Maynard Paton | Page 28 | Quality UK Investment Blog

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.

Tasty: I Felt Uneasy Ahead Of These Results And Sold Some Shares

06 September 2016
By Maynard Paton

Quick update on Tasty (TAST).

Event: Interim results for the 27 weeks to 03 July 2016 published 06 September 2016

Summary: These results were very mixed. I am pleased the restaurant chain’s revenue growth has improved following the ‘blip’ in the second half of last year, but disappointed the roll-out plan has slowed a little. Margins have also shrunk due to greater expansion costs. Mind you, the board here remains a class act while the longer-term potential is still considerable. I sold some shares before these results and I continue to hold the rest.

Mincon: Interim Results Show Best Quarter Since Flotation

22 August 2016
By Maynard Paton

Quick update on Mincon (MCON).

Event: Interim results for the six months to 30 June 2016 published 19 August 2016

Summary: A satisfactory set of results, which I reckon included the drill specialist’s best quarter as a quoted company. Revenue and profit continue to head the right way, although working capital and other investments absorbed considerable cash flow. Notable positives from the statement included comments on new product development alongside vague talk of recovering demand from mining customers. I continue to hold.

City Of London Investment: Brexit Should Bolster Earnings And Support A P/E Of 10

27 July 2016
By Maynard Paton

Quick update on City of London Investment (CLIG).

Event: Trading update for the year ending 30 June 2016 published 18 July 2016

Summary: Regular monthly updates had already ensured this statement would not be too surprising. However, CLIG trimmed back its projections for 2017 and despite stagnant funds under management, extra costs are filtering into the business. Fortunately the group should benefit significantly from the weaker pound, and its dollar-based income may currently support a P/E of 10 and 7%-plus yield. I continue to hold.

Tristel: We Celebrated The 3p Special Dividend While Sitting In A Marquee Out In The Car Park

26 July 2016
By Maynard Paton

Long update on Tristel (TSTL).

Event: Shareholder open day, presentation and trading update for the year ending 30 June 2016 published 21 July 2016

Summary: A very useful shareholder event that accompanied a better-than-expected trading update. The bright spot was recovering UK revenue, although management oddly could not explain why the rebound occurred. Another special dividend and the purchase of an Australian distributor were welcome developments, too. Plenty of interesting snippets were disclosed during the day, including certain products having their prices doubled. However, I still disagree with management about past disclosures. I continue to hold.

CLS Holdings: A 23% Discount To NAV And A Boss With A £294m Shareholding

15 July 2016
By Maynard Paton

Today I’m continuing my hunt for Watch List shares with a look at CLS Holdings (CLI).

Here are the initial attractions that prompted this research:

* Illustrious financial progress: The accounts exhibit a 20-year history of rising net asset value alongside a remarkable record of substantial share buybacks.

* Owner-orientated boardroom: The company’s founder retains a £294m/51% stake and continues to serve as an executive director.

* Interesting valuation: The shares have fallen 30% from their high and currently trade at a 23% discount to the group’s 2015 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.

Daejan: Property Estate Tops £2bn While Shares Trade At 53% Of NAV

06 July 2016
By Maynard Paton

Quick update on Daejan (DJAN).

Event: Preliminary results for the year to 31 March 2016 published 06 July 2016

Summary: I have no complaints about these figures. Rental income and operating profit advanced significantly to new all-time highs, while further valuation gains helped the property group’s balance sheet reach a record £91 per share. Debt remains relatively low and I’m trusting DJAN’s veteran management will be able to take full advantage of any ructions in the post-Brexit property market. The shares trade at 53% of net asset value and I continue to hold.

Q2 2016: 3 Top-Ups And 5 AGMs

30 June 2016
By Maynard Paton

Happy Thursday! I hope you continue to find my Blog useful… and that your portfolio has fared much better than mine during the Brexit turmoil!

Yes… a few of my shares have been thumped of late and, for me at least, 2016 is fast becoming a somewhat grim year. At the end of March I was down 5% and by today’s close I was down 10%.

I must confess, the decent gain I enjoyed during 2015 now seems like a lifetime ago :-(

Still, markets never go up — or down — for ever.

