Good afternoon!

Today I've covered::



P.S. It's Paul here - Graham has passed me the baton, and I have added some extra comments on the poor interim results from Telit Communications (LON:TCM) , plus additional comments on Graham's sections below.

Filta Group (LON:FLTA)

  • Share price: 134p (+7%)
  • No. of shares: 27 million
  • Market cap: £36 million

Trading Update

This is a US & UK franchisor of services for restaurants and other food establishments. The main service is FiltaFry (see here) which recycles cooking oil and cleans industrial fryers. There are a bunch of other related services too, some of which are operated directly by the company itself in the UK, rather than by franchisees.

2016 results were hurt by AIM admission costs but otherwise it would have been profitable.

Obviously that makes it a new listing: it has only been listed since November 2016.

I've studied it before and come away with a positive impression: strong growth rates combined with the capital-light franchise model make for a happy combination, in my book.

This trading update (for the six months to June) continues the high growth story:

The Group has experienced revenue growth of some 38% over the same period last year with each of our primary operating segments experiencing double digit growth. We have seen strong performance in both the US and in the UK, with US growth being driven by increasing numbers of franchisees, increased royalties from our existing franchisees and the UK growth being due, principally, to a very strong performance from our owned businesses.

The shares are up today even though the company confirms that H1 growth is merely in line with expectations.

Perhaps the gains are due to the company re-iterating its view that growth is expected "for the foreseeable future", as it takes advantage of cross-selling opportunities to existing customers with more valuable services.

That is a really strong point in the company's favour: once you start selling a restaurant or public canteen services to do with their fryer, it's potentially quite…

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