I Read The News Today Oh Boy! 20-Oct-2017

Friday, Oct 20 2017 by

Morning All!

Record (REC)

47.5p - £92.3m

Q2 Trading Update – This update seems to indicate things seem to be quite flat here - Up almost 100% in the past 12 months it’s a strong share price performance for a company that’s not exactly growing or even forecast to grow very much. On a PER of 13.5 even although the market and Stockopedia (StockRank 96) seem to like it – It’s in the “too difficult for me” pile.

Henry Boot (BOOT)

307.5p - £406.5m

Trading Update – Confirmation that trading since 25 August 2017 has been “very strong”. The company expects “performance for the year ending 31 December 2017 will be materially ahead of the Board's existing expectations”. Although the SP is up 50% YTD, the current PER of 11.9 suggests there’s still value here.

Marlowe (MRL)

362.5p - £124.7m

Trading Update For The 6 Months To End September 2017 – An in-line update which includes this statement “Net cash at 30 September is expected to be in the region of £3.1m and the Group remains well positioned to continue its acquisition-led growth strategy”. Up almost 20% this week, hope the insiders like this! I can’t see the big attraction but it’s on my list to look into a little more.

DX Group (DX.)

10.63p - £21.3m

Preliminary Results For The 12 Months To End June 2017 – Revenue flat and Adjusted PBT of 0 (+£92.1m last time). I didn’t bother reading the rest as it was just too complicated for me. I noticed also board changes announced today. After it’s fall from grace 6 months or so ago, I just don’t know if this is a good opportunity or not – Another one for the “too difficult for me” pile this morning.


137p - £939.7m

Statement Of Prior Year Taxes – Ouch! - "The Group recently engaged the services of an international tax firm to assist with a routine US tax filing for the year ended 2016.  Unexpectedly, this exercise has identified taxes due in the US relating to the profits of an overseas subsidiary for the years ending 2013, 2014, 2015 and 2016, which follow the acquisition of the epitaxy business of Kopin in January 2013.  This firm has estimated the tax due as approx. £4.2m, and is in the process of calculating the actual amount, which may take up to 4 weeks"

Larger than my usual £500m limit but just thought I would include as I know it’s a popular stock that was sub £500m 6 months or so ago - Is this what the shorters knew (were relying on)? This statement is slightly reassuring “the Board remains confident the Group is on track to deliver full year expectations, including that of net debt”. And of course, IQE will be pursuing compensation (how often does this work out for the good - Anyone?) - Here's the statement "IQE is clearly extremely disappointed with the previous professional advice received and will be pursuing full recompense as a matter of priority with the previous advisors".

Quite liking BOOT, think MRL is worth a further look and wondering what will happen at IQE here today!


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Record plc (Record) is a United Kingdom-based company, which is engaged in the provision of currency management services. The Company's suite of products is divided in two categories: Currency Hedging and Currency for Return products. It also offers solutions to individual client requirements. Its Currency Hedging mandates are primarily risk reducing in nature. Its suite of Hedging products includes Passive Hedging and Dynamic Hedging. Its Currency for Return mandates are return seeking in nature. The range includes five Currency for Return strategies being Active Forward Rate Bias (FRB), FRB Index, Emerging Market, Momentum and Value, and these strategies can be offered in either a segregated or pooled fund structure. The Company's clients are institutions, including pension funds, charities, foundations, endowments, and family offices, as well as other fund managers and corporate clients. It operates in the United Kingdom, North America and Continental Europe, including Switzerland. more »

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Henry Boot PLC is a land development, property investment and development, and construction company. The Company sources and acquires land; promotes planning consents; acquires, develops, manages or sells investment properties and service constructors with plant; runs its Private Finance Initiative (PFI) project, and refurbishes and constructs buildings. Its segments include Property Investment and Development, which includes property investment and development and trading activities; Land Development, which includes land management, development and trading activities, and Construction, which includes its PFI company, plant hire and regeneration activities. Its subsidiaries include Hallam Land Management Limited, Henry Boot Developments Limited, Stonebridge Projects Limited, Henry Boot Construction Limited, Banner Plant Limited and Road Link (A69) Limited. more »

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Marlowe plc is a United Kingdom-based investment company. The Company focuses to acquire and develop businesses in the outsourced business service sector with a focus on those that provide critical asset maintenance services in the United Kingdom. The Company focuses on fire protection, security systems and water treatment services. more »

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

7 Posts on this Thread show/hide all

MrContrarian 20th Oct '17 1 of 7

My morning smallcap tweet:

IQE (LON:IQE), Thalassa Holdings (LON:THAL), Elektron Technology (LON:EKT), Eservglobal (LON:ESG), DX (Group) (LON:DX.)

