Andrews Sykes: 2017 Results Showcase 11% Profit Growth, A 24% Margin And £20m Net Cash

18 May 2018
By Maynard Paton

Update on Andrews Sykes (ASY).

Event: Preliminary results for the twelve months to 31 December 2017 published 18 May 2018

Summary: These results were quite satisfactory, although sadly the record figures I had hoped for did not entirely come through. Indeed, after a bumper first half, I note the second half could only match last year’s H2. Nevertheless, I was pleased the specialist hire group did not have to rely on “significant extremes in climatic conditions” to stimulate extra demand for its air conditioners, heaters and pumps. Meanwhile, margins remain high at 24%, net cash has grown to a hefty £20m and a 14x cash-adjusted P/E does not seem that excessive. I continue to hold.

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Best Of The Best: The Chief Exec Enjoys A 50% Shareholding And Has Quadrupled Online Sales During The Last 5 Years

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16 May 2018
By Maynard Paton

Today I am continuing my hunt for Watch List shares by looking at Best of the Best (BOTB).

Here are the initial attractions that prompted this research:

* Long-time entrepreneurial ownership: The chief exec established the group during 1999, has been in charge ever since and continues to boast a 50% shareholding.

* Worthwhile growth history: Online sales quadrupled in value between 2012 and 2017 and currently represent 82% of total revenue.

* Conservative funding: The accounts have regularly showcased net cash and special dividends, and may in time enjoy a VAT reclaim windfall.

As usual, I am applying a question-and-answer template to help me pinpoint companies that match the criteria set out in How I Invest. I am looking for as many Yes answers as possible.

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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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Q1 2018: 1 Top-Up And 3 Blog Enhancements

30 March 2018
By Maynard Paton

Happy Easter! I hope you continue to find my Blog useful… and that your portfolio has coped well with the sliding 2018 market!

So far this year, my portfolio has extended its behaviour from 2017. In short, positive contributions from a number of holdings (notably M Winkworth, Mincon and Tristel) have been offset by one substantial loser (Tasty).

It has all meant I have started 2018 down 0.3% versus a 7.2% drop suffered by the FTSE 100. I suppose losing less money than a falling market is not too bad, although I think I would prefer to be thrashed by a rising market — and actually make money.

Anyway, I am glad the RNSs from my shares have been broadly positive. There has been a mix of impressive to acceptable-in-the-circumstances results, with only my smallest holding — System1 — issuing fresh disappointing news.

My portfolio activity has been limited to just one top-up. Let me outline what has occurred.

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M Winkworth: Credible 2017 Figures Continue To Support 6% Yield Following Yet Another Foxtons-Beating Performance

29 March 2018
By Maynard Paton

Update on M Winkworth (WINK).

Event: Final results for the twelve months to 31 December 2017 published 28 March 2018

Summary: The London estate-agency group was never going to issue stunning figures. Nonetheless, a credible performance was reported and I am impressed the business continues to fare well against sector rival Foxtons. Note, too, that WINK’s average percentage commissions actually increased — so perhaps online competition is not that big a threat after all. Meanwhile, the books remain cash rich, the outlook does not seem too bad while the 10x multiple and 6% yield appear modest. I continue to hold.

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S & U: 2018 Results Showcase New Profit High As ‘Sensible Gear Changes’ Set To Control Soaring Bad-Debt Provision 

28 March 2018
By Maynard Paton

Update on S & U (SUS).

Event: Preliminary results and presentation for the year to 31 January 2018 published 27 March 2018

Summary: These results from the car-loan specialist once again provided an investment dilemma. True, shareholders received yet another respectable progress report from the accomplished executive team. However, the finer details showed potential bad debts soaring 59% — which was double the growth rate of revenue and customer advances. The chairman is set to make some ‘sensible gear changes’ to keep a lid on potential bad debts, but until the changes become evident, the share-price multiple could be stuck at 13. I continue to hold.

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Bioventix: Record H1 Results Show Possible 30% Underlying Revenue Growth Alongside Encouraging Remarks About The New Troponin Product

26 March 2018
By Maynard Paton

Update on Bioventix (BVXP).

Event: Interim results for the six months to 31 December 2017 published 26 March 2018

Summary: The antibody specialist delivered another set of impressive results. I had been concerned about a possible ‘revenue gap’ emerging this year following the termination of certain product income. However, these concerns have now diminished — BVXP’s other sales still seem to be growing fast (I estimate at 30%) while management has become more confident about the early contribution from the new troponin product. The group’s financials remain top class and could even be improved if all of the royalties were collected on time. The 25x multiple is understandable, and I continue to hold.

