Daily Stock Market Report (Fri 20 June 2025) - CARR, REC, DORE, LORD, CAML, IDHC, CYK, ORCH
Good morning!
I'll be working on this report until about 10.00-10.30, when I'll need to start preparing for a chat with the management at Record (LON:REC). Please let me know if you have any questions you'd like me to ask them!
Alex has asked me to help share the new product release notes: dividend dates and news enhancements.
Spreadsheet accompanying this report: link
Wrapping it up there for today. I'll type up my Record notes next week. Have a great weekend!
Best regards
Graham
Companies Reporting
| Name (Mkt Cap) | RNS | Summary | Our view (Author) |
|---|---|---|---|
Berkeley group (LON:BKG) (£4.1bn) | PBT -5% (£529m). ROCE 16.5%. “Well-placed to achieve our FY26 pre-tax profit guidance of £450m.” | ||
Gulf Keystone Petroleum (LON:GKP) (£351m) | Production guidance unchanged (40-45k bopd). Capex & cost guidance unchanged. | ||
Central Asia Metals (LON:CAML) (£286m) | The prior offer was A$0.05/share. Observed a buyer at price above that. New offer: A$0.053/share. In a separate RNS, they announce that they've bought New World shares on the market at A$0.055. | AMBER/GREEN (Graham) [no section below] I have no particular view on this as it's outside my wheelhouse, so I will leave the AMBER/GREEN stance from Mark unchanged (see here). But I do find it interesting that they have been spurred into increasing their offer for New World Resources, after noticing that there was a large buyer of New World shares at a price higher than CAML had offered for the business. Those purchases, predicting that New World was worth more than A$0.05 per share, have turned into a self-fulfilling prophecy! CAML, anticipating some resistance to their initial offer, have now sweetened the deal. CAML have significant cash resources (US$67.6m as of Dec 2024) but their offer values New World at US$128m, so they will need to use their RCF to fund the deal. | |
Integrated Diagnostics Holdings (LON:IDHC) (£155m) | Buys a radiology and radiotherapy facility in East Cairo for EGP 400 million (£6m). | AMBER/RED (Graham) [no section below] The deal sounds great but I have to retain our AMBER/RED on this due to the difficulty of assessing the Egyptian economy and the numbers in the context of a 17% inflation rate. But I have no reason to doubt that IDHC will success in its plans to create "a top-tier provider in the burgeoning Egyptian radiology and radiotherapy market". The financials look very good (StockRank 89, including a QualityRank of 97). But it's hard to look past the fact that it's reporting in the Egyptian pound, a currency whose value does not seem very dependable. I'm still scarred since I ventured abroad with DPEU, whose reporting currency was the Turkish Lira! | |
| Downing Renewables & Infrastructure Trust (LON:DORE) (£141m) | Offer for DORE | 102.6016p per share offered (previous share price: 83p) by DORE’s largest shareholder. | PINK (Graham) [no section below] This has been listed since late 2020, just as the IPO boom was starting. It “delivers stable returns by investing in a diversified portfolio of hydropower, solar and other infrastructure assets”. With commitments and indications of support for the takeover already received from 22% of those shares eligible to vote for it, the proposal is off to a good start. Further proof that trusts have been undervalued on the LSE? |
Carr's (LON:CARR) (£137m) | Oversubscribed, so excess tenders get scaled back. 45% of shares to be bought back at 163p. In a research note published in May, Edison forecasted PBT of £4.4m in FY August 25, rising to £6m in FY26. Cavendish forecasted adj. PBT of £4.0m in FY25, rising to £5.1m in FY26. | AMBER (Graham) [no section below] After the tender offer, Carr’s will have its Agricultural feedstock division, c. £15m of cash, and 51 million shares left outstanding. The tender offer complicates EPS forecasts but in simple terms, the current market cap (£137m) minus the tender offer amount (£70m) leaves an implied value of £67m for the Agricultural division plus the remaining cash balance. Regardless of whether Cavendish or Edison turn out to be more accurate, the valuation here seems pretty fair, so I’m neutral. | |
Record (LON:REC) (£114m) | AUM -1%, revenue -8% (£41.6m), PAT -2% (£9.1m). Outlook: low single digit growth, flat EPS. | GREEN (Graham) Staying GREEN on this high-quality financial. It continues to offer investors a rock solid balance sheet and a very generous dividend (although it may be difficult to maintain it at this level). Growth is limited, but that has been the case for a long time. It continues to work on various growth initiatives. | |
