Member Info for RunThoseProfits

The brief trading update in Early June was just that, brief. I’m hoping for far more detail from the half year update. In particular I’d like to hear more on the pipeline of new projects and of developments to break into critical infrastructure work, such as data centres. The margin split between software and hardware divisions will be interesting - in an interview at the end of last year Laurence Hulse (Onward Opportunities) mentioned the idea of floating off the hardware business and focusing all attention on the higher margin software business. Interesting idea but no sign of management considering this to date. This is a business that should rerate but the market needs some game changing news to drive this. Let’s see what we get.

I don’t expect you’ll get it. The share price is rightly being hammered because the business surprised the market. In April they had a record order book. Now, 2 months later, revenues are expected to be 25% down. The downturn started in q2. Book to bill was one of the red flags in April and yet they didn’t call it out. Personally, I’ve lost faith in the management team as a result. I bought in when the shares were a good deal higher and, for now, will hang on in the hope of a slight recovery. But it’s currently hope rather than expectation. I’ll be very interested to hear Dowgate’s view on this as this was their (Oneard Opportunity’s) largest holding (as at end March).

I'm surprised not to see some positive movement in the sp today following the announcement of a US-Vietnam trade deal with better terms (20% tariffs) than were previously on the table. These are still owners but less damaging than might have been th case. The vietnamese economy has dealt well with the threat, with estimates remaining that it will grow substantially this year.

The BHP share price was at over 2900p not so very long ago. It will take a better geopolitical environment, greater growth in major economies and meaningful recovery in China for the sp to appreciate significantly as global demand for iron ore and copper increases.

The book to bill number was flagged as a concern by some PIs at the time of the last update in April. Perhaps it was an indicator of what we’ve learned this morning. I raised a question on it at the presentation but, as I recall, just got a response along the line that the order book was strong. Shouldn’t management have signalled this earlier?

That’s a fair point Me12345. I hadn’t considered that. It’ll be interesting to see the overall ownership model post tender offer and how the shares perform once the forecast increase in eps becomes more widely

Understood.

The focus of some on debt is flawed in my view. Look at the company’s fundamentals. It’s highly cash generative, has 75% gross margin, 25% operating margin. It has a current ratio of 2.1 and quick ratio of 1.9 (both perfectly healthy) and has more than doubled earnings per share in the past three years with this strong growth forecast to continue. I expect it will continue to make further acquisitions whilst being diligent about managing its debt within agreed limits. There’s much to admire about this business

I disagree with your analysis, Stargate. In that basis the share price would never recover. Anyone that has followed this business would see that it has consistently delivered on its objectives and there is no reason to expect this to change. All 8 analysts following the company have this as a buy or outperform and a consensus target of 817p. This will rerate quickly at some point and patience will be rewarded.

Broker Berenberg raises target price to 280p

Interesting TR1 notice issued today showing FMR from Boston increasing their holding by over 8% to just over 18%.

Significant volume traded today and a continued appreciation in the sp.

This has now lost more than half its value since its high of last year. Given the trading updates and continued acquisitions over this period, I’m mystified as this is a strong, capable business which is delivering on its targets. The shorts clearly identified something, but I will remain patient with this investment. It will turn and I suspect when it does it will accumulate quickly in value.

RBC sets price target at 340p, “Outperform”.

It shouldn’t be, Accountant, but some have said it has almost acted as a proxy for the oil price in the last 6-12 months. It’s more sentiment than anything else.

Some notably large buys on Fri.

That’s a couple

Of significant purchases noted after close of

Play.

Interested to hear from others who have invested in this fund. I invested in the future of defense version but have also taken a position in this European equivalent given the need for European nations to increase their defense spending. It’ll be interesting to monitor their respective performance.

Positive to see the sp slowly recover following the recent drop after the air crash in India and the conflict in Iran.

Tender offer was successful and oversubscribed. Those accepting the tender offer will be paid on or before 30th June. It'll be interesting to see how the retained business performs, especially when the first trading update is provided and the anticipated change in earnings per share materialises.

Ashtead Technology have intimated that they are assessing the option of moving to the main market - not the US. They have stated that this should give access to greater opportunities to raise capital / further investment. I can’t comment on what it may do for the sp. Being on the main market carries greater overhead costs associated with this but perhaps opens opportunities for funds focused on UK main market investments to consider taking a position.