Morning Brief – 31-Jan-2018

Morning Brief Images 31-Jan-2018

UK Stock Market News Today – 31-Jan-2018

Morning All!

Low & Bonar (LWB) – 54p – £183.4m – PER 7.64

Unaudited Results For The 12 Months To End November 2017 – Not exactly inspiring, a few board changes also announced.

Uninspiring update, board changes, huge Net Debt here for me. This remains on my Avoid list.

Joules (JOUL) – 325p – £284.4m – PER 25.0

Interim Results For The 6 Months To 26 November 2017 – Revenue up 18.2% YoY (17.5% CC) to £96.2m, PBT up 24.3% to £9.3m with Net Cash of £3.0m (up from £1.4m). The Board expects full year profit to be slightly ahead of the range of analysts’ expectations.

Still like this and although I think it’s expensive, it may well be justified. It’s going back on my Watchlist, 290p.

Renew Holdings (RNWH) – 450p – £282.9m – PER 13.0

AGM Statement – Trading in-line, no exposure to Carillion.

This is comment in the latest update is a bit of a concern “A slower than usual payment profile with certain customers in the public sector has led to an increase in work-in-progress in the first half. Nevertheless, cash balances as at 30 September 2018 are forecast to be broadly in line with the previous year end”. With Paul Scott (whom I have the greatest respect for) having mentioned something along the lines of, this is a potential time bomb financed through stretched working capital” I will remain quietly Neutral here.

Best Of The Best (BOTB) – 240.3p – £24.3m – PER 24.9

Interim Results For The 6 Months To End October 2017 – Revenue of £5.54m (2016: £5.52m), PBT £0.95m (2016: £0.92m), Cash of £2.05m (2016: £2.28m), no debt, online revenues up by 6.8% to £4.44m (2016: £4.16m), now 82.0% of total revenue. EPS is 7.67p (2016: 7.5p) and there’s a Special Dividend of 7.5p per share (£0.74 million) to be paid on 23 February 2018. Trading is in-line with management expectations.

I still quite like this company and but this is an uninspiring update. I would have preferred to have seen that Special Dividend to be spent on advertising and getting more customers. This was on my Watchlist but I just can’t think at what price I will now be interested. I am going to Neutral here.

Wynnstay (WYN) – 484.9p – £92.7m – PER 14.2

Final Results For The 12 Months To End October 2017 – Revenue from continuing operations up by 10.5% to £390.72m (2016 restated: £353.73m), Underlying PBT from continuing operations up 9.2% to £7.97m (2016 restated: £7.30m) – Restated due to the impact of Just for Pets Limited (went into administration in October 2017). Net Cash of £4.51m, total Dividend for the year is up 5%. New financial year has started in line with management expectations.

I just don’t get any sense of confidence here and I’m going to sit on the side-lines for now.

SCS (SCS) – 202p – £80.8m – PER 8.72

Trading Update For The 6 Months To 27 January 2018 – “The Group has traded in line with the Board’s expectations in the first half of the financial year, including the key winter sales period. We believe the Group’s increasing resilience and value proposition will enable us to manage the continued economic uncertainty and take advantage of opportunities”.

This seems reasonably encouraging and even though the BIG Dividend is reasonably well covered I will remain Neutral for now.

PPHE Hotel (PPHE) – 1120p – £474.0m – PER 14.2

Trading Update For The 12 Months To End December 2017 – In-line.

I maintain a similar view here to last time. I just can’t get excited about investing in hotels – Airbnb is just a much better experience for many now. And, if I was looking to invest in the sector I would probably try and find a group carrying less Net Debt than £621m (well over 100% of it’s Mkt Cap).

Onwards to February!

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