Lords Trading (LON:LORD) (£72m) | On track to meet exps for FY25. Positioned well for any sustained improvement in the RMI market. Lords is “a specialist distributor of building, plumbing, heating and DIY goods”. Cavendish leave forecasts unchanged including adj. PBT of £6.7m in the current year, with EPS of 2.9p. | AMBER (Graham) [no section below] I can leave our neutral stance on this unchanged after this “in line” update (previous coverage by Mark here). One of the main worries for us is that there tend to be very heavy adjustments to the results. This is a low-margin distributor and I struggle to believe that it should trade at a much higher multiple than it’s already trading it, so I’m neutral. But if it gets a macro tailwind behind it, then investors should do well. | |
Cykel AI (LON:CYK) (£13m) | Recurring revenue +68% over past 4 weeks, driven by company’s autonomous recruitment agent. | RED (Graham) [no section below] No pound figures are provided in this RNS. Checking its most recent annual report, I see that it generated revenues of £817 over the 13-month period, or £63 per month. With 68% growth, maybe this has increased to £106 per month? It also has a “bitcoin treasury reserve strategy”, which I think is a red flag. | |
Orchard Funding (LON:ORCH) (£11m) | SP +19% | AMBER (Graham) [no section below] This is a Super Stock with a StockRank of 99, and has just announced that it is going to easily beat expectations. However, the Board want to delist from AIM. They just haven't quite got around to it! In the interim results (published in March), they said: "The board has not changed its view that the continued admission of Orchard's shares to trading on AIM may not be in the best long-term interests of the company or its shareholders. We do not have short-term plans to address this issue and will therefore, for current purposes, continue with the AIM admission." How strange! The co-founder and current CEO owns 57% of the company. At a P/E ratio of perhaps 4x, this stock looks perfect for nano-cap value investors who don't mind taking the risk of a sudden delisting. They can't say they weren't warned! |
Record (LON:REC)
Down 6% to 53.98p (£107m) - Final Results - Graham - GREEN
Chatting to management a little later - let’s see some of the highlights from these results (FY March 2025).
There were “isolated outflows” which sent AUM down 1% by year-end to $100.9 billion.
Revenue fell 8% to £41.6m due to lower performance fees.
PBT and PAT are both a little lower than last year.
However, EPS is higher than last year.
This is because PBT and PAT include all of the losses at German subsidiary Record Asset Management GmBH.
EPS, on the other hand, excludes most of those losses, due to the RAM management team having a large stake in the business.
Therefore, Record’s EPS increases slightly, from 4.84p to 5.03p.
Dividend: the final divi of 2.5p takes the overall dividend for the year to 4.65p, or 92% of EPS.
The outlook statement seems to tacitly acknowledge that paying 92% of EPS out in the form of dividends is a challenge:
We have started FY-26 with a well-positioned pipeline. Over the medium term, we expect the deployment of new funds in the Private Markets space in particular to drive revenue and EPS growth.
The outlook for the current year is highly dependent on the timing of closing the large and complex deals currently in the pipeline, but we are anticipating low single digit revenue growth and flat EPS year on year.
Recognising the importance of the dividend to investors, and the uncertainty of timing of new revenue growth, we remain committed to paying a healthy ordinary dividend while always balancing that with the aim of maintaining a strong balance sheet
Balance sheet: there is equity of £29m on the balance sheet, almost fully tangible and very liquid (current assets of £27m vs. current liabilities of £6m).
CEO statement:
"I am very proud of what we have accomplished in my first year as CEO of Record. We have added new capabilities in our Private Markets pillar to complement the core Risk Management and Absolute Return expertise which Record consistently delivers year after year. Our unwavering commitment to delivering a best-in-class, tailored client experience continues to be a key differentiator - one that not only strengthens client relationships but also attracts top-tier talent to our team."
