I Read The News Today Oh Boy! 18-Jan-2018

Thursday, Jan 18 2018 by
28

Morning All!

A lot to get through…

Headlam ( Headlam (LON:HEAD) ) – 570p – £483.6m – PER 12.6

Trading Update For The 12 Months To End December 2017 – Margin enhancements and efficiencies offset the slightly lower than expected revenue growth – Underlying PBT to be comfortably in-line with consensus market expectations (£42.5m, up 6% on last year).

Still attractive enough, especially for that reasonably well covered Dividend of circa 4%+. There’s also a decent cash pile. Wouldn’t mind this yield with the Cash safety net there too. It’s going on my Watchlist, 530p, where that yield will be even more attractive.

Ten Entertainment ( Ten Entertainment (LON:TEG) ) – 262p – £170.3m – PER 13.8

Trading Update For The 12 Months To End December 2017 – In-line with the growth strategy (LFL Revenue up 3.6% (7% in the second half). Expects EBITDA to be at the top end of the range of current market consensus. Encouraged by the performance of the new innovative “Pins & Strings technology” currently being rolled out.

Seems I missed the boat here on this one. Will keep an eye on this from the side-lines for now. Actually decided to add it to my Watchlist, 210p.

Air Partner ( Air Partner (LON:AIR) ) – 151.5p – £79.1m – PER 17.5

Trading Statement – CORRECTION - PBT (not Revenue) to be at least £6.4m (£5.1m last year) which is ahead of market consensus of £5.9m. Group retains a strong net cash position.

A decent update, I hold and will continue to do so.

SafeCharge International ( SafeCharge International (LON:SCH) ) – 311.5p – £457.5m – PER 17.8

Trading Update For The 12 Months To End December 2017 – In-line with market expectations, Revenues in the range of US$111-112 million and Adjusted EBITDA in the range of US$33-34 million. “With robust current trading, a strong sales pipeline and new clients set to join the platform, the Directors look forward with confidence to the 2018 financial year”.

I currently hold a long position here and will continue to do so.

Microgen (

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Headlam Group Plc is a United Kingdom-based company, which is engaged in the marketing, supply and distribution of a range of floorcovering products. The Company's operations are focused on providing customers, principally independent floorcovering retailers and contractors, with a range of floorcovering products supported by a next day delivery service. The Company operates through 56 operating segments in the United Kingdom and five operating segments in Continental Europe. Each operating segment is a trading operation aligned to the sales, marketing, supply and distribution of floorcovering products. The Company's activities and facilities are located throughout the United Kingdom, France, Switzerland and the Netherlands. Its business in France operates from approximately two distribution centers and over 20 service centers, and the businesses in Switzerland and the Netherlands each operate from a single distribution center. more »

LSE Price
448.5p
Change
-0.8%
Mkt Cap (£m)
383.2
P/E (fwd)
11.6
Yield (fwd)
5.6

Ten Entertainment Group plc is a United Kingdom-based ten-pin bowling operating company, which is focused on the family entertainment market, with Sites that are typically located on mixed-use retail/leisure parks. In addition to the core ten-pin bowling offering, the Company has additional entertainment activities. The Company offers a selection of entertainment options including amusement machines, table-tennis, soft play, laser games and pool tables, restaurants and bars serve a range of food and drinks. The Company operates approximately 40 sites trading under the Tenpin brand. In addition Company also offers iServe, which allows customers to order food and drink direct to their lane. In addition to the core bowling offering, the Sites include amusement machines, tabletennis, soft play, laser games, pool tables and food and beverage services to provide a entertainment offering. more »

LSE Price
251p
Change
1.2%
Mkt Cap (£m)
161.2
P/E (fwd)
10.9
Yield (fwd)
5.3

Air Partner plc is a United Kingdom-based aviation services company. The Company provides worldwide solutions to industry, commerce, governments and private individuals. The Company has two divisions: Charter division comprising air charter broking and remarketing and the Consulting & Training division comprising the aviation safety consultancies, Baines Simmons, Clockwork Research and SafeSkys, as well as Air Partner's Emergency Planning Division. In addition for reporting purpose, the Company is structured into four divisions: Commercial Jets, Private Jets, Freight (Charter) and Consulting & Training (Baines Simmons, Clockwork Research, SafeSkys and Air Partner's Emergency Planning Division). more »

