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just got over carillion now cnct seems to be in the same old cart.
Just another old world dinosaur outsourcer basket case tied to the Brexit economy future?
Oh dear.........
The question is how much free cash will it generate over say the next 5 years. At present it is enough to support the dividend and loan repayment and the pension recovery should complete shortly which will put another �4m on the cashflow too as it won't be paying that in a year to 18 months. The risks are implied in the 13% dividend. I think it now looks cheap
If Connect Group can't sell their assets then the dividend should get cut and with operational problems afoot, then investors are speculating the cut in dividend is becoming a reality. This poses a risk the shares could slide further. We all know the physical newspaper days are outnumbered.
Unfortunately this looks like the cartoon character hanging in mid air after going off the cliff. As long as they keep the dividend going - and guidance of circa �40m profit still looks 9p EPS, but where is it going - with the newspapers on a slope - they just haven't grown the alternative business - selling off acquired books and education whilst clinging to a notoriously tricky carrier market for smaller players - think DX, City Link. Turnover/profit of these is still micro compared to the papers & mags. I'd love to bag a bargain, but this may be the run out of road sharp descent point !
spread 75.00-76.00 i got offer quote @ 75.075p, below mid price. MMs playing games here. bounce or sub 70p coming?
Orangetree, Connect Group will become a relic of the past. P.S. Long-term shareholders should avoid this stock. They have been saying this since it was spun off from W H Smith, [That, presumably, was why it was spun off]. Those that brought in when it was spun off have recouped all the money their shares cost through their divi's. How many shares can you say that about? You write them off at your peril.!!!!!!
I think there is some value in the short-term because of future asset disposal which would reduce their net borrowing further and maintain 10% dividend yield (at least for another year or two). And after 2019, the company is likely to experience a terminal decline. The newspaper distribution business will be replaced by digital, as the readers form of choice. As to the share price, I can see it appreciate 20%-30% at best, due to maintaining dividends for two years, but afterwards, Connect Group will become a relic of the past. P.S. Long-term shareholders should avoid this stock. For full analysis of Connect Group and other companies� result analysis, click http://bit.ly/2li7P8i I did an analysis on WH Smith when they released their result http://bit.ly/2yiGpUt
debt reduce, pe 8, yield 10%, yield cover 1.12,
ROCE is 30 per cent .. very good? good cash flow
Taken from RNS 25th April 2017 half year results. Full year results due 26/10 Continuing Adjusted results(1) Six months to 28 Feb 2017 Six months to 29 Feb 2016 Change Revenue �911.8m �916.8m -0.6% Operating profit �26.6m �27.8m -4.4% Profit before tax �23.3m �24.5m -4.8% Earnings per share 7.6p 8.0p -5.3% Statutory results Revenue �940.5m �948.4m -0.8% Operating profit �28.3m �30.6m -7.5% Profit before tax �18.1m �19.2m -5.3% Earnings per share 5.9p 6.3p -6.3% Interim dividend per share 3.1p 3.0p 3.3% Free cash flow �12.4m �18.0m -31.2% Net debt �149.9m �160.9m Hope that helps.
I was looking at the trading announcement on 24/7/17 on the company website. Trying to work out how much profit was made, as they only state the revenue decline? Thought it was strange they only state revenue, but not profits?Is there another source of information?
I believe they do have a very good strong management team but the main operation (and risk) is that of the gradually disappearing newspaper delivery market (spun from W.H.Smiths). They have made natural forays for a replacement existence into library books, education equipment and parcels to utilise their distribution strengths. However these markets, particularly parcels, are exceptionally tough and the reasonable area of education has now been sold. This leaves them with a tough job to replace profits as fast as they are disappearing. The good news is that they have done a great job implementing efficiencies to stem the newspaper decline. The bad news is they are finding it increasingly tough to fund the replacement, and people like amazon etc are only going to give couriers cake crumbs, let alone driver related issues. Just look at the mess poor management made of the likes of Citylink and DHL. The crunch point is slowly arriving as the dividend has steadily increased faster than profits. If the profits actually decline this will shortly hit the fan with uncovered dividends and would cause a rebalancing of the dividend by perhaps half with a corresponding drop in the share price by half as well! The other aspect limiting wriggle room is the enormous liabilities, to be fair these were inherited when spun off, but from a negative equity position has only moved to around £11m which would equate to just around 4 to 5p per share of assets. It's a contrarian call to buy them, and as the stakes go up and down the share price therefore reacts with twice the volatility due to this exaggerated risk 'on or off' either way. I bought the shares for about 70p back around 2009 so have nearly covered the cost with dividends received, and so are happy to keep them - but I would be increasingly nervous about buying them now until some sort of progress or a more positive revenue stream is found.
