I Read The News Today Oh Boy! 7-Dec-2017

7th Dec '17 by matylda

7 comments 5004 reads

Morning All!

S &U ( S&U (LON:SUS) ) – 2420p – £290.2m – PER 10.4

Trading Update For The Period 1^st August To 6^th December 2017 – Demand for products remains robust.

There’s quite a lot to like here (except the £81.1m Net Debt, 25%+ of Mkt Cap), I will put it on my Watchlist for now.

Caretech Holdings ( Caretech Holdings (LON:CTH) ) – 426p – £322.6m – PER 12.0

Preliminary Results For The Year Ending September 2017 – Revenue up 11.4% to £166.0m (2016: £149.0m), underlying PBT up by 12.6% to £29.4m (2016: £26.1m), underlying EPS remained at 38.03p per share due to a share placement - Property portfolio valued at £329m.

Seems reasonably priced here but Net Debt remains high at £147.1m (40% of Mkt Cap). That aside it does have attractions.

MJ Gleeson ( MJ Gleeson (LON:GLE) ) – 755p – £407.2m – PER 13.6

AGM Statement – Expecting results for the full year to June 2018 to be broadly in line with results for the prior financial year - H1 results may fall below those of the prior year, in this event, H2 is likely to be significantly stronger than the first. Then it states “The Board, therefore, remains confident that the results for the full year to 30 June 2018 will be in line with expectations”.

I quite like this still but the update is a little strange to me. The first statement is that full year results should be the same as last year and a follow up statement confirms the full year will be in line with expectations. Even just looking at the EPS, it’s supposed to be 52.6 in 2018 versus 48.5 in 2017 – I am confused enough to remain on the side-line for now. Perhaps I’ve missed something here!

Clipper Logistics ( Clipper Logistics (LON:CLG) ) – 426.75p – £421.2m – PER 23.3

Interim Results For The 6 Months To End October 2017 – Headline “Continuing strong growth in line with expectations”. And, I quite like this, Revenue up 21.1% to £199.7m (2016: £164.9m), PBT up 15.6% to £7.9m (2016: £6.9m), EPS up 18.9%…

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MrContrarian

7th Dec '17

My morning smallcap tweet:

Brave Bison (LON:BBSN), Clear Leisure (LON:CLP), People's Operator (LON:TPOP), Inland Homes (LON:INL), HSS Hire (LON:HSS)

Brave Bison (BBSN) Exp FY rev £9.1m, ahead of expectations, and adj EBITDA -£0.9m. But move to higher-margin revenues is slower than originally anticipated, will take longer to achieve profitability.
Clear Leisure (CLP) long account of attempts to recover from various disastrous investments. Has prepared file two legal claims tot £2.5m. One re Italian subsidiary "regarding serious misrepresentations about the company’s accounts, which were used as the primary basis for the investment, and on the day-by-day management of the investment itself by the former owner." The second regards a formerly disposed UK based portfolio investment. Cash situation desperate.
The People's Operator (TPOP) plans placing of 2.8bn shares at 0.1p. That's an 81% discount and 95% to the SP before it announced it was seeking to raise new funds.. Also 1.4bn warrants at 0.2p. Trading is in line. Three years ago on IPO at 130p it had 77m shares. The boards said a key strength was a 'Robust financial model'.
Inland Homes (INL) will buy back up to another 1m shares.
HSS Hire Group (HSS) result of Strategic Review "the most detailed in the company's history, has provided us with deep insights on HSS's trading performance and enabled us to devise a clear and actionable set of priorities." Wait for it. They are to: 1. reduce debt. 2. repair the tool hire business. 3. strengthen the commercial proposition. Plans £10m - £14m of additional savings. Targets EBITDA margin: above 20%. Also will "improved profits in the heritage tool hire business". Is that steam hammers and blacksmith's anvils?

jonno

Well done Matylda and Mr Contrarian for your hard work, application and discipline in putting together your daily posts. I hold RM, Headlam and M J Gleeson. General pleased with all three, although surprisingly the update from Gleeson is perhaps the least inspiring.

Rusty2

The main problem with RM (LON:RM.) is the pension deficit. Otherwise I agree it does look good. I also agree about the markets, the last 3 months have been difficult.

andrea34

Re GLE I think you are focusing only on the statement relating to the sub-division Gleeson Strategic Land, where the outcome is seen as flat - the outlook for the Homebuilding division is more rosy... as per the following:

Demand at Gleeson Homes remains strong with the forward order book at the end of November up more than 30% on last year....The Board expects Gleeson Homes to record an increase in completions for the first half year to 31 December 2017 of more than 15% compared with the prior half year total of 451 units; and for the year to 30 June 2018 of approximately 20% compared with the prior year total of 1,013 units.

davids_h

RM (LON:RM.) does look interesting, but there is the issue of its DB pension scheme. In 2015 the deficit was £41mn, and there is another triennial revaluation in May next year. Currently they are expected to contribute £3.6mn to the scheme per annum until 2024, which is a a decent amount of cash, but I suppose that could change in May. The dividend yield is appetising and decently covered, but again the FCF doesn't seem to support it. Presumably the uncertainty over the pension is the reason for the company's low rating? Stockopedia, though, thinks it's a 'Super Stock'. Either way, £2 seems like quite a ceiling to further advances.

matylda

Re: RM (LON:RM.) - Yes, I noticed this in the last accounts "Pension deficit reduced to 22.2m(30 Nov 2016: 34.8m)" which worries me less.

Re: MJ Gleeson (LON:GLE) - Thanks, in my haste, my mistake!

RM (LON:RM.) the other thing noticed is the generous directors share options.

I Read The News Today Oh Boy! 7-Dec-2017

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Matylda

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