Maynard Paton | Page 25 | Quality UK Investment Blog

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.

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.

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.

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.

Bioventix: £1m Special Dividend Declared As H2 Margin Hits 80%

26 October 2016
By Maynard Paton

Quick update on Bioventix (BVXP).

Event: Preliminary results and shareholder presentation for the year to 30 June 2016 published 17 October 2016

Summary: The antibody developer had already said this statement would reveal bumper results, but the figures were still better than I had expected. Although progress was helped by post-Brexit currency movements, it was clear the underlying business delivered yet another robust performance. The financials remain extremely impressive, with the second-half operating margin hitting an incredible 80%. The icing on the cake was management underpinning its confidence with the declaration of a welcome £1m special dividend. I continue to hold.

Tristel: UK Revenue Improvement Confirmed As Management Issues Bold New Projections

21 October 2016
By Maynard Paton

Long update on Tristel (TSTL).

Event: Audited results, annual report and shareholder presentation for the year to 30 June 2016 published 17 October 2016

Summary: July’s upbeat trading statement from this medical disinfectants specialist had already signalled these record results. The finer details revealed UK revenue enjoying a healthy second-half performance and overseas operations progressing consistently well. The financials appear to be in order, too, although cracking the United States is taking a bit more time and money than expected. The executives remain confident and have issued bold new projections, which is all reflected by the elevated share-price rating. I continue to hold.

Bioventix: I Could Not Resist Paying Up For Growth

10 October 2016
By Maynard Paton

Today I’m reviewing another of my recent investments.

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

I purchased my BVXP shares at an average price of 1,133p (including all costs) during August 2016. The bid price is presently 1,250p and the position currently represents approximately 5% of my portfolio.

I have to admit, BVXP is somewhat racy in comparison to many of my existing holdings. In particular, I may have paid ‘a high price for a cheery consensus’ following the company’s impressive progress.

There are also drawbacks involving a limited customer base and certain product revenue about to cease. The business is not that straightforward either — it develops sheep monoclonal antibodies for use in blood tests.

Nonetheless, supporting the notion that BVXP has above-average investment potential is what seems to be a very respectable competitive position, the benefit of long-term royalty income, some impeccable financials and leadership through the group’s founder.

Q3 2016: 1 Buy, 1 Sell, 1 Top-Up, 1 Top-Slice… Plus A 77% Success Rate

30 September 2016
By Maynard Paton

Happy Friday! I hope you continue to find my Blog useful… and that your portfolio has recovered following the Brexit turmoil!

I wrote in my last portfolio update that 2016 was fast becoming a somewhat grim year for me. I was down 5% at the end of March and then 10% down at the end of June…

…but the ‘Brexit bounce’ has since brought me back to break-even. That’s hardly a fantastic performance given what the wider market has achieved, but it’s a much better position than just three months ago.

Anyway, during the third quarter I bought a new share, topped-up an existing holding, top-sliced another existing position, and sold out completely of a further existing position.

Furthermore, I’ve spent some time evaluating my longer-term record of stock-picking… just to make sure that I have actually done reasonably well at this investing lark!

Andrews Sykes: The Question Now About This 6.9% Yielder

29 September 2016
By Maynard Paton

Quick update on Andrews Sykes (ASY).

Event: Interim results for the six months to 30 June 2016 published 29 September 2016

Summary: A very satisfactory set of figures, with the likelihood now that ASY is on course to report its best year since 2008. The group, which supplies air conditioners, heaters and pumps for hire, said all of its divisions made progress and that recent trading had been “positive”. The question now is whether ASY can deliver sustained earnings growth alongside its chunky dividend payments and 6.9% yield. I continue to hold.

FW Thorpe: Record Results Once Again As Dutch Division Shoots The Lights Out

23 September 2016
By Maynard Paton

Quick update on FW Thorpe (TFW).

Event: Preliminary results for the year to 30 June 2016 published 22 September 2016

Summary: A very satisfactory set of record figures from this lighting specialist, underpinned by last year’s Dutch acquisition that appears to have delivered 75% annualised profit growth. TFW’s other two divisions reported positive progress, too, while the balance sheet remains awash with surplus cash and investments. Although the near-term valuation appears rich, the group’s decent financials, illustrious dividend and veteran board remain very captivating. I continue to hold.

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.

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.

M Winkworth: Cash Rich, High Margin And A P/E Of 7

14 September 2016
By Maynard Paton

Quick update on M Winkworth (WINK).

Event: Interim results for the six months to 30 June 2016 published 13 September 2016

Summary: A quite satisfactory statement that suggested this London-dependent estate agency should be able to cope with the capital’s slower property market. Indeed, the business appears keen to expand and the pace of its new franchisee openings may in fact accelerate. Margins remain high, the balance sheet remains strong and a P/E of 7 seems to price in a lot of bad news. I bought more shares in August and continue to hold.

City Of London Investment: The Staff Don’t Deserve This Extra Bonus And I Hope It Is Voted Down

13 September 2016
By Maynard Paton

Quick update on City of London Investment (CLIG).

Event: Final results for the year ending 30 June 2016 published 12 September 2016

Summary: I’m starting to go off City businesses. First it was Record and now it is CLIG that wants to pay its employees a lot more… despite profits at both having gone nowhere for years. Sadly, CLIG’s revised bonus plan has offset some promising news of greater funds under management and the real prospect (finally!) of a dividend lift. I can only hope the fund manager can soon deliver the much-needed performance to justify the extra bonus cost. I continue to hold.

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.

Maynard Paton: “Hi Owain Yes, the property market will have influenced MTVW’s gross margin. But the board has said multiple times MTVW…” 09 Nov 2024

Owain B: “Great update as always, thank you Maynard. Isn’t the simplest explanation for the disappointing property sales gross margin compared to…” 09 Nov 2024

Maynard Paton: “Mountview Estates (MTVW) AGM attendance 14 August 2024 Below are my notes from MTVW’s 2024 AGM. All five directors were…” 08 Nov 2024

Maynard Paton: “Just a quick follow-up on purchase costs. I mentioned in the blog post above that MTVW spent £45m last year…” 03 Nov 2024

Maynard Paton: “Thanks Vic!” 03 Nov 2024

Victor Shirley: “Thank you for the detailed analysis on Mountview Estates Maynard. We’ll add to our holding.” 03 Nov 2024

Maynard Paton: “Hi Bertie Thanks for the message. On the EPC, I think Allsop has touted a £10k EPC estimate in the…” 03 Nov 2024

Bertie Ellis: “I think the upgrading of the EPC from E to C will be much more than the Rightmove estimate of…” 03 Nov 2024