Voyager RNS Log Catch Up @ 24/11/2017
Hello, nice to be back posting after what has been a rather testing break due to a whole host of non-stock market issues that have held my time captive. I feel all the IT issues are just about sorted and heavens if only people issues were easier to resolve; such is life! Anyway back to sanity and a look at the main RNSs that impact stocks from within the Whittler portfolio.
As this is a catch-up session and time is limited, I am also spending hours on a disaster recovery for the Luton262 football fans forum that crashed and expired, means a new site, I will just do brief headline notes for this week. Next week I will return to my usual fag-packet waffling on ways! Oh, if anybody is interested I had my last cigarette over 25 years ago but I just love the fag-packet calculation expression.
So here we go: with a look at the more significant RNS’s for my universe shares over the last three or so weeks:
31/10/2017: Just Eat plc Trading Update
Q3 2017 Update
Strong Q3 performance; increased full year revenue guidance
-- Reported revenues were up 47% to GBP138.6 million in the Third Quarter (Q3 2016: GBP94.5 million) driven by strong order growth and the inclusion of SkipTheDishes.
-- On a currency neutral basis, revenues grew by 44%.
-- Total orders were up 29% to 43.1 million in the Third Quarter (Q3 2016: 33.3 million).
-- UK orders were 26.2 million (Q3 2016: 21.4 million), up 22% against a comparative period that was impacted by unseasonal weather conditions.
-- International orders were up 43% to 16.9 million (Q3 2016: 11.8 million), driven by triple digit pro-forma order growth from SkipTheDishes.
-- Proposed acquisition of Hungryhouse received provisional clearance from the Competition and Markets Authority.
Given the continued strength of SkipTheDishes, driven by commensurate investment, we are pleased to raise our previous revenue guidance for full year 2017 of GBP500-515 million to between GBP515-530 million and retain that of underlying EBITDA of between GBP157-163 million.
Peter Plumb, CEO commented:
"The Just Eat team has once again delivered another period of strong growth. As I get to know the company, it is great to see the UK business in good health and positive momentum across our international markets, particularly in Canada where SkipTheDishes' delivery expertise and relentless focus on customer service are driving excellent results.
We will continue to invest for growth in technology, marketing and great people."
My View: well it all looks rather good to me with the very reassuring statement increased full-year revenue guidance; remember it’s only a few weeks ago that the market took a little fright on 27/7/17 when they informed the markets about further capital investment proposals. Well, that proved to be a beautiful buying opportunity to add further stock if one felt the need and the price has motored up by over 30% since that little wobble. Yes, expensive for those who like PE valuations but sometimes you have to pay for quality and growth.
02/11/2017: Norcros NXR: Proposed Acquisition of Merlyn Industries Limited
Norcros (LSE: NXR), has agreed to acquire Merlyn Industries Limited ("Merlyn"), a market leading, innovative designer and distributor of mid to high end branded shower enclosures (the "Acquisition"), for total consideration of GBP60.0 million on a debt free, cash free basis (subject to certain adjustments).
The Company also announces its intention to conduct a firm placing and placing and open offer to raise gross proceeds of GBP31.4 million (before expenses) (the "Capital Raising") to part-fund the Acquisition through the issue of 18,254,161 new ordinary shares in Norcros (the "Placing Shares") at a price of 172 pence per share (the "Placing Price").
