Good morning from Paul & Graham! Today's report is now finished.
I typed up last week's podcast summary, here it is.
Agenda
Paul's Section:
On Beach group (LON:OTB) - I take a favourable view of this share, as a well-financed, recovering travel business, with good flexibility from a low fixed cost base. Shares seem good value. Very vague outlook comments, and who knows how it's likely to be affected by the consumer slowdown? Overall though, for patient investors, I think this deserves a thumbs up.
Focusrite (LON:TUNE) - results for FY 8/2022 look pretty good - it's held on to most of the pandemic boom growth. Balance sheet is sound, outlook comments seem reasonable. There are a couple of points to note - heavy capitalisation of developments costs, and profit includes a one-off forex boost which should really be adjusted out. Overall, I see this as a quality business, with good pricing power. Shares look priced about right. Thumbs up overall.
Vertu Motors (LON:VTU) [quick comment] - a very large acquisition (Helston Garages) is announced, at a cost of £117m (VTU’s mkt cap is £169m), so shareholders need to scrutinise this deal carefully, as it’s so material. Interestingly, VTU is leveraging some of its large portfolio of freeholds, by taking out a 20-year commercial mortgage of £74.8m via BMW financial services. Zeus says this deal will increase forecast EPS for FY 2/2024 by 19%, then 25% the following year, as synergies kick in. Sounds exciting. VTU shares remain remarkably cheap in my view, and remember that forecasts already factor in a normalisation of car supply & residual values. (no section below)
In Style group (LON:ITS) [quick comment] - poor H1 results, loss-making. Over-stocked, like many retailers, with inventories having doubled, despite lower revenues. Still solvent. CEO throws in the towel, so the founder returns to the top job. Strategic review implies that being listed is a waste of time & money effectively (which it is, as there’s no liquidity, due to the way it was floated in large chunks to institutions, as with so many small caps). Has put itself up for sale, but no interested parties as yet. My view - it’s been a dead loss since day 1, so I’ll be glad to see this hopefully de-list. (no section below)
Purplebricks (LON:PURP) [quick comment] - H1…
