Morning Brief – 15-Dec-2017

Morning Brief Images 15-Dec-2017

Morning All!

Luceco (LUCE) – 232.5p – £373.9m – PER 17.9

Trading Update For The Year To End December 2017 – Hit by a fall in Gross Margin (RMB exchange rate, GBP weakness, increased commodity costs (and not being able to count (stock))) – Expects PBT of £13.2 versus market expectations of £16.7m. Revenue forecasts for 2017 and 2018 to be in-line.

Surprised there was no follow up announcement of board changes, I am staying well away from this. It may not be complete incompetence but for me, there’s a fair degree of it.

Fulham Shore (FUL) – 11.75p – £67.1m – PER 17.3

Unaudited Interim Results For The 6 Months Ended 24 September 2017 – LFL Revenue up to £27.5m from £19.5m, Profit up to £0.6m from £0.5m. Classed as “satisfactory” the outlook sounds more pessimistic than optimistic.

After a 50% fall from 2017 highs this is still way too expensive for me.

Reach (RCH) – 71.75p – £196.2m – PER 2.11

Trading Update – In-line. Buy Back of 10m shares in November. Pension scheme contributions to rise £8m to £44m for the next 10 years.

Really cheap now. The pension deficit is HUGE and it seems this is priced to reflect the fact the print sector is in terminal decline. However, there will probably be a need for print for the next few years and that pension contribution is around the 50% of PBT mark. The circa 8% Dividend is well covered and there’s no mention so far of it being cut. Interesting enough but will wait to see the next results.

SThree (STHR) – 356p – £462.9m – PER 13.3

Trading Update For The Financial Year To End November 2017 – Seems to growing albeit at a slow pace.

Stockopedia loves it (StockRank 98) but even on a PER of 13.3 I don’t see the value here.

Telit Communications (TCM) – 158.25p – £206.8m – PER 10.1

Trading Update – In-line but still in discussions about covenants.

I’m steering well clear.

SDL (SDL) – 460p – £378.4m – PER 17.1

Trading Update For The Year To End December 2017 – When it opens with “sales pipeline in-linewith expectations” you just know somethings not right.  I still don’t understand how highly paid executives believe putting a useless positive before the real truth helps anyone. Anyway, the group is reliant on sales which may not be awarded before the year end so results may be below (I guess this means will be below) market expectations.

The nature of the update, the pure waffle, I looked at the fundamentals. They seem OK to be fair but I reckon this could soon be half the price it was at its 2017 high of 670p.

Have a great weekend!

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