- Strategically and financially compelling transaction for Norcros
- Acquisition of Merlyn, a growing, profitable, market leading business for total consideration of GBP60.0 million on a debt free, cash free basis (subject to certain adjustments)
- In the year ended 31 March 2017, Merlyn reported revenues of GBP30.7 million and operating profit of GBP6.4 million
- Acquisition consistent with Norcros' strategy to enhance its bathroom product portfolio
- Addition of a number of well-established and market leading brands to the Group's existing portfolio
- Merlyn enjoys established multiple sales channels which provide end market diversification and significant future growth opportunities
- Merlyn is at the forefront of shower enclosure design and innovation
- Experienced management team to be retained - led by Charlie Soden
- Acquisition expected to be earnings enhancing in the first full year of ownership, and return on investment expected to exceed Norcros' cost of capital(1)
The Firm Placing and Placing and Open Offer
- Firm Placing and Placing and Open Offer to raise up to GBP31.4 million (before expenses) at the Placing Price of 172 pence
- The Placing Price represents a discount of 5.9 per cent. to the Closing Price as at 1 November 2017
- Proposal to raise GBP10.6 million through the issue of 6,165,312 Placing Shares pursuant to the Firm Placing and GBP20.8 million through the issue of 12,088,849 Placing Shares pursuant to the Placing and Open Offer
- Numis Securities Limited ("Numis") is acting as sole sponsor, financial adviser and sole bookrunner in respect of the Placing
- The Capital Raising will be used to part-fund the Acquisition, with the balance of the Acquisition consideration (plus associated transaction costs) to be funded from the Group's new GBP120 million debt facility
- Directors of the Company have indicated their intention to subscribe for Placing Shares in the Open Offer
My View: well the acquisition certainly has a number of attractions including an overall dilution of the “elephant in the room” pension issue. This share resides in my income portfolio and it’s about as unexciting as a business can be yet it pays me far more in dividends than what a bank could offer and looks at least to my eye, ridiculously cheap. As I have said before in these notes, I don’t think that the incredibly mature pension obligation is anywhere of a serious issue especially with an average age of member just about to hit 80. However, as I have a good number of NXR in my high yield folio, I declined to take up the offer as the discount was simply not attractive enough. I will hold what I have for now and watch the paint dry. I should also add that the interim results issued on 16/11/22017 were also very decent in my opinion. Overall a decent dividend paying business that may on day substantially increase in price should the investor not die of boredom.
08/11/2017: Persimmon: PSN: third quarter trading update: as sort of steady update with nothing to particularly excite the market and the shares have since fallen back a few %points. Personally, I am not unduly worried and this company has performed phenomenally well in terms of total return since those wonderful post Brexit referendum days when Joe Public was asked to cast a vote on something of which he had just about zero comprehension.
My View: I will continue to hold and reinvest the dividends but at the same time be mindful of the cyclical nature of the housing market.
15/11/2017: AB Dynamics: ABDP: Final Results and to me they read very well but I know a good number of investors were concerned about Adjusted to exclude share option costs of £1.5m (2016: £0.3m).
My View: Personally whilst I have freebies for companies not really doing the desired work for their investors, I am happy enough that the business is growing and incentives being offered to retain key and expert staff; probably not in a dissimilar way to BVXP in the wish to retain highly skilled staff within the business. The shares are nicely up since the initial fret over the announcement. I will continue to hold.
16/11/2017: Dart Group: DTG: Interim Results:
Since the half-year end, we have seen a further strengthening of customer demand, particularly for our flight-only product. This has resulted in future Leisure Travel bookings for this financial year performing ahead of expectations. As a result, the Board is optimistic that market expectations of Group profit before foreign exchange revaluation and tax for the year ending 31 March 2018 will be materially exceeded.
My View: I do like this company and remember well when I thought I had missed the boat when I initially bought in at around 200p. The market seems to like the results and the shares have soared up to around 720p including about 10% since the results were issued. I see no reason to sell: happy holder.
Bonmarche Holdings: BON: Interim results. These make pretty good reading from a retailer that is probably considered to be a boring as it gets:
Total revenue up 5.0% to GBP97.8m (FY17 H1: GBP93.1m)
Combined LFL sales growth 4.3%; store-only LFL sales up 1.6%, online sales up 38.6%
Product gross margin remained level with the same period last year
In line with Board expectations, profit before tax of GBP4.2m (FY17 H1: GBP2.0m)
Basic EPS was 6.8p (FY17 H1: 3.1p)
Inventory levels at GBP23.5m compared to GBP24.8m at the end of FY17 H1
Net cash of GBP14.9m at the half year end (FY17 H1: GBP9.8m)
Interim dividend of 2.5 pence per share (FY17 H1: 2.5 pence)
My View: well I originally bought these a few months ago at the 90p mark viewing them as a special situation with the added attraction of an apparently safe exceedingly generous dividend which as in the order of 7%. The real drive behind this special situation was the super growth albeit from a low base of the online retail side of the business. The shares performed very well for me in a relatively short space of time and I personally think there is more to come but fashion is fashion even at Bonmarche. I will continue to hold.
Well, that’s it from me in terms of a brief update. Oh, hang on what about glad I am not here? Well, to be honest, I have had plenty of that myself in non-stock market terms with a dead MBO/IT issues and jumping in to rescue a Hatter's football site: so in non-stocks terms, I have been where I would rather not be but a challenge is a challenge.
Have a great weekend, I will be travelling up to Crewe for the football and calling at a very unusual real ale brewhouse that is not normally open on a Saturday lunchtime but has kindly opened for Hatters supporters by special request.
lick here to edit.