LSE Price
77.5p
Change
0.1%
Mkt Cap (£m)
40.9
P/E (fwd)
8.6
Yield (fwd)
7.5



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


15 Posts on this Thread show/hide all

MrContrarian 18th Jan '18 1 of 15
3

My morning smallcap tweet:

Franchise Brands (LON:FRAN), Air Partner (LON:AIR), Portmeirion (LON:PMP), Fairfx (LON:FFX), Countrywide (LON:CWD)

Franchise Brands (FRAN) guides FY beat despite a £316k provision re Carillion.
Air Partner (AIR) Guides FY pretax not less than £6.4m, ahead of market consensus of £5.9m.
Portmeirion Group (PMP) guides FY pretax slightly ahead of market expectations. Rev up 10%, organic LFL 5%.
FairFX Group (FFX) expects FY revenues and profits to be ahead of market expectations. T/O up 39%, organic 17%.
Countrywide (CWD) guides FY rev £672m cf F/C £696m. EBITDA £65m (£83.5m). Sales and Lettings disappointing Q4. Good op. C/F at ~£59m (£28m) and net debt around £193m (£248m). I'm short.

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jonno 18th Jan '18 2 of 15
1

Well done Matylda
Some effort to squeeze all that into one hour. I hold Headlam and Portmerion. Somewhat surprised by the muted response to the former this morning. All in all a good trading update. It is a well managed and wonderfully boring company dealing well with less than perfect trading conditions. I placed an order to add to Portmerion, although I suspect given the share price reaction it is unlikely to be filled.

The positive update from Ten Entertainment bodes well for Hollywood Bowl that I also hold, although I think the the share prices of both are starting to look a little stretched.

Keep up the good work.

Jonno

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Aislabie 18th Jan '18 3 of 15
2

Thanks for this Matylda
Cloudcall (LON:CALL) also gave a trading update today and really I despair. Simon Cleaver CEO is irrepressibly optimistic as usual and reports all sorts of positive sales movements but fails to mention when this company will become cash positive or indeed anything about profit other than "inline margins".
Cloudcall is now expecting to go over 8 years without making a profit, relying on the market to keep funding its dreams. In 2015 the price got walloped as the market demanded a huge discount to make another placing and it appeared that the CEO got the message, with cash break even getting addressed in each subsequent bulletin.
With a large cash call in November the group now has a bit of money and in this update breakeven is not mentioned, in fact, ominously, there is another of Cleaver's "we are investing in our core operations" - which means, I fear, that the CEO is once again on the loose and cash breakeven is again receding.
Time for me to get out

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matylda 18th Jan '18 4 of 15

Thanks guys, you're welcome thanks for the input. I do like Headlam (LON:HEAD) and Portmeirion (LON:PMP). Cloudcall (LON:CALL) for me, I typically don't invest in loss makers however I am sure others will appreciate your views.

Blog: Briefed Up
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robin66 18th Jan '18 5 of 15
1

Hi Matylda,
A very busy morning for you, many thanks.
Re Fairfx (LON:FFX) (which I hold) as you say turnover of £1.1bn is below stocko figure, but as Mr C says they also state that turnover and profit for FY17 will be ahead of market expectations! Very confusing.

Robin

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Soundbuy 18th Jan '18 6 of 15

Re Miton (LON:MGR)

Update 24th November 2017

'The Board remains optimistic about the prospects for the Group and profits for the full year are expected to exceed current market expectations.'

This morning

'Overall financial performance expected to be at least in line with management expectations.'


Market vs Management expectations.....'at least' in line, perhaps leaving room for a (small) beat??

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BlueFrew 18th Jan '18 7 of 15
1

Air Partner (LON:AIR) - I hold and will continue to do so. I like the way the management have added related businesses with more stable and predictable earnings to the more cyclical private jet business. Sensible acquisitions which have added value rather than destroyed it, while still paying out good dividends to shareholders.

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phoenixnight 18th Jan '18 8 of 15
4

Matylda

There was an announcement from Draper Esprit (LON:GROW) this morning of a substantial investment in Ledger. My heart sank when I saw the words “Blockchain” and “Crypto” in the title of the RNS. However Ledger are involved in the security surrounding bitcoin, and thus can be seen as a “picks and shovels” type company. Whatever happens in the long run with the blockchain, the requirement for security and confidence will be important. The shares are currently up 9% and I can see the attraction of this.

