Pre 8 a.m. comments

Good morning! I'm struggling a bit to find relevant news, as due to the time of year, we're getting into the reporting season for large caps with 31 Dec year ends. Smaller caps tend to follow in March.

Animalcare (LON:ANCR) issues pretty decent looking interims to 31 Dec 2012 (so a 30 Jun year end). Their market cap is £29m at 139p per share.

Turnover is up 13% to £6.1m (rather low though, given the valuation), but margins are high, underlying operating profit of £1.5m (up 20%). Basic EPS is up 23% to 5.8p. Note how most companies are reporting a higher percentage increase in EPS than in pre-tax profits, because of the reduction in Corporation Tax. This should be noted, and adjusted for by investors, as it could lead to you over-paying for growth rates which are being flattered by reducing tax charges. So in this case, EPS has grown 23%, but the real underlying growth rate stripping out tax is actually 20%.

The interim dividend has been held at 1.5p, and net cash has risen 69% to £3m. So it all looks pretty good, and they confirm expectations for the full year. That is for 10.6p EPS, so at 139p the shares look priced about right on a PER of 13. So I can't get excited about this one.


Supplier of educational products, RM (LON:RM.) had looked a basket case in the past, but their results for year ended 30 Nov 2012 issued this morning look potentially interesting. Adjusted operating profit of £13.6m, and has net cash of £37.8m. It generated a staggering £33.5m of cashflow from operations. Bear in mind the market cap is only £66m at 70p per share, and this could be quite exciting.

On digging a bit further, most of the cash effectively belongs to customers, as there is a £26m deferred income creditor (to reflect cash paid up-front by customers). Also there is a big pension deficit. The 3p full year dividend is maintained, giving a nice yield of 4.3%.

Therefore RM (LON:RM.) is the one share this morning I would be focussing on to decide whether or not it's a buy, but it looks promising to me on an initial glance at the figures.

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