Week No 3 of The Voyager RNS Log
Note: straight lifts from each RNS are in italics and my scribbling in normal text.
Monday 24/07/2017: as expected a quiet RNS day for the portfolio but I did follow up on last week’s consideration of BOY and purchased another top up.
Tuesday 25/07/2017: no RNS’s from stocks within my portfolio or universe of interest.
Wednesday 26/07/2017 ITV: Interim Results: Firstly quite a boring read and possibly penned by Coronation Street’s Ken Barlow but those who have become accustomed to my investment philosophy will know by now that I rather like boring companies. Anyway, a reasonable set of results and in line with management expectations. It was pleasing and reassuring that there were no nasty surprises and that alone should reassure the markets and brokers who got into the habit of downgrading ITV forecasts.
The numbers themselves do not hit you in the eye and say this is a buy but they are from my viewing encouraging as things as now new worries emerge and to my view this gives a superb base for the new CEO Carolyn McCall to build on; an excellent time for a dynamic leader to take up the position of CEO in a few months time.
The outlook statement reassures that the business is on track to meet the current year's forecasts:
No change in full year guidance
• Confident that ITV Studios will deliver good organic revenue growth with adjusted EBITA broadly in line with last year, impacted by ongoing investment in drama and the timing of programme deliveries
• ITV Family NAR forecast to be down around 4% in Q3 and we expect to again outperform the TV ad market in 2017
• Online, Pay & Interactive will deliver good growth driven by a strong performance in Online and Pay
• Will deliver £25m overhead savings and a £25m reduction in the programme budget as previously announced
My View: Given the future landing of Dame Carolyn McCall as CEO, I think that is a very impressive appointment, I feel very optimistic about ITV’s future and continue to hold what I consider to be a good value business paying a decent dividend.
Thursday 27/07/2017: Keyword Studios: KWS: Half Year Trading Update:
“The Group has performed strongly during the first half, with preliminary unaudited revenues for the period up by 50% to €63.7m (H1 2016: €42.4m) and a 60% increase in adjusted PBT* to €9.6m (H1 2016: €6.0m)”.
“All the Group's service lines showed good organic growth, as measured on a like-for-like basis, with the exception of Audio which had a particularly tough comparative due to the exceptional performance of Synthesis in H1 2016, as previously reported. The underlying like-for-like** revenue growth was 17%, or 28% when excluding Synthesis in both periods”. Andrew Day, Chief Executive of Keywords, commented: "We are delighted with our progress so far this year. This has enabled us to deliver a first half performance ahead of our expectations, underpinning our confidence in the Group at least meeting market consensus for the year as whole”.
The TU reads very well for my favourite Meccano company but I tell you what, it does worry me just a touch how the management will continue to successfully juggle and integrate the bolt on businesses that seem to be constantly acquired. However, for now, as in the game of musical chairs, whilst the music plays and momentum is there, it does look very good.
I bought my first of a few fairly significant batches back in the summer of 2016: I must admit that at the time I felt, as with DTG, that I had missed the boat (or aeroplane in Dart's case) as KWS had appreciated by over 50%. Since that first purchase, I have added further batches with the last one being in early January this year at about 530p. This reinforces my belief that while market conditions are favourable and the RNS flow is positive then maybe it's not too late to take a position and carefully ride the momentum This has certainly been my experience in bull markets but as ever we all need to listen to that music and make sure there is a chair to sit on when the time comes.
My View: One I will continue to hold but keep an eye on as simply by virtue of its growth, in a fairly short space of time it has now become a significant holding in the portfolio.
Thursday 27/07/2017: Norcros: NXR Trading Update
The TU reads: ”The Group's overall trading for the first quarter was in line with the Board's expectations”.
“Group revenue for the 13 week period was 8.2% higher on a constant currency basis compared to the same period last year and 16.8% higher in Sterling terms reflecting a stronger South African Rand”.
“UK revenue was 10.9% higher than last year reflecting both share gains and higher prices with growth across all channels, particularly within the trade and export sectors. We continued to experience growth in our South African business with revenue 3.5% higher on a constant currency basis and higher by 29.7% in Sterling terms”.