I mean, Warren Buffett always reckons we should “be greedy when others are fearful”…

…and all that me, you and every other private investor can do in times like these is to simply find decent companies at attractive valuations and just hold them for the long haul.

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.

Mountview Estates: NAV Could Be £140 Per Share Right Now And £192 Per Share Long Term

16 June 2016
By Maynard Paton

Quick update on Mountview Estates (MTVW).

Event: Annual results for the twelve months to 31 March 2016 published 16 June 2016

Summary: Another record annual performance from the property-trading specialist — although you would never know that from the sparse management narrative. Gross margins remain high, debt continues to be paid off while the share price still languishes well below my assessment of possible net asset value. I continue to hold.

Castings: Satisfactory Results Blessed With 30p Per Share Special Dividend

15 June 2016
By Maynard Paton

Quick update on Castings (CGS).

Event: Annual results for the twelve months to 31 March 2016 published 15 June 2016

Summary: A quite satisfactory set of results from the country’s largest foundry operator. Revenue, profit, the dividend and net cash all headed in the right direction, while a shareholder bonus was news of a 30p per share special payout. However, counter-balancing the 2016 figures was the admission of less work at the higher-margin machining division, which will hurt 2017 progress. Still, the shares do not appear expensive and I continue to hold.

Electronic Data Processing: I Will Happily Swap This 6%-Plus Yield For A Generous Trade Buyer

06 June 2016
By Maynard Paton

Quick update on Electronic Data Processing (EDP).

Event: Interim results for the six months to 31 March 2016 published 02 June 2016

Summary: This was another lacklustre update from the software micro-cap. It was disappointing in particular to see revenue continuing to stagnate and — despite various cost-cutting measures of the past — operating profit dropping lower. Thankfully EDP has put itself up for sale and I am very hopeful a generous trade buyer can be found to conclude what has been a somewhat frustrating investment. In the meantime, there is the prospect of a 6%-plus yield to collect. I continue to hold.

Daejan: This 282-Fold NAV Gain Could Be Just The Beginning

13 May 2016
By Maynard Paton

Today I’m reviewing one of my recent share investments.

The company in question is Daejan (DJAN), which you may recall I added to my watch list last year.

After monitoring the group’s subsequent progress, I decided to buy at an average price of £58 (including all costs) between November 2015 and March 2016. The share price now is £57 and the holding currently represents about 5% of my portfolio.

I have to confess, this new position is not terribly exciting. DJAN is a low-profile business that owns a variety of commercial and residential buildings located mainly in London and the eastern United States.

Nonetheless, I do feel this £929m firm offers many traits of a respectable investment.

Important attractions for me include an impressive record of dividend and net asset growth, a conservatively financed balance sheet, a boardroom staffed by veteran family management, and a modest share-price valuation.

However, I recognise DJAN is by no means a one-way bet.

An obvious danger here is a dependence on what could be a toppy property market. Another potential drawback is that the shares have always appeared ‘cheap’ — due mostly to the directors’ 80% family shareholding and their reticence towards outside investors.

Andrews Sykes: ‘Cash Cow’ Attractions Sustain 7.4% Yield

11 May 2016
By Maynard Paton

Quick update on Andrews Sykes (ASY).

Event: Preliminary results for the year to 31 December 2015 published 11 May

Summary: These results were very acceptable and extended the improved performance reported during September’s interims. However, the comparison to the weak 2014 figures was always going to look good and, notably, ASY still has work to do to repeat its achievements of 2012 and 2013. While long-term growth may be elusive, the accounts remain in top shape and the generous dividends keep on coming. I continue to hold.

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Maynard Paton: “Thanks Boon. Yes, let’s see what the Budget has in store! Fingers crossed the extra tax burden we will have…” 25 Nov 2025

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Maynard Paton: “Hi Peter, I have not looked at the FY results in depth, but the Chinese impact was quite disappointing and…” 01 Nov 2025

Peter: “Hi Maynard, Many thanks for the excellent analysis (as per usual!) What are your thoughts regarding the FY results? I…” 01 Nov 2025