Good morning!


This company has issued a trading update today. It makes generally positive noises, but doesn't say how the company is performing compared with market expectations - which is the key message that shareholders need, but have not been told today.

The Board is pleased to report that we have enjoyed another strong start to the financial year, driven by continued growth in the demand for our identity intelligence services both in the UK and globally. The strategic acquisition of DecTech, announced on 24 April 2014, has brought greater scale, technical capability and geographical reach and is already showing tangible benefits to the Group.  We have been very pleased by the success of the integration of the business to date and by the pipeline of new business.

The Board is confident that the Group will continue to grow throughout the year and deliver increased value to both our clients and shareholders. Our priorities for the year are the continued internationalisation of our product portfolio, making sure that we continue to invest wisely and improving our margins. The Board is pleased with the success achieved in the year to date and is confident that GBGroup will deliver another year of positive progress.

There's too much waffle in that. I would have preferred a much more concise statement, just saying whether or not they are in line with market expectations.

Looking at valuation, it's been expensive for a while. Stockopedia shows the forward PER being 23.4, and the forward dividend yield as being 1.39%. So that's fully, or over-priced as far as I can see. A key question here is how much of the growth is organic? Nobody minds paying a high PER (anything over 20 is high, in my view) if a business is roaring ahead through organic growth. Is that the case here?

The company has cash of £9.7m, although it is not stated whether that is net cash or not. They should have emphasised that the company has no debt, if that is the case.

So overall, not a very useful statement, and the valuation looks too high to make me want to do any more digging.

Zotefoams (LON:ZTF)

Interim results for the six months to 30 Jun 2014 have been published today.

As explained in the narrative, being a UK-based exporter, the company has been hit quite hard by the…

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