S & U: H1 Figures Show Write-Offs Soaring 32% But I Am Happy To Collect A 4.4% Income After The Dividend Was Lifted 14%

28 September 2018
By Maynard Paton

Update on S & U (SUS).

Event: Interim results and presentation for the six months to 31 July 2018 published 25 September 2018.

Summary: SUS reported satisfactory first-half progress, with the group’s main car-loan division now set to deliver its 19th consecutive year of growth. The performance was accompanied by the usual drawbacks — tighter underwriting leading to fewer new customers, and debt write-offs continuing to soar (this time by 32%). The group’s boss reckons we’re at a “relatively late stage of the economic cycle”, too. Still, I remain happy to collect the 4.4% yield and back the veteran directors who carefully steward their £134m family shareholding. I continue to hold.

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Tasty: Hapless Restaurant Chain Reveals Dismal H1 Loss Although Some Outlets Are Apparently ‘Outperforming Expectations’

25 September 2018
By Maynard Paton

Update on Tasty (TAST).

Event: Interim results for the 26 weeks to 1 July 2018 published 21 September 2018.

Summary: The hapless restaurant chain delivered a rather dismal — but not completely disastrous — set of first-half figures. “Unfavourable” weather was partly blamed for underlying sales falling approximately 4%, which in turn led to an operating loss. The numbers also carried a further substantial write-down while net debt jumped following adverse cash movements. But recovery hopes still remain — costs have been cut, menus have been re-jigged and some sites are even “outperforming expectations”. I continue to hold.

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FW Thorpe: ‘Excellent’ 2018 Results Show Underlying 2% Profit Advance And Claim Sales Of High-Tech Systems Have ‘Rocketed’

21 September 2018
By Maynard Paton

Update on FW Thorpe (TFW).

Event: Preliminary results for the twelve months to 30 June 2018 published 20 September 2018.

Summary: The specialist lighting manufacturer delivered its fifth consecutive year of record results, although describing an underlying 2% profit advance as “excellent” overplayed the performance somewhat. Still, the figures were a touch better than I had expected and showcased all the usual financial attractions — decent margins, vast surplus cash and robust reinvestment returns. Sales of some new high-tech products apparently “rocketed”, too. That said, TFW suffered mixed divisional performances while the share-price rating remains rich. I continue to hold.

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M Winkworth: Revenue Jumps 10% To New H1 Record As Online Rivals Now Described As ‘Digital Experiments’

13 September 2018
By Maynard Paton

Update on M Winkworth (WINK).

Event: Interim results for the six months to 30 June 2018 published 12 September 2018.

Summary: These results were quite satisfactory and actually revealed record first-half revenue — despite the estate-agency group remaining dependent on London’s difficult property market. In fact, the confident management narrative said sales commission rates had increased and also described online rivals as “digital experiments”. Meanwhile, the accounts seem in decent shape, the outlook appears relatively encouraging and the valuation is hardly extended. I continue to hold.

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[SharePad] Screening For My Next Long-Term Winner: CMC Markets

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Readers of my blog can claim one month of free data. Click here for details.

11 September 2018
By Maynard Paton

Good news — SharePad wanted a second article!

This time I have looked at CMC Markets (CMCX), a high-margin, cash-rich and owner-run spread-betting firm. Let me explain how I pinpointed the share, and what I discovered through SharePad.

Simply click here to read my CMC Markets article for SharePad.

Maynard Paton

[SharePad] Screening For My Next Long-Term Winner: Ramsdens

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31 August 2018
By Maynard Paton

I have started writing articles for SharePad!

My decision to join SharePad was not difficult. I have used the investment software since 2015 and consider it to be an exceptional service for private investors. I also rate the educational and analytical articles that SharePad has become renowned for.

My SharePad articles will cover my stock-screening efforts — tracking down respectable companies that offer attractive financials, capable managers, reasonable prospects and modest valuations. I hope you find what I write useful.

The articles will probably replace my Watch List reviews, which I admit have been somewhat infrequent of late. I would like to think a return to proper schedules and deadlines will increase my content output…

…and in doing so help me find decent buying opportunities and improve my investment returns!

I will post a link on this Blog to every SharePad article that I write. I kick off with a review of pawnbroker Ramsdens (RFX). Simply click here to read my debut piece for SharePad.

Maynard Paton

Mincon: Satisfactory H1 Results Showcase 12% Underlying Sales Growth And Operating Margin Reaching 19%

23 August 2018
By Maynard Paton

Update on Mincon (MCON).

Event: Interim results for the six months ending 30 June 2018 published 13 August 2018.

Summary: MCON extended its bumper 2017 progress with some very satisfactory first-half figures. The specialist drill manufacturer claimed greater orders from the mining sector had supported 12% organic sales growth, while my sums suggested a robust 19% operating margin was reached during the second quarter. In addition, current trading appears healthy and a recent acquisition may have performed much better than expected. However, a P/E in excess of 20 probably reflects all of the positives, especially given cash conversion remains below par. I continue to hold.