I have held this company for a number of years now and to be truthful it's quite a reasonably sized holding that at the same time as delivering a reasonable return, has frustrated me no end at times. In the early days, the frustration was often down to the exceptionally dour wording by the accountants in the TU/Results. At the time I had the distinct impression that they were the sort of people who could look out of the window on a glorious sunny day and say "it's going to rain at some time"; don’t you just love accountants! However, they have improved their PR act, appear to be managing the pension deficit well and are growing the business. I should balance my “reserved accountant” comment by adding at least we don’t have an Arthur Daley type at the helm!
A Quick look at the pension issue as shown in slide 10 of the year ending 31/03/2017 results presentation:
Now whilst I am not a pensions expert, I really strongly question if there is anything to worry about with the REAL “closed to new entrants as from April 2013” pension scheme. My reasoning being that firstly the scheme in pension talk, is super mature with 68% of pensioners over the age of 77(78+ as of today) and 7621 members with the scheme, as seen on the slide, at it’s peak: in 5 years time it’s a simple fact that a significant number of members will sadly pass away. Secondly, the deficit is reliant on a discount rate and that if that rate rises by a simple 10bp it wipes over 10% of the pension deficit away. An even greater but still small rise in the discount rate over that 10bp would have a hugely significant effect in greatly reducing the pension deficit. So, for these two reasons, I think that both Mr Market and the market commentators are seeing a problem as far more of a millstone than it actually is!
My View: A good encouraging positive TU from NXR yet they remain a touch unloved by Mr market and I am convinced that two of the main reasons for that are firstly the perception of its pension deficit and secondly the apparent incredibly boring nature of the business. As for me, yes you have guessed it, boring is good and I like the numbers: NXR sits on a PE of 5.8 that is reasonably close to their yield of just under 5% which is handsomely covered 3.2 times by FCF and a very decent forecast eps growth giving a PEG of 0.2: I should also say that Stockopedia have it on a stock rank of 96. I have included below the useful financial summary, what I call the dashboard, from the excellent SharePad:
Thursday 27/07/2017: Bodycote: BOY: Interim Results.
At the time of writing last week’s RNS log, I did say that following
that very positive "game changing" RNS last week that I would consider topping up by original holding bought in early 2016 and I duly topped up early Monday morning.
The results were really quite sparkling & to my mind, real quality:
extract of key numbers
· Group revenue up 18.8% (up 8.3% at constant currency)
· Organic constant currency revenue growth of 4.8%
· Headline operating margin increased 90bps to 17.8%
· Headline earnings per share up 29% to 23.6p
· Free cash flow doubled to £42.1m (2016: £20.9m)
· Net cash of £17.7m (2016: net debt £5.5m)
· £36m growth investment projects approved in the period
· Interim dividend of 5.3p, up 6.0%
The outlook also looks very positive:
“Bodycote achieved strong revenue growth in the first half, with good momentum in virtually all parts of the Group. Notably, the General Industrial business, which represents almost 40% of Group revenues, experienced a broad based recovery after over three years of decline. Automotive and Aerospace also moved ahead.
The growth strategy of bolt-on acquisitions and greenfield investment contributed 5.5% of the 8.3% constant currency growth. Investment in new projects has been stepped up.
The high margin Specialist Technologies continue to perform strongly and the margin expansion programme in European AGI is seeing further success.
The positive momentum achieved in the first half is expected to continue. While our business, by its nature, has limited forward visibility, the Board now expects the full year result to be towards the upper end of market expectations”.
My View: I just don’t feel that the market has priced in the significance of last weeks game changing announcement from BOY; a conservative company I have followed, invested in and respected for many years. Just to refresh, the RNS said “Bodycote has decades of experience creating complex, high integrity components from powdered metal. Bodycote Powdermet® technologies now incorporate new, patent-pending techniques that combine 3D printing with well-established net shape and near net shape techniques. This new technology dramatically reduces the manufacturing time and production cost of a part compared to producing the same part using 3D printing alone”. In fact, I don’t think it's a bad thing Mr Market being that slow as it gives us PIs a bit of an edge: as ever, all just in my opinion and most definitely not advice.
