27 August 2022
By Maynard Paton
I have recorded another pilot episode of The Private Investor’s Podcast with my good friend Mark Atkinson. We talked about Somero Enterprises and the investment potential of the company’s concrete levelling machines:
BIOVENTIX: H1 2022 Reveals Dividend Up 21% And ‘Exciting’ Tau Biomarker Although Cash At 6-Year Low Now Reduces Special-Payout Prospects
26 August 2022
By Maynard Paton
Results summary for Bioventix (BVXP):
- An unspectacular H1 performance, albeit accompanied by a 21% dividend lift, after further pandemic disruption left revenue down 8% and adjusted profit down 9%.
- Muted progress from vitamin D and other established antibodies continues to leave near-term growth dependent on the fast-selling troponin product.
- The “exciting” potential of a Tau biomarker alongside the BVXP website selling pyrene test kits suggest positive developments within the research pipeline.
- Net cash at £5m is the lowest for six years, and combined with standstill earnings seems likely to reduce the size of any FY 2022 special payout.
- Troponin’s finite income and a resultant sum-of-the-parts valuation do not indicate an obviously compelling £33 share price. I continue to hold.
[SharePad] Screening For My Next Long-Term Winner: CERILLION
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25 August 2022
By Maynard Paton
Another month and another round of ‘back to basics’ filtering.
Introduced earlier this year to identify James Halstead, this screen shortlists companies that offer cash-flush balance sheets, robust margins and dependable dividends. SharePad returned 19 matches:
I selected Cerillion because the shares were among the few on the shortlist to have moved higher this year. I passed on EMIS and Cardiff Property because the former was subject to a bid and the latter was too small.
Cerillion’s shares have actually five-bagged since the pandemic lows of March 2020 and remain very close to their £11 all-time high:
Let’s take a closer look.
Read my full Cerillion article for SharePad.
Maynard Paton
ANDREWS SYKES: FY 2021 Discloses UK Hire Revenue Rebounding 17% To Deliver 34% Margin While Dividend Yield Remains Near 5% Despite Potential FY 2022 Heatwave Bonanza
18 August 2022
By Maynard Paton
Results summary for Andrews Sykes (ASY):
- An encouraging performance, with profit recovering 35% following the pandemic to almost match the record set during FY 2018.
- Additional reporting disclosures revealed ASY’s main UK Hire division enjoyed sales rebounding 17% and a wonderful 34% margin.
- European operations expanded to 27% of group revenue following very strong progress, although Middle Eastern woes included an extra £1m provision.
- The books remain in good shape, with useful cash generation lifting net funds to £29m and perhaps increasing the possibility of another special dividend.
- An estimated 13-14x P/E and near-5% yield hardly seem expensive given the appealing financials, potential for an FY 2022 heatwave bonanza and scope for further European expansion. I continue to hold.
TASTY: £8m Market Cap Could Still Be Remarkably Cheap After FY 2021 Reiterated 5-6 New Restaurants Despite ‘Prevailing Economic Uncertainties’
04 August 2022
By Maynard Paton
Results summary for Tasty (TAST):
- The absence of pandemic restrictions ensured a bumper H2 performance that TAST acknowledged may not be repeatable during the current year.
- Higher wages, rising utility costs, “prevailing economic uncertainties” plus a June update that did not refer to H1 trading could be other signs of FY 2022 not being that profitable.
- Rent reductions of 27% now appear to be temporary, and explain why total lease obligations remain in excess of £50m.
- Repaying an emergency loan, appointing a new executive alongside plans to open 5-6 new restaurants confirm management’s mindset has moved from ‘survival’ to ‘recovery’.
- Although the £8m market cap could be remarkably cheap if TAST ever sustains a modest margin on decent sales, other shares could offer more dependable returns. I continue to hold.
FW THORPE: Record H1 Results Reveal Thorlux Orders Up 25% And Another Special Dividend As Companies Scramble For Energy-Efficient Lighting
01 August 2022
By Maynard Paton
Results summary for FW Thorpe (TFW):
- A record H1 performance bolstered by the acquisition of Spanish firm Zemper and complemented by another special dividend.
