I Read The News Today Oh Boy! 14-Nov-2017

Tuesday, Nov 14 2017 by
15

Morning All!

A jam packed morning!

Adept Telecom ( Adept Telecom (LON:ADT) ) – 14-Nov-2017 – 305p – £72.3m – PER 11.3

Interim Results For The 6 Months To End September 2017 – Revenue up by 36% to £22.6m (£16.5m last time), adjusted PBT up by 29% to £3.9m (£3.0m last time), adjusted EPS up by 20% to 13.3p and the Interim Dividend is up by 13% to 4.25p per share. Recent acquisition integrations seem to be going well and well positioned to make more.

This looks great apart from a couple of things - Those continued acquisitions and also the Net Debt, now £20m (almost 30% of Mkt Cap).

SRT Marine Systems ( SRT Marine Systems (LON:SRT) ) – 14-Nov-2017 – 34.75p – £45.3m – PER 22.4

Interim Results For The 6 Months To End September 2017 – Broadly in-line. Revenue up 10% to £2.9m with an increased loss of £1.7m (£1.2m last time).

I can’t see how a PER of 22.4 is justified here, I’m certainly not interested at present.

Carclo ( Carclo (LON:CAR) ) – 14-Nov-2017 – 140.75p – £102.1m – PER 9.72

Half Year Results For The 6 Months To End September 2017 – A “solid first half performance” and the Board anticipates the full year to be in-line with its expectations – On track to grow substantially over the medium term. Well, Revenue is up nicely, about 10% - But PBT is down about 7% with EPS down almost 20%.

Just can’t find myself interested here.

Renold ( Renold (LON:RNO) ) – 14-Nov-2017 – 46.75p – £103.1m – PER 8.33

Interim results For The 6 Months To End September 2017 – Even from a high numbers level they’ve managed to provide a most confusing update here. My reading between the lines is Revenue is flat and PBT is down about 40% from £4.0m to £2.4m.

Not only do I not like the confusing update, I don’t like my interpretation of what I think is what they meant to day (should have said). There is also a huge pension deficit here around the £100m mark (100% of the Mkt Cap).

James Cropper ( James Cropper (LON:CRPR) ) – 14-Nov-2017 – 1490p – £138.9m – PER 22.3

Half Year Results To End September 2017 – This looks like an in-line update with the Board expecting to deliver full year expectations.

Even if they do deliver, I don’t see the attraction here on a PER of 22.3.

Speedy Hire ( Speedy Hire (LON:SDY) ) – 14-Nov-2017 – 54.25p – £285.4m – PER 14.5

Results For The 6 Months To End September 2017 – A “strong first half performance”. And it doesn’t look too bad for a company that needed some surgery - Revenue up by 6.9% to £183.2m (£171.4m last time), adjusted PBT up 58.8% to £10.8m (£6.8m last time), adjusted EPS of 1.66 p (1.04p last time), Net debt reduced to £63.1m from £71.4m, Operating Margin is up to 6.6% from 4.5% and ROCE has almost doubled (9.4%). With the Dividend up 51.5% to 0.50p per share and the board are “confident of delivering a result for the year above current expectations and that the Group has a strong future ahead of it”.

Made some money here well over a decade ago. Have they turned a corner here, perhaps! Will be considered an opening position here.

Trifast ( Trifast (LON:TRI) ) – 14-Nov-2017 – 248p – £289.9m – PER 18.4

Results For The 6 Months To End September 2017 – "Another six months of strong growth, with increased trading driving up our underlying PBT". Strong growth is Revenue up 4.8%, EPS up 8.1% and an Interim Dividend increase of 10%.

This “strong growth” would be tempt me into a position here, if the PER was about half of what it is at present.

A & J Mucklow ( A & J Mucklow P L C (LON:MKLW) ) – 14-Nov-2017 – 497.63p – £315m – PER 19.4

Trading Update For The Period 1 July 2017 To 13 November 2017 – Seems like a steady for now but not so optimistic update.

On a PER of 19.4 this doesn’t look like good value. As mentioned previously, could be one for those seeking income (a well covered 4.5% or so) without any great expectations of growth. I would be wary though not just of the outlook but the fact that there is about 30% of Mkt Cap as Net Debt too (£78.5m).

Wondering this morning if many of the people writing these updates think many of us investors are plain stupid.

Liking Speedy Hire again for the first time in years!