I am very happy to continue to hold and should there be an attractive pull back shortly, will add to the current holding yet again. Incidentally, looking at the numbers and the very positive announcements from Bodycote, I expect some significant increases in broker forecasts* for this quality business to be announced.
*Footnote: just seen a note this morning; brokers have indeed started to raise forecasts but at this stage I suspect they increase in forecasts is mainly centred around yesterday’s very good interims :
Thursday 27/07/2017: Just Eat: JE.: Interim Results and what a pleasant set of interims these are with headline numbers comparing to the same period as last year Financial Highlights (taken from RNS)
However, we continue to drive channel shift and are pleased that 75% of total orders are now placed on mobile devices. In the UK, we have seen increased traffic to our website and improved consumer reorder rates, demonstrating the strength of our brand loyalty. Our international businesses, now 43% of Group revenues, have enjoyed further good momentum. In particular, the acquisition of SkipTheDishes has generated revenues above expectations and consolidated our market-leadership in Canada”.
The outlook goes on to tell us “Revenues for the First Half were ahead of management's expectations. Reflecting this more positive outlook for the Group, we are pleased to raise our revenue guidance for 2017 to between £500 - £515 million up from £480 - £495 million. In line with our strategy, we intend to reinvest this revenue outperformance into additional profitable growth opportunities, including further building on the momentum within the business and increased collaboration with branded UK restaurants. Therefore, EBITDA for the Full Year is still expected to be between £157 - £163 million."
Therefore the company are telling us that EBITDA for this year will be either in line with or slightly below the current forecast EBITDA due to this extra reinvestment to grow the business: I am ok with this but it may spook some due to the current high rating of the shares.
My View: I will continue to hold JE which is really building on what is a very dominant market position. The shares pull back a touch but in my view one to keep holding and possibly add to on the pull backs. Just a footnote that ordering through Just Eat can have its advantages compared to as simple call to your local takeaway. My son ordered a pizza which failed to arrive anywhere near on time, the shop’s fault: JE credited the cost of the order and arranged for a complimentary pizza to be delivered. The result one happy customer comfortable with unhealthy take away food.
Thursday 27/07/2017: Bonmarche: BON: Trading Update:
Note: I took a bit of a contrarian position in BON recently as although on first look it appeared to be a business in decline it was at least to my view, in a transformational stage in its move to move into online sales, the encouraging if adventurous appointment of the Helen Connolly as CEO on August 2016 plus the well covered almost unreal dividend of 8% plus tempted me after a touch of responsible research.
Todays TU is very encouraging “Total sales for the 13 weeks ended 1 July 2017 increased by 7.6% against the corresponding period in FY17. Store LFL sales increased by 4.2% and online sales increased by 39.0%”. Out of italics now so it’s back to me: now it’s early days but that increase of 39% but at the same time remember that that large percentage increase is based on a reasonable modest online income last year of just under 10% of total sales but nevertheless very encouraging increase in online sales that could substantially boost earnings in the future.
The outlook informs us ”Trading during the first quarter of the new financial year has been in line with the Board's expectations, which are therefore unchanged in relation to the full year's result. The financial position of the business remains sound”.
My View: I am very comfortable with my position in BON, the dividend looks sound and the market should be reassured with today’s announcement: I will continue to hold and may be tempted to add a few more.
Friday 28/07/2017: RNS news for my me to consider BT: BT.A: 1st Quarter update which shows them as trading in line: in my opinion the bad news is all in the share price and I am looking for recovery from here. I bought these at a low price looking for some degree of recovery over the next 12 months and the added comfort of a 5% yield.
Note I see there is a trading update from G4M out today but I will leave that alone as I took some very good profits and no longer hold.
As ever, all views scribbled here are simply me sharing my thoughts with fellow private investors and in no way should be taken as recommendations to either buy or sell a stock.
