I Read The News Today Oh Boy! 22-Nov-2018

Thursday, Nov 22 2018 by
10

Morning all!

CMC Markets ( CMC Markets (LON:CMCX) ) – 118.6p – £342.8m – PER 9.97

Results For The 6 Months To End September 2018 – Income down -21%, PBT down -76% and EPS down -69% on an increase in trades (14%) and a reduction in active clients of 4% - Even Revenue per active client is down -22%.

Still too much uncertainty here and the fall in Revenue per active client is not encouraging at all – I’m still Neutral.

Hornby ( Hornby (LON:HRN) ) – 32.5p – £40.7m – PER n/a

Results For The 6 Months To End September 2018 – Revenue down from £17m to £13.8m, Statutory Loss Before Tax of -£3.2m (-£5.7m last time), Net Debt is £1.8m (£4.7m last time). Frugality and bonuses are the name of the game here now “a one-off 5% bonus (to all employees) given for getting to break even and c.15% of operating profit shared between (all) employees thereafter.”

I still don’t feel any more comfort here - I remain Neutral.

Keller Group ( Keller (LON:KLR) ) – 622p – £448.2m – PER 6.26

Trading Update – H2 continues in-line with the Board’s expectations – Re-iterates in 2019 contribution from major projects will be lower than this year.

First coverage for me and I have to say I am not exactly inspired – I will go Neutral and keep an eye out for actual results and perhaps some revised forecasts.

Mothercare ( Mothercare (LON:MTC) ) – 17.56p – £60m – PER n/a

Results For The 28 Week Period To 6th October 2018 – Loos Before Tax of -£6.2m (-£2.6m last time), Net Debt due to an equity raise down from £44.1m to £21.5m. International showing signs of recovery, UK still slowing.

Remains on my Avoid list.

Redcentric ( Redcentric (LON:RCN) ) – 77.5p – £115.6m – PER 13.1

Results For The 6 Months To End September 2018 – Revenue down -7.6%, Loss of -£0.1m (break-even last time). A 0.4p Interim Dividend has been reinstated.

I am Neutral and cannot…

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CMC Markets plc is a holding company. The Company is a provider of online and mobile trading servicing both retail and institutional clients. The Company enables clients to trade over 10,000 financial instruments, including indices, commodities, foreign exchange (FX) and equities through its trading platform. It operates through three segments: UK and Ireland (UK & IE), Europe, and Australia, New Zealand and Singapore (APAC) and Canada. Clients can trade the markets via contracts for difference (CFDs), financial spread bets (UK and Ireland segment only) and binaries. With the Company's spread bet, a client bets a specific stake size per point movement of a product, rather than trading a specific number of shares or units. The Company offers four types of binaries: Ladder, One Touch, Up/Down and Range. It also offers Australian wholesale and retail clients the ability to buy and sell Australian Securities Exchange (ASX) and SSX (formerly APX) listed products and managed funds. more »

LSE Price
97.8p
Change
-1.7%
Mkt Cap (£m)
287.6
P/E (fwd)
12.1
Yield (fwd)
4.5

Hornby Plc is a holding company. The Company is engaged in developing, designing, sourcing and distribution of hobby and interactive products. The Company distributes its products through a network of specialists through its online activities and various retailers throughout the United Kingdom and overseas. The Company has operations in the United Kingdom, the United States, Spain, Italy and the rest of Europe. The Company offers its products under various brands, such as Hornby, Scalextric, Airfix, Humbrol and Corgi. Its subsidiary, Hornby Hobbies Limited, offers products under various categories, which include Train Sets, Locomotives, Train Packs, Tracks and Extras, Wagons and Coaches, and Spares and Accessories. Its subsidiaries include Hornby Espana S.A., which is engaged in the development, design, sourcing and distribution of models, and Hornby America Inc., Hornby Italia s.r.l, Hornby France S.A.S and Hornby Deutschland GmbH, which are distributors of models. more »

LSE Price
31.72p
Change
-3.3%
Mkt Cap (£m)
41.1
P/E (fwd)
n/a
Yield (fwd)
n/a

Keller Group plc is a geotechnical solutions specialist. The Company connects global resources and local knowledge, and tackles the engineering challenges in over 40 countries. Its segments include North America, EMEA and Asia-Pacific (APAC). The Company operates through over 50 offices throughout the United States and Canada. It offers micro-piling, ground anchors and grouting services, and a range of piling solutions. The EMEA division offers a range of geotechnical products and solutions. It operates across approximately 30 countries, notably in Germany, France, Poland, Austria and the United Kingdom in Europe, United Arab Emirates and Saudi Arabia in the Middle East, in South Africa and certain parts of sub-Saharan Africa, and in Brazil. The APAC division offers ground improvement and heavy foundation products and solutions. Austral and Waterway operate in Australia specializing in near shore marine piling and construction. more »

LSE Price
610p
Change
3.0%
Mkt Cap (£m)
426.6
P/E (fwd)
6.2
Yield (fwd)
6.6



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


6 Comments on this Article show/hide all

MrContrarian 22nd Nov '18 1 of 6
2

My morning smallcap tweet: Bad news from 5 smallcaps.

