Maynard Paton | Page 29 | Quality UK Investment Blog

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.

World Careers Network: Better-Than-Expected Results Give Cash-Adjusted P/E Of Less Than 7

27 April 2016
By Maynard Paton

Quick update on World Careers Network (WOR).

Event: Interim results for the six months to 31 January 2016 published 26 April

Summary: These figures were not as bad as I had feared, given WOR’s previous results had confessed to higher costs and lower profit. The outcome for the current year looks set to be better than I had anticipated, too. Notably, revenue moved higher despite one of the software group’s largest customers significantly reducing its payments. Meanwhile, the accounts remain cash-rich and the underlying P/E is less than 7. I continue to hold.

Getech: The Dividend Has Gone But All Is Not Lost Just Yet

07 April 2016
By Maynard Paton

Quick update on Getech (GTC).

Event: Interim results for the six months to 31 January 2016 published 05 April

Summary: These interim results were poor, but that was no great surprise given GTC supplies specialist data and services to the battered oil and gas sector. At least the promise of cost cuts and a few new contracts ought to signal a better second half. Valuation remains tricky here with reported losses and a scrapped dividend, but the asset-rich balance sheet should see the business through the downturn. I continue to hold.

Q1 2016: 1 New Buy, 2 Top-Ups And 2 Top-Slices

31 March 2016
By Maynard Paton

Happy Thursday! I hope you continue to find my Blog useful… and that your portfolio has started 2016 better than mine!

After enjoying a decent gain for 2015, I suppose it was inevitable I’d soon endure a rough time. And sure enough, some of my larger winners of last year succumbed to the market’s sharp falls during January and February.

That said, my portfolio has not been a total disaster — I’m down 5% so far this year. It’s not a great performance, but I am generally happy with the shares I own and I look forward to some sort of recovery!

Tasty: Profit Up 28% But I Am Not Entirely Satisfied

30 March 2016
By Maynard Paton

Quick update on Tasty (TAST).

Event: Preliminary results for the 52 weeks to 27 December 2015 published 30 March

Summary: An acceptable but not a spectacular set of results from this restaurant group, with the second half showing a slower rate of expansion. I also note revenue per outlet has declined while management is hinting strongly at greater investment spend. Nonetheless, the board is a class act, the opening schedule for new restaurants is accelerating and the longer-term potential remains sizeable. I continue to hold.

M Winkworth: I Just Don’t Know If Online Rivals Will Crush These 31% Margins

23 March 2016
By Maynard Paton

Quick update on M Winkworth (WINK).

Event: Final results for the year to 31 December 2015 published 23 March

Summary: A somewhat better set of figures than I had been anticipating from this estate-agency franchising business. The second-half looks to have been bolstered by extra franchisee fees, which helped WINK register a decent second half and improve its cash flow. Margins and returns on equity remain superb at 31%, the shares do not seem over-priced — but will the Internet crush the income of traditional estate agents? I just don’t know, but continue to hold.

FW Thorpe: A Welcome 2p Special Dividend But The Board Could Pay Far More

21 March 2016
By Maynard Paton

Quick update on FW Thorpe (TFW).

Event: Interim results for the six months to December 2015 published 21 March

Summary: A respectable but not a spectacular set of figures, with underlying revenue and profit both advancing by 5%. Although progress at the group’s main Thorlux division looks to have stagnated, last year’s Dutch acquisition appears to be performing very well. A special 2p per share dividend was a welcome move, but a cash pile of 30p per share suggests much more could be distributed. I continue to hold.

French Connection: The Cash Pile Really Can’t Afford Another £9m Outflow

15 March 2016
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Preliminary results for the year to January 2016 published 15 March

Summary: An improved set of figures following last year’s awful interims. However, the numbers do suggest FCCN experienced a weaker Christmas while the cash pile really can’t afford another £9m outflow. Online sales were miserable, too. Still, Retail gross margins during H2 were the highest since 2011 and new board members may well help the moribund management. This value investment still requires inordinate patience… and I continue to hold.

Mincon: Subdued Q4 Hidden In Satisfactory 2015 Results

10 March 2016
By Maynard Paton

Quick update on Mincon (MCON).

Event: Preliminary results for the year to December 2015 published 9 March

Summary: A satisfactory set of results from this specialist drill manufacturer. Sadly the bumper Q3 reported in November was followed by a more subdued Q4, so I’ve had to trim my valuation estimates a little. Nonetheless, the shares do not appear outlandishly valued and I’m hopeful the stronger second-half bodes well for 2016. The books are still cash rich and management has started to improve cash flow, although the dividend remains at a standstill. I continue to hold.

Tristel: These Results Were A Letdown And I Have Been Selling

24 February 2016
By Maynard Paton

Quick update on Tristel (TSTL).

Event: Interim results published 24 February

Summary: Oh dear — these results were something of a letdown :-( It seems TSTL’s projections of c%15 revenue growth have been dropped as UK turnover starts to stall. At least now we know why December’s AGM statement never mentioned sales! A startling £1m share-based payment and a signal for a pedestrian 5% dividend lift were other features I did not expect. Though I still hold TSTL, I have been selling during recent weeks and sold more today.

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