Almost into August and in a few days time the real football starts; I simply totally ignore that grossly overrated “could not give a monkeys” premier league nonsense; no, it’s league football for me. So that means a return to writing about the Hatters exploits; indeed, life can be cruel at times!
Have a good weekend & as ever happy investing.
This is a new section fairly much in development within which I intend to offer some views on RNS ‘s covering shares I hold and maybe the odd comment on ones that I don’t currently hold. Being a new section it’s all a bit fluid but let’s see how it goes.
Well, this is the second week of my RNS log involving owned shares within my universe. The first one appears to have been well received and to be honest it’s good for me to get a few up to date thoughts into print for each of my holdings as the RNS machine clatters it’s way through the week. It also helps me to seriously ask the question “if I did not currently hold this share, then would I buy it now?” Anyway, a few announcements in terms of RNS from my universe stocks the week just past. I have briefly added a few thoughts in the text below: as ever, not advice but just my take on the RNS.
Tuesday 18/07/2017: Somero: SOM Trading Update.
I felt that the trading update was solid enough with reassuring noises about business in both North America & an improvement in China:-
“Group's continued expectation that trading for the full year will be in line with market expectations, as highlighted in the update provided on 5 June 2017”.
“On a regional basis, June 2017 trading activity in North America was at the highest levels of the year as weather conditions improved and projects commenced. H1 2017 trading in North America will show a slight reduction in trading from prior year levels given that H1 2016 trading was particularly positive. Looking ahead the Company remains encouraged by the healthy US commercial construction market, extensive project backlogs being experienced by its customers and the high level of activity that is carrying over into H2 2017. H1 2017 trading in Europe has been exceptionally strong, significantly increasing over the prior year, driven by broad-based geographic contributions. Latin America and the Rest of World territories were also significant contributors to growth in H1 2017 with trading significantly increased when compared to the prior year. Trading in the Middle East ended H1 2017 slightly down from the prior year as a result of a number of opportunities in this territory having been carried over into the H2 2017. In China, June trading was also at the highest level of the year and despite H1 2017 trading falling below the prior year, the Company expects improvement in the second half”.
My Action: well I still hold some SOM having originally bought in at just over 100p back in 2014. They had become a fairly significant percentage in my portfolio and I greatly reduced my exposure in late May & early June 2017 at an average price of slightly over 300p. The exposure I had to SOM at the time as well as getting to be overly dominant within the basket started to look about rightly priced for a cyclical business whose machinery is not patent protected. They have a reputation for excellence in 24hr 7/7 customer service/client help and I became slightly nervous that this differentiation could last for another couple of years; will the Chinese go with that reputation of bolt on that type of service to their own similar offerings? Nevertheless SOM is an excellent business and I am happy to retain an interest with a particularly significant position in the Tinker.
Tuesday 18/07/2017: Amino: AMO: sale of shares by Azina 1 LP who had a considerable holding at 10% and sold a million shares to reduce their holding to 9%. Azina have been gradually reducing their position in AMO over a few months.
Is it anything to worry about? Well no, I don’t think so as; have a look at the attached from SharePad:
Wednesday 19/07/2017: Tristel: TSTL: Trading Update:-
For the year ended 30 June 2017 Tristel will record turnover in excess of £20 million (2016: £17.1 million) and pre-tax profit (before share-based payments) of at least £4 million (2016: £3.3 million). Both turnover and pre-tax profit are ahead of market expectations. In the second half, revenue from overseas markets contributed 50% of the Group total compared to 43% in the first half, and for the full year overseas revenue represented 47% of Group revenue - a record level. Tristel has continued to generate significant levels of cash and at 30 June 2017 cash balances were £5.1 million (30 June 2016: £5.7 million). The Company has no debt.