IQE (IQE) Big tax screw up on US subsidiary. Has paid the estimated £4.2m + £0.4m interest for the years ending 2013, 2014, 2015 and 2016. It is believed that no similar tax liability arises in 2017. IQE "will be pursuing full recompense as a matter of priority with the previous advisors." Surely the tax would have been payable if they'd had correct advice, so only the interest can be claimed? Trading: Q3 strong with "ongoing strong VCSEL ramp in support of a highly significant mass market consumer application". So they hint at the iPhone demand for the first time, so they could have some good news to offset the tax ballsup.
Thalassa Holdings (THAL) resumes buy-back.
Elektron Technology (EKT) sells subsidiary, Sheen Instruments for £1.2m. "The disposal will be dilutive of earnings initially but the Board expects to improve the performance of the remaining businesses." So it's dilutive full stop.
eServGlobal (ESG) £24m fundraise at 9p, a 10% discount. Includes £3.4m offered to retail holders. "Will be used in part to fund an expected capital raise by the HomeSend JV to fund its short-term cash requirements and provide further capital for future cash calls."
DX Group (DX.) FY nil profit. Exceptional (non-recurring) items of £80.7m, mainly goodwill. Also property dilapidation provisions - why is that a 'one off'? £24m funding from convertibles. New board. Trading: "As might be expected, trading in the new financial year has been affected by the challenges in the business." But " Firm foundations are in place for the Group's turnaround". Super.

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iwright7 20th Oct '17 2 of 7

Octagonal (LON:OCT) reported this morning - good operational gearing and outlook. Have doubled my position. Ian

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Graham Ford 20th Oct '17 3 of 7

In reply to post #231053

Regarding IQE (LON:IQE)........"Surely the tax would have been payable if they'd had correct advice, so only the interest can be claimed?"............Will that be the case? As I read it they took tax advice as part of an acquisition, the tax bill being from that acquisition, and the advice was incorrect. In other words there was a liability they were acquiring that paid specialist advisors said wasn't there and if they had known about it the price or the terms of the acquisition would have been negotiated a corresponding amount lower. So, it is not the case that their costs would have been this much higher regardless of the advice.

As a holder of this stock it is very annoying that there is this one off bill that they may never recover, but also reassuring that they took proper advice, are implementing a thorough review, and are able to guide that trading is on track as previously guided.

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peterg 20th Oct '17 4 of 7

As a holder of this stock it is very annoying that there is this one off bill that they may never recover, but also reassuring that they took proper advice

Though perhaps less reassuring that the advice sought appears to have been from someone you shouldn't employ to run your bath?

I never find it reassuring when companies say they will seek compensation, particularly in the US, there's normally a good chance of paying out good money after bad there, and leaving no one but the lawyers happy.

I'm surprised at how little the SP has been impacted this morning.


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Carcosa 20th Oct '17 5 of 7

IQE (LON:IQE) I can imagine this can be rather complex.

The advisors may counter-claim or simply own up. Then there would have to be an assessment of damages and then IQE will have to pay tax in part or in full on the settlement issue. Without better knowledge of the issues this subject is open to a great deal of speculation. However, in the grand scheme of things from here going forward it is, in my view, irrelevant for investors to overly concern themselves with it.

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Grindertrader 20th Oct '17 6 of 7


I have been reading your Oh Boy! 's over the past couple of weeks and I must say they are a great example on how to take quick, effective and simple notes on the days news announcement. I say simple because they are a very easy, clear, quick read; key financials are highlighted and simple valuations are considered. They are effective because they are not long enough that one can become easily bored and in a just a few seconds one can determine if the stock is worth investigating further. Your one liners at the end clarify your position quite well.

Going back to simplicity I give you much credit in that you state if the statements are too complicated or difficult to read you just move on. That is very worthwhile and useful advise for pretty much everyone.   I wrote an post last year on simplicity and how simple selected easy to understand rules based criteria is all that is required to make money in the stock market. You don't need to be an accountant, analysist, worked in the city etc.

I hope you don't mind saying all this.... I like your style!
best wishes

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matylda 20th Oct '17 7 of 7

In reply to post #231128

Well Ian,

Thank you so much for your kind words and your feedback, very much appreciated I assure you.

I do like to keep things simple and I am a strong believer that news is one of main drivers of stocks. Hence the reason I like to get in, do a quick assessment each morning (of the news) and make a decision (not always immediate of course). I used to find myself getting lazy some days though or even go through a number of days and would read the news late or not at all - And, my note taking was sloppy.

Although it takes much more time these days (even though it is concise as you state), documenting the morning report has given me great discipline - And I now have a reference point for all my notes. I have also gained a great deal from feedback received from fellow Stockopedia writers and members like yourself - Which I would otherwise have not. And, I am still able to digest and react to the mornings news events - Happy days!

Once again, much appreciated - Do please post the link to the post you wrote (I couldn't find it on a quick scan), at least for me and maybe others who maybe interested.


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