

Summary: A lot happened at GTC before these results and I am no longer as keen on the group as I once was. That said, the figures from this specialist data supplier to the oil and gas industry were not truly awful — a profitable second half gives hope that one day the business will recover. The asset-rich balance sheet also lends support. But a new boss and various acquisitions just don’t make me entirely comfortable. I continue to hold. Continue reading

French Connection: I Have Finally Given Up On This Turnaround

20 September 2016
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Interim results for the six months to 31 July 2016 published 20 September 2016

Summary: It’s taken me five years to realise that I have wasted my time with FCCN’s purported turnaround. The fashion chain’s latest results were very mixed, and I feel cash may now become tight if there is more bad news. I have belatedly concluded the problem Retail division could well lose money for some years ahead, while an activist investor may not be doing enough to instigate the necessary board changes. I have sold my entire holding. Continue reading

Record: Cash-Adjusted P/E Of 8 Plus Talk Of Special Dividends

23 June 2016
By Maynard Paton

Quick update on Record (REC).

Event: Final results for the twelve months to 31 March 2016 published 17 June 2016

Summary: These far-from-spectacular figures were no surprise. Indeed, both revenue and profit have stagnated for five years now and there was no real suggestion that improvements will occur anytime soon. What’s more, a new regulatory risk was disclosed that may hinder progress :-( Nevertheless, this specialist currency manager did talk of future special dividends, while the high-margin, cash-rich nature of the business remains attractive. I reckon the underlying P/E is 8 and the yield is 6%-plus, and I continue to hold.  Continue reading