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City Of London Investment: Fees Cut, Forecasts Reduced, Funds Underperform… But Lifted Dividend Offers 6.8% Income

01 August 2018
By Maynard Paton

Update on City of London Investment (CLIG).

Event: Trading update and shareholder presentation/summary results for the year ending 30 June 2018 published 17 July 2018.

Summary: Bumper first-half figures and subsequent monthly updates had already ensured the fund manager’s summary annual results would be positive. However, the second half did witness funds under management decline and the group’s own projections for the coming year have now been reduced. In addition, client fees have been cut once again while the main emerging-market strategy continues to underperform. I still hope that, one day, this cash-rich, high-margin business can attract meaningful new mandates to spark a share-price re-rating.  Until then, a 6.8% income remains available. I continue to hold.

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Daejan: NAV Hits New £111 Per Share Peak As £64 Share Price Offers Theoretical 14% Earnings Yield

27 July 2018
By Maynard Paton

Update on Daejan (DJAN).

Event: Preliminary results for the year to 31 March 2018 published 17 July 2018

Summary: The commercial property group once again left its numbers to do most of the talking, as new all-time highs for revenue, net asset value and the dividend were accompanied by only two paragraphs of management commentary. A bonus this year was US tax changes adding £40m to the balance sheet, which now stands at £111 per share and continues to dwarf the £64 share price. Conservative borrowing levels, veteran family management and an illustrious track record remain the foundations of this investment, and, in theory at least, a 14% earnings yield is available, too. I continue to hold.

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Tristel: ‘Core’ 2018 Revenue May Have Advanced 18% As The Chairman Looks To Sell His (Now) 15% Shareholding In An ‘Orderly Manner’

20 July 2018
By Maynard Paton

Update on Tristel (TSTL).

Events: Trading update for the year ending 30 June 2018 published 13 July 2018, director share sales published 16 July 2018 and shareholder open-day presentation hosted 17 July 2018.

Summary: Earlier this week I attended TSTL’s third annual open day, and this year the event was accompanied by news of hefty director selling as well as confirmation of record revenue and profit. The chairman has reduced his shareholding from 19% to 15%, and confirmed he is looking to sell more during the next few years. The marquee presentation did not provide any great revelations, but one slide did show a useful sales comparison between the UK and overseas, while another slide suggested full-year sales of the group’s ‘core’ disinfectants had just advanced an impressive 18%. I continue to hold.

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Q2 2018: 1 Sell And Some Thoughts On Pension Deficits

30 June 2018
By Maynard Paton

Happy Saturday! I hope you continue to enjoy my Blog… and that your shares have been sizzling higher during the recent hot weather!

My portfolio has been simmering nicely throughout the last three months. In particular, positive second-quarter contributions from Bioventix and Getech have now added to the decent first-quarter efforts of M Winkworth, Mincon and Tristel. However, System1 has sadly joined Tasty as a notable 2018 loser.

It has all meant that, half way through the year, I am up 6.7% versus the FTSE 100 returning 1.7%. I am glad to be in positive territory following a tricky Q1, and I trust I can maintain a gap to the market during the second half.

Recent RNSs from my shares have been broadly positive. Once again there was a mix of statements, ranging from very satisfactory to rather lacklustre, and I am very happy that no major horror stories emerged!

There was one underwhelming update, though, which prompted a disposal and my portfolio’s only Q2 activity. Let me explain what has happened.

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Mountview Estates: 2018 Dividend Lifted 33% As Boss Admits Company Has A ‘Finite Life’

19 June 2018
By Maynard Paton

Update on Mountview Estates (MTVW).

Event: Preliminary results for the twelve months to 31 March 2018 published 14 June 2018

Summary: This RNS was more interesting for the management comments — all 626 words — than the actual 2018 financials. Indeed, MTVW’s chief exec is probably the first-ever boss to tell shareholders their business has a “finite life” and had essentially operated in an ex-growth market for 30 years. Hardly inspirational stuff… until you realise the dividend was lifted 33% and has now grown 47-fold during the last three decades. Mind you, this property-trading specialist will at some point have to call it a day — and dissolve an estate that could be worth almost double the current share price. 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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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.

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Initial Reviews: AIREA, Octagonal And Richoux

25 May 2018
By Maynard Paton

Today I am experimenting with a new Blog-post format that covers short-ish reviews of three different companies.

The shares involved this time are all small-caps:

* AIREA (AIEA): This flooring group recently received bid interest from quality operator James Halstead. Although the share price seems cheap and offers asset backing, there is no evidence yet of any long-term business qualities.

* Octagonal (OCT): High margins, attractive growth and net cash are among the attractions at this niche financial-services firm. However, management’s ‘connections’ are not those you would associate with tip-top executives.

* Richoux (RIC): A bombed-out share price and Kaye family involvement bring me to this somewhat muddled restaurant group. Can the new boss lead a turnaround… and repeat the multi-bagger success he enjoyed at Prezzo?

Let’s see if any of this trio are worthy of further investigation.

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