Good morning! It's Paul & Jack here with the SCVR for Monday.

Timing - I'll be finished by noon today. Today's report is now finished.

Reminder - it's Mello Monday this evening. I've (Paul) been roped into doing the BASH panel session, so see you later! More details of tonight's agenda & running order can be found here.

Agenda -

Paul's section:

  • Resumption of divis at £SNSW (I hold)
  • New share options for management at Sosandar (LON:SOS) (I hold)
  • Pointless name change announced for Amino Technologies (LON:AMO)
  • Sysgroup (LON:SYS) - quick skim of the results for FY 03/2021. Too small & illiquid, but results look quite decent. Consolidator in a fragmented sector (managed IT services)
  • Ilika (LON:IKA) - in line (i.e. poor) results confirmed in a trading update. Valuation still looks nuts to me, even after recent falls

Jack's section:

I've released Jack to be re-deployed for other duties today!


Paul’s Section

It’s very light for news today, so here are some brief comments on other things of interest.

Smiths News (LON:SNWS)

(I hold) - the UK’s largest newspaper/magazine distributor, with a rapid, overnight distribution network. Still a reliable cash generator, despite structural decline of its products. Announces a resumption of dividends. An interim divi of 0.5p, payable on 30 July 2021 (shares will go ex-divi 1 July). It doesn’t sound much, but that ‘s a 1.2% payout, and the final divi should be larger. Stockopedia is showing 1.6p divis forecast for this year FY 08/2021, a yield of 3.9%, covered a remarkable 5.75 times.

The stated plan here is to reduce debt to 1x EBITDA (which should happen quickly, due to two exceptional receipts due later this year - a deferred payment from the disposal of Tuffnells, and a rebate from the over-funded pension scheme). Once that has been achieved, then the company has told investors that it will focus on paying out cashflow as divis, and even special divis if cash piles up beyond what is needed.

On a forward PER of just 4.2, this means with a bit of patience, investors should see a nice re-rating here, and be in line for potentially very generous divis in future years.

There obviously is a question mark over what happens to the business longer-term though.

Logically it…

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