Good morning from Paul & Graham!


Paul's Section:

Forterra (LON:FORT) - an in line with expectations update for FY 12/2022. There are some interesting dynamics here, which suggest FORT could be set up well for any forthcoming downturn in housebuilding. The finances look good too, with an almost ungeared balance sheet. I think this is starting to look interesting, after the big recent fall in share price.

Van Elle Holdings (LON:VANL) - a solid trading update today for its H1 to end Oct 2022. I like the strong, largely ungeared balance sheet here. Outlook for the rest of FY 4/2023 sounds encouraging, but I'm worried about the outlook beyond that, given macro negatives. Will larger building projects be quite so plentiful, now that interest rates are higher, and the economy going into recession? I suspect not. For that reason, risk:reward doesn't seem attractive enough to tempt me into this share right now.

Osirium Technologies (LON:OSI) [quick comment] - a tiny, speculative nanocap. We discussed it here on 1 Nov 2022, concluding that whilst it looked an interesting speculation, it clearly had a desperate need to raise fresh funding. Today it announces a small placing, raising £1.36m net of fees. Heavy dilution, and a 50% discount for the fresh money, coming in at 2.0p per share. Cost-savings being implemented. CEO moving to become part-time Chairman, and Sales Director becoming new CEO. The product looks intriguing, but super-speculative share. A bit better now it's raised some fresh cash though. [no section below] 

Graham's Section:

AO World (LON:AO.) (345m) - H1 sales are down 17% at this online appliance retailer. However, it still manages to increase market share since the overall market has declined at an even faster pace. More importantly, the company has cut costs and is working on many more ways of cutting costs in the months ahead. This encompasses headcount reduction, products being pulled, and unprofitable sales channels being shut down. Even the operations in Germany have been closed in the name of improving the company’s bottom line. I’m impressed by the vigour with which it’s pursuing a reasonable EBITDA margin and so I’d no longer want to short this stock or give it the bargepole treatment: it’s now acting like a proper company, being run on behalf of its customers and its shareholders. I guess that’s what nearly…

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