Maynard Paton | Page 23 | Quality UK Investment Blog

Tasty: Grim H1 Results Reveal Huge £9.3m Write-Off, But Recovery Hopes Remain As Management Finally Shows Greater Turnaround Urgency

12 September 2017
By Maynard Paton

Quick update on Tasty (TAST).

Event: Interim results for the 26 weeks to 02 July 2017 published 12 September 2017

Summary: These results were always going to be somewhat grim, and news of a £9.3m write-off suggests about a third of TAST’s restaurant estate has now suffered trading problems during the last 18 months. At least the board is currently showing greater urgency with its turnaround plan and I would like to think these figures mark the low point for the group’s finances. I continue to believe the long-term upside could be considerable if a successful recovery one day prompts further restaurant expansion. I continue to hold.

Mincon: H1 Revenue Up 29% As New Projects Set To Herald Further ‘Meaningful’ Growth

06 September 2017
By Maynard Paton

Quick update on Mincon (MCON).

Event: Interim results for the six months ending 30 June 2017 published 17 August 2017

Summary: A very welcome set of results, which I calculate included the drill specialist’s best-ever quarter as a quoted company. Revenue and profit enjoyed significant advances, and it appears the group’s mining customers are now happy to place greater orders following the sector downturn of the last few years. Also pleasing was the improvement to cash flow and the possibility of certain new projects providing further “meaningful” growth. I continue to hold.

City Of London Investment: Dividend Lifted For First Time Since 2011 As New Bonus Scheme Gets Ready To Pinch 2% Of Revenue

03 August 2017
By Maynard Paton

Quick update on City of London Investment (CLIG).

Event: Trading statement and shareholder presentation for the year ending 30 June 2017 published 19 July 2017

Summary: Earlier updates had already signalled these summary annual results would be positive. However, the fund manager’s progress was supported entirely by favourable markets and currency movements — the year actually witnessed a net outflow of client money. Still, the icing on the cake was the first dividend lift for six years and, despite the share price climbing since this time last year, the payout still supports a 6% income. The presentation also outlined the potential cost of the new staff bonus scheme, and I am hopeful the cited 2% of revenue will not eventually rise towards the scheme’s 5% limit. I continue to hold.

Tristel: Second Open Day Showcases Positive US Promise In The Car-Park Marquee

26 July 2017
By Maynard Paton

Long update on Tristel (TSTL).

Event: Shareholder open-day presentation and trading update for the year ending 30 June 2017 published 19 July 2017

Summary: Similar to last year’s open day, this was a very useful shareholder event that accompanied a better-than-expected trading update. However, I thought the lack of any reference to UK revenue was odd and I await October’s full-year results for the finer details. For now at least, the disinfection specialist appears on course to meet its three-year targets and there are some promising developments with the planned venture into North America. Plenty of optimism, though, appears to be priced into the shares. I continue to hold.

Daejan: Annual Results Defy Management’s Brexit Gloom As NAV Reaches New £102 Per Share High

13 July 2017
By Maynard Paton

Quick update on Daejan (DJAN).

Event: Preliminary results for the year to 31 March 2017 published 12 July 2017

Summary: This time last year DJAN’s management was full of Brexit gloom, but here we are now with the commercial property group declaring new highs for revenue, net asset value and the dividend. Of course, the board’s caution may eventually prove to be shrewd, and I’m hopeful the veteran executives will be able to navigate through any wider property uncertainty — assisted in part by the firm’s relatively low level of debt. The shares trade at 63% of net asset value and I continue to hold.

Q2 2017: No Buys Or Sells, Plus Business ‘Moats’ Versus Motivated Bosses

30 June 2017
By Maynard Paton

Happy Friday! I hope you continue to find my Blog useful… and that your portfolio is still performing well during 2017.

After experiencing a buoyant start to the year, I am pleased my investments have generally held on to their value during the last few months.

All in all, the recent news from my portfolio has not been too bad, with a few minor share-price gains helping my performance improve to 9.5% for the year so far.

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.

