I Read The News Today – 11-Aug-2017

Friday, Aug 11 2017 by
34

So, here we go with Day 3, thanks as always for the continued contribution and support!

Not a great deal to report on actually (TTG probably being of most interest)…

Rotola (ROL)Half Year Report To May 2017 – A reasonable update with Revenue up 4.5% and profits up about 18% (EPS up about 9%), Debt, same as last year - Things don’t look too bad here, at first –Nice profit (PER around 10), ROCE 9%, Dividend of 3.83% (easily covered 2x) – But why is a company with a PBT of about £3m running a £25m (and rising) debt and paying a Dividend of almost 4% - I may be naïve in my investment approach but this doesn’t make sense to me at all. My high level view here is, forget the Dividend, more so, show me that you can pay down that debt – Then use the cash to invest in the business (ROCE is a decent 9%) and/or then consider paying a Dividend.

TT Electronics (TTG)Results For The Half Year Ending June 2017 – Looks OK here, Revenues (mostly organic) up 13%, PBT up 28%, EPS doubled and ROCE at 10%. Doesn’t look too bad on Stockopedia either, Stock Rank 86. Up 40% so far YTD it looks like this update may see it moving even higher – First time I have come across this one but this nice update probably deserves a closer look – Of course I prefer, especially in these times, to see cash on the books – Net Debt here is 15% of current Mkt Cap but that looks OK if this growth can be sustained.

Volution (FAN)Trading Update 12 Months To End July 2017 – Headlines that Revenue (£185m) is up 20% (15% CC) compared to the 12 months previous and 2 Acquisitions completed. Why no mention at all of profit guidance here – Argggghhh! We have to wait until 10th October to find out. On a current PER of 13, this confirmed revenue increase may give this some tailwind, I personally prefer to see the actuals. Have profits perhaps been affected by the acquisitions? Strange no mention of profit or dividend position at all – Or am I being too pedantic here!

I also…

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Rotala Plc operates commercial and subsidized bus routes for businesses, local authorities, the public and private individuals. The Company is engaged in the provision of bus services. The Company offers contracted, commercial and charter services. Its contracted operations service two types of customers, including individual organizations and local authorities. The Company offers commercial services in the West Midlands, the South West and the North West. The Company also provides a transport management service to a range of customers. Typically this covers business or service disruption, and event management. The Company operates approximately 600 vehicles. The Company's registered bus services carry over 29,000,000 passengers every year. In addition, it operates a range of corporate transport contracts and private bus networks. The Company's operations are across areas in the United Kingdom, including West Midlands, Worcestershire, South West, North West and London. more »

LSE Price
61p
Change
1.7%
Mkt Cap (£m)
29.3
P/E (fwd)
7.4
Yield (fwd)
4.7

TT Electronics plc is a provider of engineered electronics applications for performance-critical applications. The Company works with customers in the industrial, medical, aerospace and defense, and transportation sectors. The Company’s designed and manufactured products include sensors, power management devices and connectivity solutions. more »

LSE Price
229p
Change
-0.9%
Mkt Cap (£m)
374.4
P/E (fwd)
11.9
Yield (fwd)
3.2

Volution Group plc is a United Kingdom-based company, which is a supplier of ventilation products to the residential and commercial construction markets in the United Kingdom and northern Europe. The Company is principally engaged in designing, manufacturing and distribution of unitary and systems ventilation products and equipment. It is also engaged in the designing, manufacturing and distribution of a range of motors and components for use in air movement applications and gas boilers. It operates in two business segments: Ventilation Group and Original Equipment Manufacturer (OEM (Torin-Sifan). The Ventilation Group segment consists of 15 brands, focused primarily on the United Kingdom, the Nordic, Central European and Australasian ventilation markets. The Torin-Sifan segment is a supplier of motors, motorized impellers, fans and blowers for the European heating, ventilation and air conditioning (HVAC) industry. The Company offers Revive, which is a bathroom and kitchen fan. more »

LSE Price
168.5p
Change
0.3%
Mkt Cap (£m)
334
P/E (fwd)
9.9
Yield (fwd)
3.0



  Is LON:ROL fundamentally strong or weak? Find out More »


23 Posts on this Thread show/hide all

crazycoops 11th Aug '17 4 of 23
2

Thanks for the new feature this week matylda, I've enjoyed it.

Blog: Share Knowledge
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Julianh 11th Aug '17 5 of 23

In reply to post #207149

10,000 holes in Blackburn Lancashire
When men with bad hairdos have big problems at home tactic number 1 in the despot's survival plan is to find an enemy abroad. The people of North Korea haven't got enough food - see the pictures of one fat man and lots of skinny men. The reality TV star hasn't met any of his campaign promises and soon people might start to notice. A war or something close to it will solidify domestic support and justify additional domestic controls (a state of emergency?).
Then we really will have more than 10,000 holes in Blackburn Lancashire.
Now seems a good time to trim the portfolio, reduce holdings and hold more cash just in case.

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JohnEustace 11th Aug '17 6 of 23

In reply to post #207149

I think the dude in Washington is trying to divert attention from his imminent legal encounter with the Special Prosecutor.
It is all a worry though. There is a mighty power struggle underway. This is how wars get started and innocent people suffer.