Fireangel Safety Technology (LON:FA.), Integumen (LON:SKIN), Juridica Investments (LON:JIL), PCI- PAL (LON:PCIP), Hornby (LON:HRN), Veltyco (LON:VLTY), Mothercare (LON:MTC), Ebiquity (LON:EBQ), Wynnstay (LON:WYN), Redcentric (LON:RCN)

FireAngel Safety Technology (FA.) FY trading. Another warning. Ongoing production mproblems has delayed supplies and added short-term costs. Also "core product sales within the Company's UK retail and German trade segments have only recently, during Q4 2018, recovered to acceptable levels." Brave face. Uninvestable.
Integumen (SKIN) Subscription and Placing to raise £355k at 0.44p, a 14% discount.
Juridica (JIL) proosed delisting to save money during fund wind-up. I hold.
PCI-PAL (PCIP) agrees to pay sacked CEO his contracted entitlements plus £100,100 in full and final settlement of all other claims.
Hornby (HRN) poor H1, current sales are behind budget. squeezing costs. H1 rev down 18%, U/L pretax -£3m (-£4.6m). "There is still a large amount of stock at retailers that was sold at aggressively discounted prices. Some of the large blocks of stock of "bread-and-butter" items that were sold represented more than a year's supply for our entire market." Brave face: "There are some incredible [really?] products in the pipeline that will finally get us back on the front foot and give us the ability to take back the market share that we have given away."
Veltyco Group (VLTY) continues to struggle with cash collection in the online financial trading marketing vertical, has reduced marketing activities in this vertical to zero. May write down receivables. Cash only €0.6m. "If the Company is unable to increase its overall cash position, its ability to provide the level of marketing spend to support the launch of its own regulated online financial trading brand...in December."
Mothercare (MTC) H1 adj pretax -£6.2m (-£2.6m). "UK like-for-like sales decline of 11.1%, reflecting wider market uncertainty and negative brand coverage in connection with the Group's refinancing." There's been no trading stmt for 4 months! Expects performance to remain volatile.
Ebiquity (EBQ) guides FY operating profit materially below current market expectations.
Wynnstay Group (WYN) guides FY profit head of market forecasts.
Redcentric (RCN) H1 rev down 8%. Reinstates div 0.4p. "Our contract win rates have been lower than expected and the quality of the new business pipeline has reduced. While our new sales director, Brendan Lynch, has made good initial progress in implementing the required changes, it is taking time to rebuild a high-quality sales function." Also "Health & Social Care Network contracts...not expected to deliver the anticipated revenues in the timeframe previously expected." What a load of waffle to say sales are slow.

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andrea34l 22nd Nov '18 2 of 6
2

The results from CMC Markets (LON:CMCX) don't look good at all, especially in light of the very recent "ahead of expectations" update from Plus500 (LON:PLUS) this week.

I have finally bought Wynnstay (LON:WYN) after today's trading update - thanks for mentioning, I'm way behind today. I have been watching for some time ever since they were added to the 2018 NAPS portfolio as I was just a bit cautious that the recovery was at an early stage after previous debacles and might be short-lived, but things seem to be firing on all cylinders. They also don't seem to be subject to such price fluctuations as the rest of the market, so they steadily go up, or down, rather than wild swings.

Oh, I also have a HUGE smile on my face after both of your updates on Veltyco (LON:VLTY) - in June I sold at a loss at 64p... and now they are at 5.75p mid price!!!! Just proves that stop losses do work!! As well as common sense...

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simoan 22nd Nov '18 3 of 6
1

I have finally bought Wynnstay (LON:WYN) after today's trading update - thanks for mentioning, I'm way behind today. I have been watching for some time ever since they were added to the 2018 NAPS portfolio as I was just a bit cautious that the recovery was at an early stage after previous debacles and might be short-lived, but things seem to be firing on all cylinders.

I think you need to be careful. I have a friend who works in the agriculture industry who predicted there would be shortages caused by the hot dry UK summer. So this boost to Wynnstay trading could just be a one-off? 

Personally, I just could never get interested in investing in a company with margins of 2-3%. It clearly has no pricing power and revenues go up and down with the weather. There are so many companies and sectors with better fundamentals to invest in, why bother?

All the best, Si

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matylda 22nd Nov '18 4 of 6

Thanks guys for the comment much appreciated - Wynnstay (LON:WYN) is tempting but I am being VERY selective at present.

Blog: Briefed Up
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RichardK 22nd Nov '18 5 of 6
1

Re Majestic Wine (LON:WINE) (Majestic). If, as you imply, Matylda, they are discounting to get sales up to £500 mn and maybe bonuses, then it could be a buying opportunity - for wine, not shares!

Richard

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matylda 22nd Nov '18 6 of 6

In reply to post #421099

I am tempted to agree that the wine may be better value than the shares - Although I believe they are hinting that the additional spend (profits) are being spent on customer acquisition (not sure if that's on-line advertising, or someone standing with poles and placards with an arrow on it).

Blog: Briefed Up
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