My view: I hold a much smaller position in TSTL that my original 70p purchase & various historic top ups but nowadays only maintain a fairly modest position. I think they are a decent company but two things just concern me a little; firstly the high valuation on the shares with lots of expectation built into the share price and secondly these share-based payments which are really “pay” but shuffled to one side and thereby possibly flattering profits. Note, I say possibly as we as yet don’t know the value of these payments but last year they were £0.7m and as I recall not mentioned in the July 2016 TU. This year the share-based payments actually get a specific mention in the TU; does that mean they will be similar or larger than the £0.7m of 2016? I really don’t know but will have to wait until the annual report is released in October to find out.
Thursday 20/07/2017: IQE: Trading Statement: Well I do have some history with IQE having held over a period starting in about 2011 and lasting for all of three years until I became overly bored with them. Nevertheless, I have continually kept a watch on IQE with a mixture of mild curiosity thinking that that particular train would maybe never leave the platform let alone the station! However, things started to unfold a touch in December 2016 with a statement to inform the markets “the Group announces that it is on track to deliver FY 2016 revenue and adjusted operating profit ahead of expectations”. This was then followed by more reassuring director speak with the finals in March 2017 with the shares sitting around the 50p mark.
Anyway, back to Thursday’s TU: “Strong growth in H1 revenues marks the start of increased VCSEL wafer demand for mass-market consumer applications, and triggers a capacity expansion to meet higher levels of expected demand in H2 2018”. The TU then goes on to say:- “As a result, the Board has now approved a capacity expansion plan to meet higher levels of expected demand for H2 2018 than previously anticipated. This follows increased investment during H1 2017 in operating costs, product development and working capital to help position the Group for the expected ramp and meet higher levels of growth in H2 of 2017”. The CEO then chips in (sorry about the chips!) to say “In light of recent progress and its increasingly confident outlook, the Board expects the Group will now exceed market expectations for the full year and whilst it remains early into the start of the mass-market adoption of our technology, it is possible that with the current contract momentum, a more significant upgrade to current market expectations could be delivered for 2018”.
My Action: I will now sit on my hands and possibly add to my current holding if the share dips below 90p. It’s one of those shares that I find difficult to value by my prefered methods so maybe I will be content to rely on the ubiquitous and ridiculously overly respected PE rating which although in the high 20’s will surely fall as brokers up their forecasts. Of course, with any highly rated growth company, a slightly less than sparkling RNS, should that happen, will hit the share price but that’s what comes with investing in the slightly more exciting stuff.
Thursday 20/07/2017: Bodycote: BOY: RNS Titled: BODYCOTE LAUNCHES GAME CHANGING Powdermet® TECHNOLOGIES
“Additive manufacturing processes that can dramatically reduce production time and cost of 3D printed parts”.
My Action: I am tempted to add to the current holding but will wait a week or so before taking a decision.
Finally a share that I have mulled over but just could not convince myself to buy into
Safestyle UK: SFE. Although the share came through my screens several times in recent years I just did not feel comfortable with the business maybe it was the bias created by those appaling “you buy one you get one free” adverts. Maybe it was down to my view that this was really a householder discretionary purchase for when folk are flush; maybe it was simply my detest of plastic window frames! On Tuesday 18/07/17 SFE issued a profits warning:
“As outlined in our AGM statement, we expect to report marginal revenue growth in the first half of 2017, with reduced profits. Given the uncertain market conditions and weaker consumer confidence, we consider it prudent to expect only modest revenue growth again in the second half of the year. This would result in profits for the year being lower than previously anticipated and broadly in line with 2016. Cash flow has continued to be strong and we had net cash of £17.7 million at 30 June 2017 (30 June 2016: £23.6 million), the year on year reduction reflecting the investment in our new production facilities and the payment of a special dividend in July 2016”.
My comment: looks a decent business still but even before the profits warning, the share price graph has been rolling over. As I say, I have not held any of these but in my view probably a decent business so maybe worth another look one day if I can get over my prejudices.
While we are on the subject of profits warnings, I almost exclusively sell on a profits warning (PW) as soon after 8am as I can on the day of the PW. I did write a blog about my way with profits warnings a couple of years ago; in fact about a year before the excellent piece on PWs by Sharescope who came to the same conclusions as I had. Often it’s about six months for the dust ripples to dissipate after a PW; but straight after a PW is often an unnecessary risk to your capital by taking a position.
