Hi Mark
You are right (gave you a thumb up!) The market has found a lot more here than I did. Quidco I am unsure about: it does not seem to make a profit. With a PER around 14 it is not cheap, but it is not overpriced either. I will keep my wary eye on here. Thanks for your guidance.
Third quarter update shows some improvement, but the commentary more or less concludes that energy switching is dead. That will knock a fifth off revenues. Travel related matters are slow to recover, and insurance "markets softened". There is little here to suggest a turnaround within the next year. It is firmly on the back burner now.
Sabre reported today, and noted motor insurance is taking longer to recover than hoped. I realise this is a minor part of the DLG business, but it should be noted. This does, however, seem undervalued to me.
Client numbers up 27%
Revenue up 33%
FX turnover up 67%
Six month results to be announced Mon 8 Nov
BUT, no £££s given, and these increases are from a very low virus-impacted base.
Debt down c25%, and " the outlook for the Group for 2021 remains in line with management's previous expectations". Slow and steady here.
...this Wednesday, 13 Oct.
The third quarter update is due next week. Volatility should aid profitability here. A sell off is going on at the mo, so perhaps another institutional investor selling out or down, but Lindsell Train own nearly 20% so it could simply be them trimming.
The figures still make this a decent company, making occasional acquisitions, and paying a decent dividend. A good take for income investors?
Ex-div (always falls more than divi)
Market fall (FTSE 250 down 1.4%)
AND company specific poor interims (7 Sep)
This will probably not bottom until near 140, the recent rights issue price.
...as a buy.
PER is 15, so it is not desperately cheap, and it has been hit by a triple blow: fuel switching, travel and travel insurance all in the downturn. The price is sitting at more or less a six year low. Operating cashflow for full year 2020 was unsurprisingly down 26%, and for the six months to June this year it fell a further 16%, so the worst is definitely not over yet. EPS has fallen c60% in eighteen months.
BUT they have cash in the bank, and the yield of 5% seems sustainable even at these reduced levels of business. Rumours have also circulated about a possible takeover. I remain unsure how this adds up. Perhaps it is better to wait for the third quarter update next month.
Investec produce positive report today. Suggests "buy" with target of 108.
It is a low margin business, and the company is in recovery. BIG profits will NEVER be had here. Best to shop elsewhere for that. But this still seems undervalued to me.
Results are acceptable. The turnaround continues, but remember this is a leviathan (market cap £590m).
Underlying profit £3m.
LFL sales up a third.
Gross margin steady at c25%.
Steady as she goes, seems the message. The return of the dividend is also a marker of a steadied ship. Yesterday's down market meant the rise here was restricted, but the magical pound mark (of which I was sceptical) is now in reach.
Group revenue up 2.3% to £313.3m.
· Adjusted Basic EPS (pence per share) 9.1p (2020: 7.9p).
· Strong cash generation driving down net bank debt down from £26.5m to £13.1m
Key section:
" Momentum from H1 has continued into H2 with important client retentions and new wins.
Full year profit before tax and earnings expected to be substantially ahead of consensus.
Strong financial governance has enabled Board decision (post period end), to settle put options in cash rather than shares. Eliminates risk of continued substantial share dilution and represents a key turning point for the Group."
Onwards and upwards, when the market allows!!
...on Tuesday 21 Sep.
... on Tuesday 21 Sep.
I agree. Like most investments, this is really a bet on the competency of management; but management have already wagered about £3m on themselves, so hopefully my 7/6d will be well looked after too. @rebelhq likes it, so that is a sort of recommendation!
... on Monday 20 Sep.
Sorry to say I have departed the fold here, as I needed the cash. But I will be back when we are NEDless.
Total borrowings 2020 = £561m
Ditto 2019 = £482.4m
End 2020 net borrowing = £355.9 (with available cash and unused borrowing £141m)
Ditto 2019 = £216.6m
Ditto 2018 = £199.6m
So debt is rising, but the cash does seem to be being put to good use. What do you reckon?