Good morning! Paul & Jack here.
Agenda -
Paul's Section:
Fulham Shore (LON:FUL) - a decent, in line trading update for Apr & May. Acceleration of expansion into new sites, in prime locations, on attractive rents - so this is a good quality restaurant roll-out. Long-term, I think this share is likely to do well. Shorter term though, the valuation isn't a bargain. Since listing, the share price has basically gone sideways over 8 years.
Marks Electrical (LON:MRK) - as I expected, profit margins are falling from unrealistically high levels. Hence profit is flat, despite a 44% rise in revenues, for FY 3/2022 results. This seems a shrewdly managed business, lean on overheads, which is what's needed in a low margin, highly competitive sector. Too expensive for what it is.
Intercede (LON:IGP) (I hold) - a profit warning in April reset expectations downwards, so no surprises in today's results. Growth has stalled this year, but it's still profitable and has a sound balance sheet, with cash. We need to see growth resume, which could happen if contracts that were not signed by year end are signed in the new year. I've cooled a bit on this share, due to no growth. However, that's been reflected in a much lower share price already.
Jack's section:
Nexus Infrastructure (LON:NEXS) - a solid update, with a small hiccup in the energy transition business, but the company is confident of recovering gross margin in H2. Nexus is clearly working in some high growth areas and compares favourably to some more speculative alternatives, but the valuation is not particularly cheap and I wonder if near term pressures and investments might lead to a more attractive entry point some time in the future.
City Pub (LON:CPC) - an encouraging recovery in trading with good like-for-like progress, new site openings, and the prospect of the first uninterrupted summer’s trading in two years. Valuation has always been a concern for me though and I still struggle to see the upside, particularly after accounting for the recent increase in share count.
Explanatory notes -
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