Member Info for andsoforth

...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?

There was a placing in May this year at 290p. Directors spent c£3m taking shares. That money has been deployed in a series of acquisitions, and more will follow. Restructuring has resulted in the interims announced two weeks ago showing a return to profit and an EPS of 2.8p. Not bad in such troubled times! Yes, there is a lot of debt here, but given the amount of MHE required, the gearing is not unreasonable. Full recovery may not occur until 2024, but it will have to come. The current PER of 7.7 seems to indicate a bargain. This does seem cheap, for those with patience.

...seems to be quality at a reasonable price.
PER = 19
Yield = c4.3%, covered x1.3
15% of market cap in cash.
Strong family holding
Board alined with shareholders
Niche business
Update due at end of month.
Ignore the published spread, it is actually c0.5%.

It IS illiquid, so not for the trader, but may appeal to income seekers.

The price here tends to fly about on quite low volume, so it may be one to trade. Personally I am holding and looking for 25% or so from here. The company has minimal debt, it is slowly diversifying, and should benefit from shifts in commodity prices. Seems to be a decent management team in place. Not too much of an insight here, sorry. Charts say we should shift up to 260s now.

More or less back at 2019 levels, with increased margins and efficiencies. Well managed, sir!

Looking at this optimistically we are treading water, but "management now anticipates the 2021 full year EBITDA outturn to be c.$10m lower than the 2020 result, given the slower-than-anticipated recovery within our core energy markets." Essentially the recovery is much slower than expected, and markets remain cautious. This is marginally worse than the situation reported by WG. on Tuesday. Further to he positive are the measures taken to diversify in fields and geographically, with investments in India and Singapore, and money put into software and additives. Overall a little disappointing, but management seem to be maintaining a grip, and clearly have a plan in place. Investors are rewarded with a dividend.