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https://twitter.com/surprised_trade/status/1445999146482208769profitable, cash of £13m & forex due for increase from October.lending in Sept 2021 almost back to pre-covid levels of Sept 2019. loan book is also expected to further recover into FY22 Recovering and set for further growth, new stores etc and forex demand relies on opening up of travel. that begins this month...Retail climbing back to pre covid, so all on track over coming months, it's a 'steady as you go' not a rocket stock
Disappointing though it is to learn of the collapse of 2 energy companies today, the knock on effect is likely to impact further once the cap on prices is lifted on October. 800,000 consumers are affected by todays energy news and although they will not lose supply, it is quite possible that they will be placed on a tarriff that is higher than that to which they are used. The ceiling lift in October could add a further 12% to energy prices and, with the removal of £20 emergency cash each week to benefit claimants, there is a reasonable (though, rather unpleasant) case in favour of RFX for increased turnover.
High gas prices are not as a result of crude oil change, more a reflection of wind; too much in USA from hurricane Ida that knocked out production and too little in Europe to power wind turbines. The world is gradually getting back on its feet and, with the resumption of air travel, confidence to add to my holding in RFX is building.
Downing Strategic, one of the ii's recently invested with a 13 percent stake released a newsletter today with refernce to RFX .. ''Ramsdens’ management team remain confident and are positioning the business for future growth. It has reported a pipeline of six new stores, including debut sites in London and the South East. It i s also investing to further grow the company’s online presence .We believe that Ramsdens is well positioned to resume its growth trajectory as restrictions are lifted, and also outperform weaker competitors as we return to more normalised trading conditions''
https://twitter.com/surprised_trade/status/1432398361617960964
ii's increasing holdings, may provide a clue to expectations ahead...
Downing Strategic Micro-Cap Investment Trust
0% to 13% on 17.6.21
Otus Capital 6% to 10% on 13.7.21
The balance has now shifted, of that I am convinced. With 75% UK population having full vaccine protection, the emphasis is now to ensure that those receiving 1st dose are more than those presenting with Covid19.
Not only are our territorial boundraries opening, but so too are the restrictions to consumers being lowered. Masks are mandatory in public property and shops which provides a reminder that SARS in any variant affords caution, but as each mutation occurs, although there is an increase in the rate of transmision, (morbidity), hospitalisation is reduced atbpeak and mortalility through treatment and mutation is reduced.
Of course, that is not to admit to complacency. There remains for those without vaccine protection real danger, but I just get the feeling that the worst is over and although the journey out is going to be turbulent, recovery is happenning
With the Covid rule changes on 16 August "nailed on", it seems that my pessimism for October was cautious and with new news, the picture changes.
So.... what we have seen thus far is that the vaccine rollout continues apace with more vaccines given each day than cases presenting. Hospitalisations are rising, but seem to be mainly restricted to the un-vaccinated. The UK vaccine rollout has been a success and although the virus will continue to mutate, it seems that with each new variant, although it is more viable and thus more transmissable, its deadly effects appear reduced. What we don't know, of course, are the long term effects.
Businesses that have high levels of debt may find that some re-structuring is necessary to cancel debt either by selling off non-core assets or placing parts of the business in liquidation. This will allow companies such as Ramsdens to acquire teams from businesses direct from the Receiver at better prices and thus accellerate any expansion. These might include, of course, retail premises from independent travel agents known for FX, but with small changes to interiors provide appropriate presence for core activity.
https://twitter.com/surprised_trade/status/1420353327121027072
Foreign travel opening earlier will be an added bonus to the bottom line, no co-incidence iii took 10% holding on 13.07.21
Shares in airlines and cruise operators are in the limelight again, though it seems that forward bookings are sluggish with consumers booking at the last minute. I remain confident that air travel will return with growing strength from October as a politicians wrestle with vaccine passports and entry requirements for visitors.
I wonder if we begin to see a shift in employment numbers as the furlough scheme unwinds. No idea of the sort of timescale involved to fill the vacancies in some sectors with the surplus from others. As always, the ones bearing the brunt tend to be unskilled or semi skilled and, sadder, young.
