Morning Brief – 25-Oct-2017

Morning Brief Images 25-Oct-2017

Morning All!

Lombard Risk Management (LRM) – 10.75p – £43.1m

Interim Results For The 6 Months To End September 2017 – Revenue down (16.4%) and a whopping Loss Before Tax of £5.9m versus -£0.1m last time.

I think I’d be running for the door if I held this!

Redde (REDD) – 158.75p – £487.8m

Trading Update For The Period 1 July to 24 October 2017 – The positive start to the year has continued – LFL Revenue is up as are Profits (no indication of how much).

Decent growth here with a huge 7% or so dividend – Although it’s not particularly well covered (<1). With no Cash in the bank this just seems weird enough for me to, rightly or wrongly, steer clear.

Photo-Me International (PHTM) – 171.25p – £636.7m (covered because I hold from pre £500m)

Trading Update For The First 5 Months Of The Year – LFL Revenue up 11.2% (CC) consistent with full year expectation and “cash generation remains strong. This continues to support our progressive dividend policy”.

As a holder here, would have liked a more upbeat statement. I have a concern that growth seems to be slowing slightly for the PER of 16.8. However, the ROCE (30%+) is great as is the yield (4%+ plus special dividends). It’s also got a decent amount of cash (5% of Market Cap) which, when it gets too big, is usually paid out to fund those special dividends. I remain a holder here but don’t see this pushing through the elusive 180p ceiling off the back of this update.

Nexus Infrastructure (NEXS) – 191.5p – £73m

Trading Update For The 12 Months To End September 2017 – An in-line update with an order book of £202.7m, up 25% on the same time last year.

First time I have come across this company, that’s the beauty of reading the news – For me it’s the best way to find investment ideas. Anyway, quite like this. It’s not the most consistent or strongest growth story out there but I think there’s potential. The order book is up 25% LFL, the ROCE is fantastic, the Operating Margin is above average for the sector, Net Debt is £9.67m (over 10% of Mkt Cap) and it looks forecast to start paying a 3% Dividend. On a PER of 8.82 I reckon this is worth a further look.

Quite liking that new find NEXS today…

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