Mountview Estates: Bumper H2 Rescues 2017 Performance And Pushes Potential NAV To £206 Per Share

20 June 2017
By Maynard Paton

Quick update on Mountview Estates (MTVW).

Event: Preliminary results for the twelve months to 31 March 2017 published 15 June 2017

Summary: These figures were somewhat better than I had expected. The regulated-tenancy property trader produced a record level of revenue during the second half to counterbalance a rather disappointing first half, and the end result was not far off the very strong numbers delivered for the previous year. I was also pleased net asset value advanced further to a new high while borrowings were reduced to a fresh low. My updated sums now point to a possible NAV of £206 per share based on the firm’s previous gains on sold properties. I continue to hold.

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.

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.

Andrews Sykes: Best-Ever H2 Helps P/E Re-Rate To 15

23 May 2017
By Maynard Paton

Quick update on Andrews Sykes (ASY).

Event: Final results for the twelve months to 31 December 2016 published 11 May 2017

Summary: These results were very satisfactory and showcased ASY’s best-ever second-half. Notably, this supplier of air conditioners, heaters and water pumps said “robust operational management” rather than “extreme climatic conditions” had supported its positive progress. The accounts remain in good shape, too. With earnings now at their highest level since 2008, the share-price has re-rated to a P/E of 15. I continue to hold.

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.

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.

M Winkworth: Annual Profit Dives 26% But Performing Better Than Foxtons

06 April 2017
By Maynard Paton

Quick update on M Winkworth (WINK).

Event: Final results for the twelve months to 31 December 2016 published 30 March 2017

Summary: These were never going to be great figures from the London estate-agency firm. However, at least WINK outperformed larger rival Foxtons while the favourable economics of the group’s franchising model remain quite clear. True, the immediate outlook for WINK is rather mixed and there is online competition to consider, too. However, all that seems priced into the P/E of 8 and 7%-plus income. I continue to hold.

Q1 2017: 1 New Buy And 1 Sell

31 March 2017
By Maynard Paton

Happy Friday! I hope you continue to find my Blog useful… and that your portfolio has started 2017 in good shape!

After experiencing a somewhat mixed performance during 2016, I am pleased my investments have generally performed well during the last few months.

Certainly the two new holdings I acquired last year — BrainJuicer and Bioventix — have helped powered my portfolio higher of late. And up until the other day at least, this full-time investing lark was becoming quite comfortable…

But then came another reality check.

Sadly I’ve been humbled yet again by a profit warning — on this occasion from Tasty.

Still, I have survived various ups and downs before… and I need no reminding that it was only nine months ago that my entire portfolio was looking rather sorry.

Anyway, I’m up 7.4% so far for 2017, and my portfolio has not witnessed too much trading during the last three months. I bought one brand-new holding and sold another holding entirely.

Maynard Paton: “Hi Andrew, Yes, management has always prided itself on the group’s growth history but the significant dividend lift last year…” 28 Dec 2024

Andrew Rolfe: “An excellent in-depth analysis of TSTL, Maynard. TSTL had a very turbulent month up to Christmas, but bounced back strongly…” 28 Dec 2024

Maynard Paton: “System1 (SYS1)   AGM attendance and Result of AGM hosted/published 25 September 2023 I attended SYS1’s AGM during September and the…” 24 Dec 2024

Patrick Leach: “System 1 was also mentioned relatively recently on the Rest is Entertainment podcast (the episode featuring Mike Tyson), again with…” 23 Dec 2024

Maynard Paton: “Thanks Charles. Here is the link. Two choice paragraphs in a very informative and well-written article: “System1 asks the same…” 21 Dec 2024

Maynard Paton: “Hi John, well spotted. I think I misread my calculator and multiplied the actual £62k (then 1.13m shares * 5.5p)…” 21 Dec 2024

John Walter: “I saw your good article on Colefax but you made one glaring mistake saying that David Greens dividend is £600,000-it’s…” 21 Dec 2024

Charles East: “Hi Maynard There is a new FT article that mentions System 1. It’s called “The race to make the greatest…” 14 Dec 2024