Well, well, well…. In a few minutes, residents in England will have restrictions imposed to mitigate the worst effects consequential from exposure to the SARS epidemic that presents as Covid 19
I am hopeful that the vast majority of people aged 40+ are going to be sensible and maintain mask wearing. What I am fearful of, is not a spike in cases, but of a lowering of guard from those in their late teens and early 20’s where 2 courses of vaccination has yet to be administered and at a take up rate that is lower than those in their 30’s and 40’s etc
The first signs of inflation are presenting with another rise in the T44 bond rate and July marks the first month when the furlough scheme begins to wind down. It gives me no pleasure in commenting that this is likely to help the underlying business for RFX, but foreign exchange transactione remain (probably) muted.
Those businesses that have weathered the pandemic fall into 2 distinct categories, feast or famine. Whether the feast continues is immaterial. For those in famine, it is a question of time until the towel is chucked in or 2nd wind comes to the fore.
Whopper of a treeshake today. Glad that I had better thing to do than watch my holdings plummet in value.
https://twitter.com/surprised_trade/status/1414867660010139649
another iii takes a 10% stake
https://www.lse.co.uk/rns/holdings-in-company-14olzv5wg6ndffm.html
https://twitter.com/surprised_trade/status/1412689219047276544
the opening up of foreign travel will add substantially to profits
'...there is huge untapped demand to holiday abroad when the UK government’s green list of countries is expanded, and Ramsdens is primed to gain market share and increase gross margin when that happens given there is far less competition following the demise of Thomas Cook (acquirer Hays Travel doesn’t offer currency exchange) and less well funded independents.'
While I never like it when facts get in the way of a decent story, my only caution with Downing having taken a hefty chunk of shares is that the IT was suspended in November last year just at the point when a recovery in their fortunes began.
Strikes me therefore that the managers (of that trust) are pretty binary - either right or wrong - their fund returned 38.7% between January and May.
Looks like Downing LLP would tend to agree - the business is largely unscathed by the pandemic
Jewelry sales save the day. Pawn broking and Forex should deliver in time
K
Bodes well for all of us.
Gl all.
Investors Chronicle atricle released tonight- extracts below....
Middlesbrough-based Ramsdens (RFX: 155p), a financial services group whose main activities encompass foreign-currency exchange, retail jewellery, pawnbroking and a precious metals buying and selling service, delivered a resilient first half trading performance in the face of two national lockdowns and restrictions on foreign travel.
Ramdens is well set for a strong profit recovery when the economy is finally free from restrictions and international travel restrictions are lifted. The investment case has not changed. House broker Liberum Capital expects a surge in pre-tax profit from £1m to £6.5m on 30 per cent higher revenue of £57.4m in the 2021/22 financial year, a realistic assumption given that a high proportion of incremental gross margin earned falls through to operating profit.
Moreover, with net cash of £15m (48p a share) on the balance sheet, the directors have ample firepower to make opportunistic earnings enhancing acquisitions ...Buy.
https://www.investorschronicle.co.uk/ideas/2021/06/22/upgrading-target-prices/
I have added a few more shares on the back of the news that was published following the decision that Downing Strategic Micro-Cap Investment Trust have bought a chunky stake. A niche company, but as disclosed in previous contributions, my timing was flawed. Don't you just love hindsight?
Downing Strategic Micro-Cap Investment Trust seeks to provide investors with long-term capital growth through a concentrated portfolio of UK listed companies, typically with a market capitalisation below £150 million. The company intends to take influential positions in businesses believed to be undervalued and that could benefit from strategic and operational initiatives to drive performance and unlock shareholder value.
https://twitter.com/surprised_trade/status/1407260722359418880
other's see a recovery too ....Downing Strategic Micro-Cap Investment Trust just took 14%
https://www.lse.co.uk/rns/RFX/holdings-in-company-muf1tau2eynz7wf.html
IC notes.....''although the Covid-19 disruption to business this year has sent the share price well below the 165p entry point in my market-beating 2019 Bargain Share portfolio, I fully expect to recoup the paper losses in due course. Bargain basement buy.''
