Morning Brief – 23-Nov-2017

Morning Brief Images 23-Nov-2017

Morning All!

Netcall (NET) – 41p – £61m – PER 18.9

AGM Statement – “The Group has experienced robust trading in the first few months of the financial year”. A Bullish statement but nothing regarding in-line/above/exceed/ahead of – That’s a pity, maybe those attending the meeting will ask!

Doesn’t look too bad – Operating Margin and ROCE are decent and there’s Net Cash (about 20% of Mkt Cap). I would need to await results for actual numbers to form an investment decision of some sort. I guess the price action after the meeting might help, assuming the right questions are asked.

Mothercare (MTC) – 83.5p – £138.8m – PER 7.32

Interim Results For The 28 Week Period To 7th October 2017 – “Continued transformation of the brand, converting into positive UK like-for-likes set against a challenging consumer backdrop” – Doesn’t exactly seem transformational to me.

I just can’t get interested here. Still too many negatives even though online sales are up 57% and now make up 42% of Revenue. I just see people in the future using a collective market (Amazon) than a specific one – It’s usually cheaper and delivery can be within 2 hours.

Hogg Robinson (HRG) – 76.63p – £249.6m – PER 11.3

Interim Results For The 6 Months To End September 2017 – The Chief Exec is “delighted to see early and positive results from our new strategy for growth” – Revenue down 5%, PBT down 10% and EPSdown 6%.

Happy not to take part in this “growth strategy” where confidence is so high the Interim Dividend has been raised a whopping 6%. On a positive note the Pension Deficit is down to 10% to £243.5m which means its now actually less than 100% of the current Mkt Cap!

Majestic Wine (WINE) – 383.25p – £272.8m – PER 19.5

Results For The 6 Months To 2nd October 2017 – “Ready to accelerate growth” – Adjusted PBT up£6.7m to £6.8m from breakeven in H1 2017, Sales up 4.2% and on track to hit £500m by 2019. The Interim dividend is up 33.3% to 2.0p per share.

This is what puts my simple brain off this company – “Ready to accelerate growth”, on track to hit £500m in Revenue by 2019. Let’s look at Revenue on Stockopedia… 2015 – 2017 was £284.5m up to £465.4m and 2017 – 2019 is now forecast to be £465.4m to £516.7m. Now, this accelerated growthmay be related to the very poor Operating Margin or ROCE, I don’t know and I could be wrong. But as on track to hit £500m in Revenue by 2019 was mentioned I assumed the acceleration referred to Revenue.

CMC Markets (CMCX) – 166.75p – £478.3m – PER 13.1

Interim Results For The 6 Months To End September 2017 – Revenue up 19% (£89.6m) and PBT up58% (£29.8m) on high value client business. H2 trades in-line although there are still concerns regarding regulatory uncertainty. This comment is worthy of a thought “the Group considers a greater level of regulation could give it a competitive advantage as some smaller, less established players may find it more challenging to meet the new requirements”.

Yielding 5% (reasonably well covered) or so if you wish to accept the potential regulatory impact – This looks decent value here.

Telit Communications (TCM) – 189p – £247m – PER 12.3

Board Changes And A Trading Update – The Chairman says “These board changes mark a new beginning for Telit” – It certainly seems like it “the Board expects adjusted EBITDA for the year to be materially below previous guidance”.

This was on my Avoid list after reading a great insightful update by Paul Scott here – There was more detail (warnings) in previous updates of his too – Respect Paul.

That’s it from me for today

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