We are starting research in to this share today. Any ideas as to relentless fall in shareprice and high divvy being cut.
Volume with pass my parcel is just not there. Diversification isn't going to plan imo. But at these levels dividend % is fantastic
I have watched this on a steady downward trajectory for almost a year. Anybody know why as I cannot find any particular reason for its steady decline.??
The share price seems to only know how to go in one direction. Tome for a BOD change.
Nice divi share this. 3.1p interim divi coming up, with a yield of 7.5% this share keeps on giving imo.
1m+ volume today, with no significant change in price. The price has been ranging since 2014 and recently the range's upper resistance has moved from 174p down to 168p. This share is for dividend only as there's limited capital growth and shareholder value on offer. PS: Goes ex-dividend on 12th January
Upcoming XD date.
Very busy here.
Historical article going back a few months on CNCT Connect...... Connect delivers TIP UPDATE Connect Group PLC (CNCT) VALUE MEDIUM RISK By Daniel Liberto, 14 October 2015 Our previous tip WE SAID Buy WHEN20 November 2014 PRICE150p (adjusted for rights issue) TIP PERFORMANCE TO DATE+4% Connect's (CNCT) £115m acquisition of next-day delivery service Tuffnells last December looks to have been a smart one. Underlying revenues at the parcel freight business grew 20 per cent, helping to send group adjusted pre-tax profit surging 13 per cent to £57m. Buoyed by the early success of Connect's shift into higher-growth areas, investors propelled the shares up 5 per cent. But the legacy news distribution unit also put in a respectable shift. Despite heavy investment in the 'pass my parcel' service and the absence of last year's World Cup sticker sales, divisional adjusted operating profit fell just 4 per cent. Connect also benefited from £5m of cost savings, which management expects to repeat in the next two financial years. It reckons those extra funds can mitigate falling newspaper sales by bankrolling additional investments, including roughly doubling the number of parcel shops to 6,000 as the company prepares to unveil a new mobile-enabled returns service with a major retailer. Chief executive Mark Cashmore says Connect's aggressive cost-saving strategy should also absorb the impact of the national living wage. Broker Liberum upgraded its adjusted EPS forecast for the year to August 2016 by 2 per cent to 19.5p (FY 2015: 18p). CONNECT (CNCT) ORD PRICE: 156p MARKET VALUE: £381m TOUCH: 152-156p 12-MONTH HIGH: 172p LOW: 124p DIVIDEND YIELD: 5.9% PE RATIO: 17 NET ASSET VALUE: 4p* NET DEBT: £144m Year to 31 Aug Turnover (£bn) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p) 2011 1.73 32.1 12.1 8.0 2012 1.80 36.6 15.2 8.6 2013 1.81 38.9 15.7 9.3 2014 (restated) 1.81 43.1 16.8 8.8 2015 1.88 29.0 9.3 9.2 % change +4 -33 -45 +5 Ex-div: 14 Jan Payment: 12 Feb *Includes intangible assets of £175m, or 78p a share IC VIEW: Connect's shares are marginally up since our buy tip (150p, 20 Nov 2014), but still trade on just eight times forecast earnings and yield nearly 6 per cent. That reflects the big debt pile - exacerbated by the Tuffnells acquisition - and the risks associated with managing a declining business. But judging by these results, Connect is delivering on its promises of careful cost management and expansion into growth markets. Buy.