- Progress at Thorlux continues to be modest, but a new MD, an order book up 25% alongside growing demand for energy-efficient lighting support future optimism.
- Dutch profit was assisted by the absence of earn-out provisions, with new manufacturing facilities at Famostar underpinning “continued rapid sales growth“.
- Net cash remained significant at £37m after extra stock investment suggested component shortages were no longer as severe as they once were.
- A P/E of 27 seems generous, but could reflect significant ‘ESG’ attractions as TFW showcases its environmental credentials to quoted companies scrambling for LED lighting. I continue to hold.
[SharePad] Screening For My Next Long-Term Winner: LIONTRUST ASSET MANAGEMENT
28 July 2022
By Maynard Paton
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Difficult market conditions have prompted yet another bout of ‘back to basics’ filtering.
Introduced the other month to identify James Halstead, this screen short-lists companies that offer cash-flush balance sheets, robust margins and dependable dividends. SharePad returned 19 matches:
I selected Liontrust Asset Management because the shares were highlighted by ace fund manager Keith Ashworth-Lord within his latest Buffettology fund factsheet. Mr Ashworth-Lord wrote:
“Liontrust Asset Management (-15.5%) announced final results which showed substantial growth in average AUM (+43%), revenue (+41%), dividends per share (+53%) and free cash flow (+122%).
The reaction of Liontrust’s share price — which will be seen by the teenage scribblers in the City as high beta — is symptomatic of current market sentiment. As a result, the shares trade on a trailing free cash flow yield of 15% and a trailing dividend yield of 8%. Talk about ‘value’.”
Let’s take a closer look.
Read my full Liontrust Asset Management article for SharePad.
Maynard Paton
[Podcast] TRISTEL With Mark Atkinson And Maynard Paton
27 July 2022
By Maynard Paton
I have recorded another pilot episode of The Private Investor’s Podcast with my good friend Mark Atkinson. We talked about Tristel and the company’s hospital disinfectants and shareholder open day:
M WINKWORTH: Outstanding FY 2021 Heralds Promising FY 2022 Following 23% Q1 Dividend Lift And Prospect Of Sales Again Exceeding Lettings
08 July 2022
By Maynard Paton
Results summary for M Winkworth (WINK):
- “Extraordinary levels of activity” due to pandemic stamp-duty reductions ensured an outstanding FY 2021 with underlying profit up 167%.
- Talk of sales income again exceeding lettings income plus lifting the Q1 2022 dividend by 23% underpinned a promising FY 2022.
- Earnings at the company-owned Tooting office may have slumped during the year, although the effective return on the branch’s valuation remains impressive.
- A super 34% margin, net cash at more than 20% of the share price and trade receivables at just 7% of revenue leave the accounts in good order.
- A possible 9-12x P/E and 6% yield match WINK’s past rating as investors presumably worry about potential problems within the housing market. I continue to hold.
Q2 2022: 8 Years Of Special Dividends
30 June 2022
By Maynard Paton
Happy Thursday! I trust your shares continue to perform better than mine during 2022.
A summary of my portfolio’s progress:
- Q2 return: -2.9%*.
- Q2 trades: None.
- YTD return: -15.7%* (FTSE 100: -1.0%)
- YTD winners/losers: 2 winners vs 9 losers.
(*Performance calculated using quoted bid prices and includes all dealing costs, withholding taxes, broker-account fees and paid dividends)
My portfolio’s 2.9% Q2 drop leaves my shares 15.7% lower this year and nursing their worst half-year decline since I commenced this blog at the start of 2015. I think I have to go right back to the second half of 2011 to find a similarly underwhelming six-month performance.
At least Q2 did not reveal any major RNS disappointments. Andrews Sykes, Mountview Estates and M Winkworth in fact lifted their ordinary dividends while S & U and Tasty disclosed promising progress despite the uncertain economy.
But the market’s disillusionment towards smaller companies is leaving many of my shares marooned at best.