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Mincon: 38% Full-Year Profit Surge Marks ‘First Year Of Current Upturn’  And Prompts A Welcome Lift To The Standstill Dividend

21 March 2018
By Maynard Paton

Update on Mincon (MCON).

Event: Final results for the twelve months ending 31 December 2017 published 20 March 2018

Summary: MCON’s subdued years of 2014, 2015 and 2016 now seem long forgotten after the mining-drill manufacturer confirmed a bumper set of 2017 numbers. Greater client activity has now fuelled director talk of “significant opportunities” and “the first year of the current upturn”, and the share price has naturally climbed to a premium level. Meanwhile, the accounts remain cash-rich, several factors may be suppressing certain ratios, and even the standstill dividend has been lifted. I continue to hold.

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FW Thorpe: Record H1 Figures Can’t Disguise Slowing Growth And Elevated 22x Multiple

16 March 2018
By Maynard Paton

Update on FW Thorpe (TFW).

Event: Interim results for the six months to 31 December 2017 published 15 March 2018

Summary: These first-half figures actually set new H1 records, but they also confirmed TFW’s good run of double-digit profit growth will pause during 2018. Pressure on prices for tunnel lighting was cited as one reason for the pedestrian performance. Should revenue and profit continue to plateau, the elevated share price — rated at 22x my earnings guess — may be at risk of a de-rating. Still, the lighting specialist remains a very respectable business, and continues to be led by directors that think long term. I continue to hold.

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Tasty: Phew! Not Heading For Bankruptcy Just Yet As £4m Property Proceeds And £1m Underlying Profit Compare To £8m Market Cap

13 March 2018
By Maynard Paton

Update on Tasty (TAST).

Event: Preliminary results for the 52 weeks to 31 December 2017 published 13 March 2018

Summary: Phew! I had thought TAST’s plunging share price was signalling these results would be accompanied by an emergency equity placing. As it turns out, the beleaguered restaurant chain continues to report a profit and has surprised me by raising £4m — equivalent to half of its market cap — from two property transactions. Furthermore, management now has a proper turnaround plan in place, the second half showed a few glimmers of hope while the upside could be considerable if a recovery ever occurs. I have bought more shares, both before and after these results.

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Town Centre Securities: 57 Years Of Unbroken Dividends And A Share Price 25% Below NAV

08 March 2018
By Maynard Paton

Today I’m continuing my hunt for Watch List shares by evaluating Town Centre Securities (TOWN).

Here are the initial attractions that prompted this research:

* Illustrious payout history: The business boasts an unbroken 57-year record of dividend payments.

* Substantial long-term shareholders: The founding/managing family boast a sizeable 52%/£78m investment.

* Discount to book value: The 281p shares trade at a 25% discount to the group’s 375p net asset value.

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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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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Tristel: H1 Results Boast 24% Profit Jump Before North American Costs As EPA Decision Now Set For 16 April

23 February 2018
 By Maynard Paton

Update on Tristel (TSTL).

Event: Interim results and shareholder presentation for the six months to 31 December 2017 published 20 February 2018

Summary: These first-half figures were slightly better than I had expected, with December’s AGM statement having downplayed the group’s underlying progress. Welcome revenue advances — both in the UK and abroad — were delivered by TSTL’s main disinfectant products, while adjusted profit would have soared 24% were it not for the costs of entering North America. Sadly it remains anyone’s guess as to when those costs will eventually see any payback. Nonetheless, the first North American milestone is looming — an EPA product approval decision is expected on 16 April, and the share price is optimistic. I continue to hold.

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James Latham: The Family Owns 50%-Plus And Has Delivered 10% Long-Term Dividend Growth

15 February 2018
By Maynard Paton

Today I’m re-starting my hunt for Watch List shares with a look at James Latham (LTHM).

Here are the initial attractions that prompted this research:

* Owner-friendly management: The Latham family has £75m-plus riding on the share price and appear to run the business in a sensible (and LTIP-free) manner.

* Respectable track record: Recent decades of the group’s 261-year history have witnessed average dividend growth of approximately 10% a year.

* Asset-rich accounts: The books boast a sizeable cash position, freehold assets and a share count that has not changed since at least 1994.

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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