Well, lets see what next week brings: I see we have interim results for ITV & JE scheduled so let’s see what the week brings.
This is a new section fairly much in development within which I intend to offer some views on RNS ‘s covering shares I hold and maybe the odd comment on ones that I don’t currently hold. Being a new section it’s all a bit fluid but let’s see how it goes.
Week commencing Monday 10th July was expected to a be a busy week for the portfolio with trading statements and results scheduled in for a number of holdings. Rather than just simply tweet a few thoughts which I will continue to do, I will now also when time permits, post a periodic review maybe weekly, maybe monthly of my thoughts on shares either that I own or are worth a few lines of aimless whittering of my thoughts. Of course, as ever, nothing I write about should be taken as a recommendation to either buy or sell a share within your own portfolio, I merely write comments as I see things.
A few thoughts about shares I own that have issued an RNS in the last few days:
11/07/17: Amino Technologies: AMO: Interim Results: I think these read rather well. The revenue growth shows an impressive 21% rise although it has if course benefited from a currency aid which is mentioned in the report. The operating profit is up an impressive 64% and the cash flow looking very healthy.
If we add in an encouraging outlook then the shares retain an attraction for me.
Outlook: Having delivered a strong performance in the first half, we expect to continue our progress in the remainder of the year and beyond. Our sales pipeline is robust and we are confident that we will deliver full year profits in line with market expectations.
My thoughts: the numbers continue to look very attractive to me with a decent return on capital, a reasonable and increasing dividend. I note the brokers have edged up their earnings estimates for 2017 & 2018.
My Action: AMO will continue to reside within the folio but as ever with small companies, not without risk.
11/07/2017: Galliford Try: GFRD Trading Update well, of course, most holders would have felt a degree of trepidation following that dreadful trading update from Carillion a mere 24 hours earlier; hells bells that CLLN one was dreadful! Well thankfully the GFRD trading update was very reassuring and gave me no reason to hit the sell button:
Overview from GFRD TU
· A strong underlying financial and operating performance across all three businesses for FY 2017, with profits towards the upper end of the analysts' range
· Linden Homes and Partnerships & Regeneration expected to deliver increased revenue and improved operating margins, while newer contracts in Construction are performing well
· No movement in the £98m non-recurring costs in Construction, as announced on 3 May 2017
· Modest net cash at 30 June 2017 (2016: net debt £9m)
· Expect to pay dividend in line with previous guidance
· Well positioned to deliver against 2021 strategic targets
The Outlook was also fine: The Group's outlook for FY 2018 is unchanged. Linden Homes is expected to deliver further volume growth and improvement in the operating margin. Partnerships & Regeneration continues to enhance its position to benefit from the demand for affordable housing, while Construction's margin is expected to increase as we close out legacy positions.
My Action: All good stuff: no action taken and GFRD retained in the portfolio and dividends reinvested.
Waterman: WTM: just digging around in my iWEB and my Waterman shares have now been replaced with cash following the takeover. That gives me a very comfortable total return of 68% in about a year; I am happy with that.