S & U: Record Dividend Delivers 6% Yield After FY 2022 Results Signal Higher Expected Write-Offs And Risk Of ‘Adverse Economic Environment’
28 June 2022
By Maynard Paton
Results summary for S & U (SUS):
- A “lower than normal” bad-debt provision underpinned a record full-year profit, which in turn supported fresh highs for net asset value (NAV) and the dividend.
- Very mixed signals are emerging from the main motor-loan division, with encouraging collection rates offset by “a more heightened risk of an adverse economic environment” and higher expected write-offs among new loans.
- Further surplus cash from the motor-loan division was redirected into the property-loan subsidiary, which reported a bumper performance and prompted optimistic near-term management predictions.
- ROCE levels remain modest and suggest SUS’s inherent value is biased towards the asset value of its loan book rather than annual earnings.
- Despite current-year profit running “above budget“, the £21 shares trade at 1.24 times NAV and offer a 6% yield. I continue to hold.
[Podcast] PHOTO-ME INTERNATIONAL With Mark Atkinson And Maynard Paton
19 June 2022
By Maynard Paton
I recently recorded a pilot episode of The Private Investor’s Podcast with my good friend Mark Atkinson. We talked about Photo-Me International and the investment potential of passport photos and self-service washing machines:
[SharePad] Screening For My Next Long-Term Winner: INTEGRAFIN
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19 June 2022
By Maynard Paton
Difficult market conditions for highly-rated ‘quality’ shares have prompted further back-to-basics filtering.
Hence a new screen to identify companies offering robust financials, respectable growth, useful director ownership… and a reasonable valuation.
The exact filter criteria I employed for this search were:
- Net borrowings less total leases of no more than zero (i.e. a net cash position excluding IFRS 16 lease obligations);
- An operating margin of 20% or more;
- A five-year uplift to operating profit of at least 50%;
- Management owning at least 10% of the company, and;
- A forecast P/E of 20 or less.
I applied the screen the other day and SharePad returned 17 matches:
I selected IntegraFin because:
- The £1 billion market cap was among the largest on the list;
- The operating margin was a remarkable 78%, and;
- The shares had dropped 49% from their five-year high.
Let’s take a closer look.
Read my full IntegraFin article for SharePad.
Maynard Paton
CITY OF LONDON INVESTMENT: FuM Drops 13% To Below $10b After H1 2022 Discloses 49% Margin, Welcome Special Dividend And (Finally!) Some New Client Money
19 June 2022
By Maynard Paton
Results summary for City of London Investment (CLIG):
- The Karpus merger ensured impressive headline progress, but this H1 performance was almost identical to the preceding H2 as funds under management (FuM) remained at $11b.
- Wishful thinking perhaps, but two consecutive quarters of net FuM inflows following consistent FuM outflows may signal clients re-appraising CLIG’s ‘value’ approach.
- Rough market conditions during the subsequent H2 will test CLIG’s investments, with FuM dropping 13% to below $10b not indicating obvious outperformance.
- A wonderful 49% margin and net cash of £25m funding a welcome £7m special dividend suggest the accounts can survive any further market weakness.
- Although the possible P/E is 11 and the yield tops 7%, the shares have been rated modestly for years as major new clients remain extremely elusive. I continue to hold.
MINCON: FY 2021 Reveals H2 Mining Sales Up 30% And ‘Outstanding’ Greenhammer Tests Yet Obvious ‘Moat’-Like Financials Remain Highly Elusive
02 June 2022
By Maynard Paton
Results summary for Mincon (MCON):
- A better-than-expected performance, bolstered by a record H2 and perhaps a cracking Q4 following less pandemic disruption.
- Positive progress was recorded at all three product divisions, with higher commodity prices pushing H2 mining sales up 30%.
- Encouraging development news included the long-awaited Greenhammer system delivering “outstanding” test results and potentially becoming available to purchase this year.
- Despite the long-term commitment to first-class product manufacturing, MCON’s financials sadly still lack signs of an obvious ‘moat’.
- The shares do not appear outrageously expensive, assuming H2 extrapolations and upbeat FY 2022 trading do indeed support a 15x P/E. I continue to hold.
