Good morning!
I'm still in Manchester, having stayed in a hotel overnight, after an excellent visit to the HQ of Boohoo.Com (LON:BOO) yesterday afternoon, and dinner with 4 of their buyers & their Operations Director. It fully lived up to my expectations - this is my favourite stock for the next few years (and one I hold personally, obviously).
When time permits, possibly this weekend, I'll post a separate article all about the company, and my visit. So just grabbing a spot to write an abbreviated morning report, having just asked the hotel to let me have a late checkout.
Norcros (LON:NXR)
Share price: 193.5p (up 7.8% today)
No. shares: 61.0m
Market cap: £118.0m
(at the time of writing I hold a long position in this share)
Interim results to 30 Sep 2015 - as a holder of this stock, I'm really pleased with these figures. The highlights make impressive reading, although as with all companies, the highlights section is very much putting the best foot forwards;
The narrative says that all parts of the business have improved performance in H1 this year. Acquisitions have helped boost the numbers, and seem to have been good acquisitions at reasonable prices.
The downside with any group that grows through acquisitions, is that the balance sheet gradually becomes increasingly top-heavy with intangible assets. That's the case here, but it's not at a problem level, in my eyes. Also net debt appears still to be at sensible levels.
Note the pension deficit is quite large here, requiring ongoing cash over-payments of about £2.2m p.a., so the valuation should be adjusted down to take that into account (although it looks as if the market has gone completely overboard in adjusting for this, as the forward PER now looks anomalously low).
Outlook - this is really encouraging, in that the company today says;
With our strong brands, leading market positions and continued self-help initiatives focused on market share gain the Group is well positioned to make further progress. Given the strong first half performance and momentum within our businesses, the Board now expects the Group to achieve underlying operating profit marginally ahead of market expectations for the year to 31 March 2016.
I don't recall this company getting ahead of market expectations in the last few years, so this seems a positive development. It has…