Cash rich balance sheet to fund rebuilding of pawnbroking book
Strong gold price supports precious metals buying and selling
Set to capture market share in foreign currency exchange from weaker rivals
The share price rallied t to a high of 260p by early January last year, before giving back all those gains, and more, in the 2020 stock market crash.
The fundamental long-term drivers of the business have not changed even if the profitability of certain business division have been impacted by national lockdowns in the short-term. This is exactly the type of recovery play Ben Graham would be looking for to create a decent ‘margin of safety’ as well as offering prospects of a sharp rebound in profits when life returns to ‘normal’. That’s because Ramsdens’s market capitalisation of £42.2m is only 19 per cent higher than NAV of £35.6m even though the group has a debt free balance sheet and holds cash of £15.6m. Current assets of £38m are almost four times current liabilities of £9.8m, highlighting a strong liquid ratio and an ability to pay its bills. In fact, current assets are more than double total liabilities of £16.8m.
tealo1 - 20% gain for an individual holding is neither here nor there - Nvidia (actually it is now my largest holding) was bought in 2018 at $216 per share - is doing nicely. For that matter, so are my shares in Adyen, and Varta and a dozen or so others. All have doubled in a couple of years. My portfolio is structured for growth and I will be disappointed if, this year I do not have uplift of 17% - 18%. Sure, there are a few losers this year already - Abcam for instance and plenty of turgid ones such as AFC, SAGA, Utilico, Deutsche Bourse etc.
Ramsdens has plenty going for it - cash rich, the watches and jewellery side are providing not just turnover, but are keeping the company alive. Division for precious scrap metal and pawnbroking will do well in a down turn, (but surprisingly, we are not there yet), FX (does well when conditions allow for travel) but talk of expanding into the South East is bold and at a tangent to core competence. I don't like that from the perspective of Rent, Rates, Staff and competition.
We have news to expect the lowering of restrictions (in England) in late July so it might mean the start of FX again. Once the furlough scheme ends and employers weigh up the prospects to re-open, I would expect to see unemployment begin to rise. That won't really happen until schools return in September. That MIGHT mean the beginnings of the pawnbroking side picking up. But these little things do not mean that shareholders in Ramsdens are going to get rich all of a sudden.
It does take time and rather than adding to my holding in RFX (because I know the risk), the reward is insufficient (at this stage to press the buy button. So, for ME, these are not a buy but there is an insufficient case to sell. I like to average my holding UP. And I will do this when there is sustained evidence that momentum will continue.
And for that, I will use the basic historic information in graphical format (chart) with the 5 year one as a guide.
My decision to buy was flawed by my impatience - I underestimated the amount of money that Governments would chuck at businesses for a far longer duration than I expected. Things that I believe I got right include that RFX is a well managed company, is cash rich and has revenues from different streams.
Dividends are a bonus as far as I am concerned. While the value of my holding is slightly underwater, this is magnified when opportunity cost is taken into account.
I added another 20% to my holding a few days ago. My average is now the same as the current SP. I’m intending to hold for many years all being well, return of the divi etc and continued SP growth. Im sure we’ll be at around £2.50 this time next year if not sooner.
Absolutely, gold price due to increase to about $2500 owing to QE and therefore inflation. Plus opening of additional shops for added growth.
The problem is the market is becoming that irrational, you now think 20% is not an attractive gain...
Ramsdens offers plenty of long term potential to return and improve on existing normal trading earnings. The net cash position is healthy, leaving the actual business on sale for a good price which I see a 50% upside within 3 years on return to healthy profits.
RFX is a good company, backed by a good management team - and one which offers a hedge against inflation & has good exposure to gold prices. If you are prepared to be patient to return to normal trading, there is good money to be made here with a good margin of safety.
Outstanding recovery stock. 20% gain over the next 12months?