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AdEPT Telecom plc is engaged in providing managed services for information technology (IT), unified communications, connectivity and voice to over 100 Councils, NHS Trusts and other government bodies. The Company's segments are fixed line services (being calls and line rental services) and managed services (which are data connectivity, hardware services, IP telephony, support and maintenance services). It is engaged in the provision of voice and data communication services to both domestic and business customers. The Company offers technical and commercial options for onsite and cloud-based telephony. The Company serves approximately 20,000 commercial customers including worldwide and nationwide brand names. more »

LSE Price
290p
Change
 
Mkt Cap (£m)
68.7
P/E (fwd)
11.9
Yield (fwd)
2.9

SRT Marine Systems plc, formerly Software Radio Technology plc, is engaged in the marine technology business. The Company's principal activity includes development and supply of automatic identification system (AIS)-based maritime domain awareness technologies, and derivative product and system solutions for use in a range of maritime applications from safety and security to fishery management and environment protection. AIS is a mesh network radio communications system technology specifically designed for the marine domain, and it uses a combination of global positioning system (GPS) and high frequency radio to enable real time, simultaneous data communication between multiple, independent entities providing information, such as identity, GPS position, speed and other customized data. It offers a range of AIS products and maritime domain monitoring system solutions, which also fuse other maritime sensor technologies, such as radar, closed-circuit television and communications. more »

LSE Price
36.75p
Change
 
Mkt Cap (£m)
46.9
P/E (fwd)
21.9
Yield (fwd)
n/a

Carclo plc is engaged in the supply of fine tolerance, injection molded plastic components, mainly for medical products. The Company is also engaged in the design and supply of specialized injection molded light-emitting diode (LED)-based lighting systems to the automotive industry. The Company operates through four segments: Technical Plastics, LED Technologies, Aerospace and CIT Technology. The Technical Plastics segment supplies fine tolerance, injection molded plastic components, which are used in medical, optical and electronics products. The LED Technologies segment develops solutions in LED lighting. The Aerospace segment supplies systems to the manufacturing and aerospace industries. The CIT Technology segment manages its digital printing of conductive metals onto plastic substrates. The Company is a supplier of control cables in Europe. more »

LSE Price
123.25p
Change
-3.0%
Mkt Cap (£m)
90.3
P/E (fwd)
8.5
Yield (fwd)
n/a



  Is Adept Telecom fundamentally strong or weak? Find out More »


13 Posts on this Thread show/hide all

MrContrarian 14th Nov 1 of 13
4

My morning smallcap tweet:

Escher Group (LON:ESCH), Renold (LON:RNO), Speedy Hire (LON:SDY), Falanx (LON:FLX), Aukett Swanke (LON:AUK), TP (LON:TPG), SRT Marine Systems (LON:SRT), A & J Mucklow P L C (LON:MKLW), Ilika (LON:IKA)

Escher Group Holdings (ESCH) FY trading - warns rev only $18m, with licence revenues, which have a high margin, materially lower than expectations. - postponement of major contracts. Adj EBITDA* excluding exceptional items, is expected to be approximately US$2.7m. Note Adj EBITDA = super bullshit earnings.
Renold (RNO) H1 rev up 8%, EPS 0.8p (0.9p). Adj EPS 1.8p (2.3p). "Machine break-downs and increased raw material costs reduced Chain division adjusted2 operating margin to 8.0% (2016: 12.0%) Torque Transmission division demonstrated improved performance with underlying revenue up 6.1% and adjusted operating profit increased by 100%...the issues in Chain are being resolved, and we are seeing distinct signs of improvement in our end markets...We are confident of delivering improved performance in the second half."
Speedy Hire (SDY) H1 adj EPS up 60%. Exp FY above current expectations.
Falanx Group (FLX) CEO resignedfor personal reasons. Chairman will take over as Acting CEO with immediate effect. Trading remains strong.
Aukett Swanke Group (AUK) UAE design team has won a commission to design and deliver a new concept in retail shopping for a major Chinese client - The "Lesso" Mall. A 'new concept in retail shopping'? I somehow doubt that.
TP Group (TPG) wins £770k contract from overseas government to carry out classified development work in the field of atmosphere management systems. With F/C rev of £29m is that material?
SRT Marine Systems (SRT) H1 broadly in line with our expectations. Pretax -£3.3m (-£1.2m). Jam outlook: significant increase in sales activity driven by end customer demand; particularly for our VMS and MDM systems. Four contracts worth tot £60m 'appear to be in the final stages prior to contracting.' Get the toast on! May need reheat button. I'm long.
Mucklow A & J Group (MKLW) Four months trading: "Conditions in the Midlands property market are gradually becoming more favourable for pre-let development, due to the limited supply of stock."
Ilika (IKA) partnership to deploy Stereax solid state battery powered devices for the condition monitoring of wind turbines with Titan Wind Energy, the largest manufacturer of wind turbine products in China. Sensors embedded in blades. Also appoints Lou Ming as Chinese business development officer.