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Ramridge 11th Aug '17 7 of 23
1

In reply to post #207184

Hi Julian - I am not totally up with English sayings, but what does "10,000 holes in Blackburn Lancashire" mean in this context?

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DWit199 11th Aug '17 8 of 23
3

In reply to post #207204

if you believe The Beatles, it was only 4,000 in 1967! That's inflation for you...

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Beginner 11th Aug '17 9 of 23
2

In reply to post #207204

It is from a Beatles song. 'I read the news today, oh boy, 10,000 holes in Blackburn Lancashire'.

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matylda 11th Aug '17 10 of 23
4

Ramridge - The title I chose for the report is based on...

https://www.youtube.com/watch?v=usNsCeOV4GM

:)

Blog: Briefed Up
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Beginner 11th Aug '17 11 of 23
2

Thanks Matylda
For info, the debt at Rotala (LON:ROL) is used to fund the fleet. The company can and will never be debt free, so paying a divi is a good idea. (Nice company, well run).

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Howard Adams 11th Aug '17 12 of 23
3

Hi

Does anyone have an insight into why Morgan Sindall (LON:MGNS) dropped so much this morning cica 8%+, but seems to be coming back a bit circa 4%+ at time of typing?

I am aware that most of its shares are held by institutions, then insiders. But after the recent healthy interims (08/08) I am a bit surprised at this movement even within the context of the market movements over the recent days.

(I hold).

Regards
Howard

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herbie47 11th Aug '17 13 of 23
2

In reply to post #207269

It's construction and cyclical, quite a few have been hit, such as Northern Bear (LON:NTBR) and North Midland Construction (LON:NMD), the margins are very low, any downturn will hits profits. I guess investors are seeking safer havens, Unilever (LON:ULVR) and Reckitt Benckiser (LON:RB.) are up today.

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Howard Adams 11th Aug '17 14 of 23

In reply to post #207339

Hi Herbie

Yes, I see my Northern Bear (LON:NTBR) holding is also down. I think your point about the margins and cyclicals makes sense. Once this volatility pans out I'll see of top ups might be appropriate.

Regards
Howard

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aflash 11th Aug '17 15 of 23
3

In reply to post #207219

matylda,

Speaking for 1500 readers this is a very useful addition. To collate the info before 8 am is remarkable.

As for the choice of title, the song still has some very topical lines:

'the English Army had just won the war' ( would have helped in North Korea)

'I'd love to turn you on' (did not succeed in the Isle of Man - CFO of Manx must we wishing they had)

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Soundbuy 11th Aug '17 16 of 23

Re falls, add Polypipe (LON:PLP) to the construction 'related' stocks.

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Ramridge 11th Aug '17 17 of 23

In reply to post #207219

Hi matylda - apologies for a late reply. I have just finished watching the clip and it's fabulous.

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Julianh 11th Aug '17 18 of 23
1

In reply to post #207204

Hi Ramridige.
I guess you are showing me my age.
The first two lines of one of the Beatles songs from the Sergeant Pepper album were
"I read the news today, oh boy
10,000 holes in Blackburn Lancashire"
And I thought this might be appropriate as
1. this blog has the title, "I read the news today" (maybe a nice reference to the Beatles song)
2. Trump is threatening to bomb North Korea out of existence.
A silly comment really, but sometimes when the world goes crazy all we have left is humour. And of course taking some money off the table
All the best to you and to all on Stockopedia

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vik2001 11th Aug '17 19 of 23

Northern Bear is one I be keeping a eye on to possible add as a position to get some quick gains once the dust has settled in the markets

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smatthews1 11th Aug '17 20 of 23
2

In reply to post #207234

I have often wondered that as well why some companies have a sizable chunk of debt yet also hold a decent amount in cash. I guess with Rotala (LON:ROL). It makes sense as its capital intensive business.

However I have noticed Character (LON:CCT). Are in the same position with cash as well as debt. Could someone enlighten me with this one, is it beneficial for tax purposes to have some debt on the balance sheet considering the rates are favourable?

Thanks
Sean.

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Beginner 13th Aug '17 21 of 23
3

In reply to post #207569

At the moment money is cheap, so some debt makes sense. In the case of Character (LON:CCT) I think some of their pot may consist of fees paid up front by clients, so the total is a little deceiving. Paul Scott is very hot on all this, and worth a read alongside matylda.

On that track, thanks to matylda for a very original and enlightening project. I will call in every day. Thank you.

(For readers here who are immune to sarcasm, @MrContrarian is worth a squint each morning).

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matylda 14th Aug '17 22 of 23
1

In reply to post #207918

Thanks for that - CCT is becoming more interesting for me (ticks lots of my boxes) at these levels, I've got an alert at 430p where I think it will be great value - Plenty of cash, nice profits, great ROCE, a well covered 4% Dividend and a decent moat - What's not to like!

Note - There's a great update here.

Perhaps my alert is set too low!

Blog: Briefed Up
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Beginner 14th Aug '17 23 of 23
1

In reply to post #207953

A decent price for Character (LON:CCT) seems to be about 455. I am staying out as there seems something odd about the management.But if you are happy, even at 470 it does not seem expensive. Good luck.

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