On strategy, the Chairman says “it is now appropriate to view the Group as an alternative asset manager with a strong emphasis on risk management”.
The group is now structured in three divisions: Risk Management, Absolute Return, and Private Markets. Private Markets. Private Markets is seen as driving growth in the medium-term. It includes $1bn of AUM in an Emerging Markets Sustainable Finance Fund. There is also €1.1bn of commitments to Record's Infrastructure Equity Fund.
Graham’s view
I tend to be positive on Record (e.g. see my brief comment in April) but it’s important to acknowledge its limitations. It hasn’t shown much growth over the years, and while there are positive noises today re: the pipeline, growth is not something I’d bank on here.
Instead, this is a company with a fine, long-standing reputation among institutions for its ability to provide currency risk management services, with some more enterprising (and complementary) activities bolted onto it. The balance sheet is always rock solid, and the company has paid out as much as it possibly can to shareholders in the form of dividends. These dividends account for most of the return here, as the share price hasn’t gone anywhere:
I’m happy to stay GREEN on it and the StockRanks do agree with me, rating it as a Super Stock with a score of 94. But it remains to be seen whether the company's latest set of growth initiatives will bear fruit.
Disclaimer
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37 comments
Hi, can someone please let me know where I can find the link to the spreadsheet where you can search all stocks covered recently, thank you
If you go to the top of this report, there is a link about 10 lines down.
Hi
If you are interested in growth (with a lot of risk), innovation, space, geopolitical tailwinds, innovative trends. Then you might be interested to look at Eutelsat Communications SA (EPA:ETL) (note its on the Paris exchange).
Take a look at recent newsfeeds (see Stocko Discussion tab on the Stock Report page), and in particular the major shareholders - GB and French governments - in the top four holders. Over 84% held by these governments and other big holders.
I hold a starter position. I expect to cost pound/euro in/out with the ebbs and flows of this stock, but see it as a long term play on a macro trend in innovation, defence and national security.
Regards
Howard
Re offer forDowning Renewables & Infrastructure Trust (LON:DORE) why has there been no RNS from this Trust. If I only looked at my alerts from London Stock Exchange I would be none the wiser.
Is there something here I don't understand?
It showed up on my RNS Stockopedia feed - I suspect it could be one your filters that's removed it so worth checking those first as I've missed a couple of RNS due to that.
Could be your settings? I do get them on Downing Renewables & Infrastructure Trust (LON:DORE). Although on Next 15 (LON:NFG) l get nothing at all and l know have been results and director buys, so it could be a system issue?
Downing Renewables & Infrastructure Trust (LON:DORE)
You specifically mention the London Stock Exchange - well here it is:
https://www.londonstockexchang...
https://www.londonstockexchang...
Melrose Industries (LON:MRO) -Graham - A Q that has been asked before re a variety of shares - but isn't it time the lowly stocko rank of just 18 is reviewed for this share ?
By luck bought OrchardOrchard Funding (LON:ORCH) a few weeks ago as it was on 99.Still looks cheap?
I very rarely if ever buy shares valued at over £20.00. Am I wrong?
Lindt N 2 L Ord (LON:0QKT^A15) have done ok this year.. :o) (edit: changed to the swx version Chocoladefabriken Lindt & Spruengli AG (SWX:LISN) )
Whether an individual shares is £2, £20, or £200 makes no difference. It's the combination of shares in issue and shares price that matter. So I'd say you're wrong if you're doing it based on price of an individual share, rather than for another reason.
Yes, it's an arbitrary thing of no consequnce to the PI.
RHMD c €172 - I rest my case.
You could have bought Games Workshop (LON:GAW), Next (LON:NXT) Goodwin (LON:GDWN) and Diploma (LON:DPLM), they have not done too badly.
Yes, you are wrong, in my opinion.
Wrong - prices being over a certain fixed arbitrary value (£1, £20, £100 etc) as an investment blocker is just an emotional impediment.
I have seen a lot of money lost on penny shares. You can have 2 companies with the same prospects market etc but one has issued one twentieth of the shares of the other, the price of this companies shares should in theory be 20 times those of the other company. It is no reflection on the share as a investment relative to the other.