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MrContrarian 14th Nov 2 of 13
4

Adept Telecom (LON:ADT) - their model is consolidator. It's low margin and I don't like it either but they seem to have a very sound integration process and have done well.

"Wondering this morning if many of the people writing these updates think many of us investors are plain stupid."

If it's a PR person, they don't think about the investors at all, only about pleasing their client. 

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matylda 14th Nov 3 of 13
2

In reply to MrContrarian, post #2

Thank you Sir - For the clarification - In that case I agree, they seem to be doing a decent job at integration - I wouldn't imagine it being easy to achieve AND sustain long term.

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herbie47 14th Nov 4 of 13

Also Beximco Pharmaceuticals (LON:BXP) 1st quarter results today,EPS up about 25% which looks good. Ahead of forecast but shares  are which I don’t understand, I will continue to hold.

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Ramridge 14th Nov 5 of 13
1

Worth noting Computacenter (LON:CCC) 's trading update

" Computacenter's Board believes that the Group's trading result for the 2017 financial year will now be comfortably in excess of its previous expectations..."

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JohnEustace 14th Nov 6 of 13
1

Re Trifast (LON:TRI), if you're waiting for a PER of 9.2 with strong growth then may as well head to the beach and come back after the next crash - a thought which has occurred to me!

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dfs12 14th Nov 7 of 13

In reply to Ramridge, post #5

I saw this and am a little perplexed. They only updated the market 2 weeks ago and said results would be inline. Can't make it out.

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Damian Cannon 14th Nov 8 of 13
1

In reply to dfs12, post #7

I don't know if it's confusing? I just think that Computacenter (LON:CCC) have been cautious but are now benefiting from improved visibility: "Following a strong start to the fourth quarter and the visibility of a growing pipeline for the rest of 2017, Computacenter's Board believes that the Group's trading result for the 2017 financial year will now be comfortably in excess of its previous expectations, which were set out in the interim results announcement on 25th August 2017 and last confirmed in the trading update issued on 27th October 2017." Given that last time they mentioned buoyant customer activity I think that Computacenter (LON:CCC) are ticking all of the investment boxes at the moment.

Blog: Ambling Randomly
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matylda 14th Nov 9 of 13
1

In reply to JohnEustace, post #6

Ha! I was just commenting really that I would consider Revenue up 4.8%, EPS up 8.1% and an Interim Dividend increase of 10% - Strong growth for a company on a PER of 9.2, not one on a PER of 18.4.

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ISAallowance 14th Nov 10 of 13
1

In reply to matylda, post #9

I'd be prepared to pay 18.4 PER for 8.1% pa eps growth if I was convinced that this growth would be maintained for 5+ years. I used to look for peg around 1 per Slater, but I'm increasingly convinced that that is just too restrictive for companies that can keep growing year after year. I now prefer to use a peg of about 2 as a rough upper limit, after reading this article:

https://qualitysharesurfer.com/2017/08/11/valuation-metrics/

which discusses the Graham formula pe = 8.5 + 2g

Having said that, I don't hold £TRI

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simoan 14th Nov 11 of 13
2

In reply to Damian Cannon, post #8

 I think that Computacenter (LON:CCC) are ticking all of the investment boxes at the moment.

Really nice update, but I take one look at the operating margins and just lose interest. I confess I've listened too much to Terry Smith, and I don't want to be buying or holding companies with such wafer thin margins.

All the best, Si

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Howard Marx 14th Nov 12 of 13
2

In reply to matylda, post #9

What valuation method are you using Matylda?

A DCF for Trifast (LON:TRI) incorporating an 8.1% growth in FCF for 5 years followed by a terminal growth rate of just 4% p.a. would suggest todays p/e of 18.4x is fair value rather than expensive.
(assuming a discount rate of 9%)

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matylda 14th Nov 13 of 13
3

Sorry ISA Allowance and Howard Marx - I am just way too simplistic...

I just like to see growth greater than the PER (or at least close to it), preferably Revenue, Profit and EPS - And Dividend if there is one I consider a bonus.

I'm not much into formula's, DCF's, FCF's, discount rates et all - I'm just not as smart as many members here.

Simple person, simple approach - Occasionally I get the inkling to better educate myself with some of these terms but keeping it simple always wins.

For example, I see Trifast growing at say 10% here, I just don't consider that "strong growth" for a company on a PER of 18.4 - Seems to works for me (so far) and it's also really simple to work out if I am interested or not.

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