I took a small stake in Draper Esprit (LON:GROW) when I noticed that they had an investment in fintech company Transferwise, of which I have personal experience. I don’t know if any other subscribers have used this service for transferring foreign currency overseas, but I can’t recommend it highly enough. The savings compared to the traditional banks are significant, but have so far only provided services for bank to bank transfers. However they are about to launch a debit card for use overseas. This will significantly expand their market and bring them into the mainstream, and it is that potential that excites me - think how many debit card transactions are made whilst overseas.

As a general rule I try to find companies where I feel that the overall market for the company or their products is expanding, either through technology, legislation or changing social trends. So far it’s worked reasonably well through Burford Capital (LON:BUR), GB (LON:GBG) (security identification), Smart Metering Systems (LON:SMS) (energy smart meter rollout), IQE (LON:IQE) and others. I’m hoping for similar with Draper Esprit (LON:GROW).

Anyway, I just thought that I would bring it to your attention as it wasn’t covered above. Thanks to you and Mr Contrarian for your morning updates. They are required reading for me every morning, along with the SCVR.

Regards

Paul

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matylda 18th Jan '18 9 of 15

In reply to post #300523

Thanks for that and the kind words.

I don't typically do Collective Investments - I guess I just usually find them too complicated.

All the best with the investment though.

Blog: Briefed Up
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cig 18th Jan '18 10 of 15

In reply to post #300523

Hardware crypto wallets are a very good business to be in at the moment, but if the scene goes puff they'll go for $2 on ebay. They're also useless for legitimate uses of blockchains as financial institutions don't want or need bearer assets.

I've tried to find out the implied valuation of Ledger (aka how much of the company they got for their $24m) but it's apparently kept secret, so I presume it is insane.

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andrea34l 18th Jan '18 11 of 15
2

Re. Air Partner (LON:AIR) I am perhaps missing something, but struggling to get enthusiastic about the update. On the one hand I suppose it's great they are due to beat market expectations... but considering that the interim underlying pre-tax profit figure was 4.1m vs 3.0m (+34.4%) then this means that H2 pre-tax profit will only be at least 2.3m vs 2.1m... which is a much lower percentage rise in profit compared to H1, barely scraping into double digits.

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matylda 18th Jan '18 12 of 15
2

In reply to post #300603

Air Partner (LON:AIR)

Good spot, here's me with my simplistic as usual hat on...

Had a look at 2016/2015.

H1 - 3 vs 2.2
H2 - 2.1 vs 2.1

So 2017 is...

H1 - 4.1 vs 3 (2016)
H2 - 2.3 vs 2.1 (2016)

So I suppose the growth always comes in Q1 with Q2 flat or, as in this year, up 10%.

2015 = 4.3
2016 = 5.1 (18%+)
2017 = 6.4 (25%+)

On a PER of 17.5 I am reasonably comfortable but thanks for pointing that out, hadn't noticed the flatish H2 previously.

Blog: Briefed Up
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VegPatch 18th Jan '18 13 of 15
1

re SafeCharge SafeCharge International (LON:SCH)
Forecasts were nudged down at the H1 stage as they had reduced some of the more "interesting" revenue streams (aka porn or "dating"). Thus the FY trading is in line with the new forecasts.
I own as i think it has a strong niche. The main issue management face is that they need to develop new products like marketplace manager, a payments product for all the new marketplace services like Uber etc but that takes human resource and money. So that puts some pressure on profit forecasts. The $100m of cash on the B/S has been earmarked for M&A, but if you look carefully you cant really see that they have an M&A team.
For me I think it will get subsumed by a larger payments player in the next couple of years, as the prices being paid are crazy. In the meantime the valuation is ok, there is cash on the balance sheet, it is less cheap than it was but 75% of EBITDA is paid out as a dividend so i feel you get paid to wait.
I hold

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Bitofathickie 19th Jan '18 14 of 15

Hi Vegpatch, I agree with you on SafeCharge International (LON:SCH). and particularly like picking up a nice divi along the way.

However I notice the divis are in $ not £ so by the time I get them it seems fixed transactions fees have knocked a big hole in them (costs are not clear). Do you have this problem? Is there an easy way around it? 

I'm always trying to minimise frictional transaction costs so $ divis are really putting me off.

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Steves cups 19th Jan '18 15 of 15
1

In reply to post #300363

Robin
Been looking at Fairfx (LON:FFX). It's very confusing between turnover and revenue, so I wonder if they are being confused by others?
BTW where are you getting forecasts from for comparative purposes

Steve

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