Good morning! I'm heading into London for a meeting this lunchtime, so will get through as many announcements as there is time for this morning.


Produce Investments (LON:PIL)

Share price: 137.5p
No. shares: 26.6m
Market Cap: £36.6m

Profit warning - and it's a bad one too, with the key bit saying;

"...the Company now expects the Group's pre-tax profit for the full year to 27 June 2015 to be substantially below current market expectations."

The reasons given are both over-supply, due to a bumper crop, and lower consumption. Plus of course supermarkets squeezing prices;

 "In order to compete with the discounters the big four retailers have had to invest significantly in lower retail price points for key staples, potatoes included, and this has led to price pressure down the whole supply chain."

Hardly a surprise, is it? This is why I am trying my best to avoid holding shares in any company that supplies supermarkets - because they are accidents waiting to happen. It amuses me the way modern terminology for cutting prices, has become "investing in lower price points"!

Valuation - this stock kept cropping up on my value filters, but the extremely low forward PER of just over 4, is too low - something is usually wrong if a PER gets that low, so if there hasn't been one issued recently, then personally I would always wait for the next trading update before making a buying decision, because chances are it's going to be bad (that's why people in the know are selling the shares).

54c9f0b90b275PIL_chart.JPG

There's a fair bit of debt on the balance sheet here, which increases risk when trading is poor. If profitability can return to previous levels, then the shares could be a steal at this price. However, I'm not sure how likely that is, given the unrelenting pressure the company will be under from supermarkets buying its produce.

The divi yield will be good by now, but the question is, can the divis be maintained, given that trading is poor?

54c9f06b4719ePIL.JPG



Haynes Publishing (LON:HYNS)

Share price: 117p
No.…

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