I agree, penny shares are far more risky, over £20 shares tend to be larger, well established companies, that have prospered over the years and not done any share splits. I'm not aware of any stocks doing IPOs at over £20.
BRKA $728,000,000, a lot lot more than twenty quid.
BRKA has been a hell of an investment for a very long time.
Many US stocks are over £20 a share, despite share splits. Only 12% of my US folio is under $30?
I think if all you have to invest is £20, then I agree you should avoid shares valued over £20. In any other scenario it’s arbitrary and emotional and I think has little bearing on the outcome of how the share does.
Hi Orval,
Berkshire Hathaway (NYQ:BRK.A) share price is $728,000 and not $728,000,000
Still, it's well over £20 !!!
Downing Renewables & Infrastructure Trust (LON:DORE) becomes the latest trust to receive a bid (102.6016 pence in cash). Looks a bit low to me.
Good quality trust so would have expected this to go closer to NAV. There's a lot of decent renewables on 25%-30% discounts, so likely to see some more bids in this area.
Isn't Downing the one with the Norwegian HEP cash machine? A much better asset.
yes mainly invested in hydro not wind and solar
Re questions for Record (LON:REC) (I hold), is AI a threat or an opportunity? No mention of AI in the announcement that I could see, unlike so many other company statements. Also important to try to get a better feel for the new products on which future financial progress depends: only a one off tax credit and the accounting effect of local management being given control of the German subsidiary allowed FY2025 earnings to cover the dividend and even then it relied on performance fees too. Thanks Graham.
I will be sure to touch on some of these topics, many thanks Sheriff!!
Hi Graham. Got a Record (LON:REC) question: "In moving into areas like infrastructure equity and Sharia-compliant trade finance, what’s Record’s unique edge beyond currency risk — and how are you positioning to compete with established multi-asset managers in those spaces?"
Many thanks
Graham - was there anything to add following your chat with Record (LON:REC) management?
Yes InvestmentHunter, unfortunately I fell ill the following week, before I had a chance to type up my notes. But I still have them! Just need a good moment to type them up. G
Very different tone to the commentary in the Berkeley group (LON:BKG) results this time around.
Last time it was "Planning is a nightmare and we are taking our toys home".
This time they are able to report lots of new planning consents and apparently the blob is being more helpful and constructive in letting them get on with it.
I view Berkeley group (LON:BKG) as being in a different league to other housebuilders, with a remarkable long-term track record of returning capital to shareholders.
Sadly they've done much of that via special dividends, so Stocko subscribers will never get to appreciate the true performance.
Monty Carlo,
Correct!!!!
I think the true performance of Berkeley has been one of continuous volatility, and on 7th May last year we sold out completely in the light of the housebuilding industry weakening in general.
I have an IRR of 8% on holding dating back to 2016.....which is not bad for a capital intensive business.
Maybe I'm just not greedy enough.
But yes, trying to build residential housing in the UK is not the most attractive industry and I don't blame anyone for passing on the sector entirely. In fact trying to build anything in the UK is miserable, and likely to stay that way for a while yet.
'Sadly they've done much of that via special dividends, so Stocko subscribers will never get to appreciate the true performance'
Some few years ago under the leadership of Tony Pidgley Berkeley group (LON:BKG) promised to return more per share to shareholders in dividends over the next two years than the current share price. They had built up a substantial land bank at knockdown prices when prices were depressed by the GFC. It was as close to a certain profit as I have ever seen in investing.
Indeed....I deliberately excluded that era when quoting my 8% and my returns on Berkeley group (LON:BKG) are higher, but there was a break in my holding period.
Wonderful opportunity as it was I would prefer not to revisit those years! I will never forget one of my younger team members turning to me, looking very pale and asking whether she should try withdraw her savings in Northern Rock....and also watching the HBOS share price going into complete freefall.
On days like that shares with solid asset backing have a quality all of their own.
Forget beating the index and all that nonsense. Asset allocation is the primary driver of your personal wealth, and having the confidence to stay invested in equities through a rough patch is an acquired skill that is just as important as stock selection.