12/07/17: Fulham Shore: FUL: Year End Results: Now firstly I should say that I only have a relatively small holding in FUL in terms of a percentage of my portfolio due to my perception of risk within the crowded hospitality sector. I have tested the product and can confidently say it’s both good in quality and value and is definitely something a touch special compared to the tired offering of traditionally accepted major pizza outlets. Nevertheless, the end of year results made quite reassuring reading:
Revenues for the year ended 26 March 2017 of £41,274,000 (2016: £29,251,000)
• Headline EBITDA for the year ended 26 March 2017 of £7,118,000 (2016: £5,232,000)
• Headline Operating Profit for the year ended 26 March 2017 of £4,670,000 (2016: £3,280,000)
• Operating Profit for the year ended 26 March 2017 of £1,278,000 (2016: £507,000)
• Profit after taxation for the year ended 26 March 2017 of £969,000 (2016: £76,000)
• Net debt as at 26 March 2017 of £5,909,000 (27 March 2016: £3,283,000)
• Opened 13 new Franco Manca pizzeria and 3 new The Real Greek during the year ended 26 March 2017 (2016: 7 Franco Manca pizzeria and 1 The Real Greek)
• Launched click and collect takeaway service in both Franco Manca and The Real Greek
• Since the year end:
The view on the UK restaurant market contained in the report is really well worth a read, here is an extract:
Restaurant supply and demand often have a fractious relationship and, however quickly demand for eating out grows, there will always be a risk that restaurant supply may sometimes grow faster, either nationally or locally. In addition, we are entering a difficult forecasting period due to Brexit. Against this backdrop, some restaurant businesses will make the grade and others will not. We believe that operators with "me-too" offerings, over-rented sites, tails of unprofitable sites, dated menus, too much debt, poor concepts and unincentivised staff (or all of the above) will struggle.
However, I am confident that Fulham Shore is well placed as a dynamic operator with strong brands and a good portfolio of sites. We believe that our businesses have significant growth potential across the UK underpinned, first and foremost, by the quality and value of their customer offerings. As a result, and despite the challenging backdrop, we are confident that the Group will continue to perform well in the fast-growing casual dining market.
My Action: I will simply keep holding and visit their establishment soon on a visit to our busy capital.
13/07/2017: Dart Group: DTG: it’s year end results came in pretty much in line with brokers consensus. It was expected that profits would be less due to the investment at Birmingham & Stansted airports; so no great shock there. The narrative also stated that the company expects to meet market expectations for the year ending 21st March 2018. Punters, many of whom expect far too much far too soon, seemed to feel that DTG had lost its immediate sex appeal. That coupled with the dreaded Brexit fears in the narrative caused an immediate ripple in the market. Now for my part although I have owned DTG since 2013, I decided to sell 60% of my holding for 633p shortly after the open: my usual unemotional approach to my holdings. Now I feel that DTG is a very decent company and will do well over the next few years but it was simply time for me to reduce my exposure on this one: brilliant run since 2013 and once the turbulence settles I may buy some back.
My Action: I sold 60% of my holding at 633p shortly after the opening bell. Just as well I moved my distance swim back to 6:30am on a planned RNS day!
Telford Homes: TEF: AGM Trading update: another very reassuring update from this class act, an extract:
Our confidence in delivering continued growth remains unchanged, supported by the chronic need for new homes in London. The Group is on track to exceed £40 million of profit before tax for the year to 31 March 2018 and £50 million in the year to 31 March 2019 having already secured over 80 per cent of the anticipated gross profit for 2018 and over 60 per cent for 2019. As was the case in the year to 31 March 2017, whilst all of our developments are being delivered on programme, the timing of their completion is not evenly spread across the current financial year. We expect less than a quarter of the forecast open market handovers for the year to occur in the first six months and as a result full year profits will be significantly weighted towards the second half.
Ok, we have a fair weighting to the second half of the year but this is a company I respect and trust with good management in charge of the business.
My Action: I will continue to hold and reinvest the dividend in more shares.
NewRiver REIT: NRR: brief RNS first quarter update which looks encouraging enough. As expected a very healthy yield at about 6% and modest but acceptable capital growth.
My Action: I will continue to hold and reinvest the dividend in more NRR shares.
Comment on news for one which thankfully I don’t own:
Carillion: CLLN: well glad that one was not in my universe. Due to its incredibly high yield, it did attract my attention for a quick look but was immediately excluded from further interest due to its inability to cover dividend payments from FCF in two of the last three years. I always ask myself where is the money coming from to pay the dividends and should I feel the slightest bit unhappy, I move on.
Next week promises to be a very quiet week in terms of scheduled RNSs for the shares within my portfolios; as yet I can’t see any in the diary. So bearing in mind that with investing the next profits warning may be just around the corner, a boring quiet week will do just fine.