Morning Brief – 4-Sep-2018

Morning Brief Images 4-Sep-2018

UK Stock Market News Today – 4-Sep-2018

Morning all!

Mattioli Woods (MTW) – 832.5p – £217.8m – PER 20.0

Final Results For The 12 Months To End May 2018 – Revenue up 16.2% to £58.7m (2017: £50.5m), PBT up 27.3% to £9.8m (2017: £7.7m), Adjusted EPS up 11.1% to 37.0p (2017: 33.3p), Total Dividend up 20.6% to 17.0p (2017: 14.1p) and there’s Net Cash of £20.2m (2017: £23.0m).

I am Neutral here and will remain that way. I quite like this company but just can’t convince myself there’s value here at this price (Stockopedia seems to agree where there is a Value score of 25 versus Quality and Momentum scores in excess of 80).

Boku Inc (BOKU) – 184p – £394.2m – PER 128.6

Interim Results For The 6 Months To End June 2018 – Payment volume up 153% and number of users up 117%. Revenue is up 66% to $16.9m, Gross Profit Margin up to 92.4% from 90.7% (average for 2017) and there’s a Net Loss of $0.7m vs a Net Loss of $6.6m last time. Average Daily Cash $23.1m (December 2017: $19.2m). Current trading is encouraging with August Payment volume and number of users both up 100% on last year. Expecting to meet recently upgraded FY expectations.

Still tempted here and may well open an initial position at some stage, as I write I remain on the side-lines.

Filta Group (FLTA) – 239p – £64.9m – PER 27.0

Interim Results For The 6 Months To End June 2018 – Revenue up 15% (22% in CC) to £6.6m, PBT up 13% (22% in CC) to £1.0m, Basic EPS up 24% to 3p and the Interim Dividend will be increased to 0.72p, from 0.65p last time (let’s call it 10%). It seems perhaps FX will affect FY here “The currency environment appears less challenging in the second half of the year which has begun with a stronger US dollar.  Should this continue it would be an encouraging sign supporting higher revenue and profit growth for the second half”.

I hold here but will monitor this morning – Potential here looks good (especially with the lower margin fridge business out of the way) but this is not really what I expect from a company trading on a PE of almost 30.

Inspired Energy (INSE) – 21.15p – £126.5m – PER 12.3

Results For The 6 Months To End June 2018 – Revenue up 33%, PBT down -4%, Diluted EPS down -25%, the Interim Dividend is up 19%. Net Debt is up 50%+ to almost £20m. This is all in-line with managements expectations, entering H2 with confidence.

Slightly confused by this update, perhaps it’s just early in the morning – I am Neutral for now.

Lighthouse (LGT) – 31p – £39.6m – PER 17.9

Interim Results For The 6 Months To End June 2018 – Revenue up 5% (£26.88m), PBT up 12% (£1.26m), EPS up 13% (0.99c) with Net Cash of £9.6m (£8.1m in June last year). The Interim Dividend is increased 67% (0.2p). Expecting to meet FY expectations – The Chairman (of 6 years) is stepping down and search for a replacement will start soon.

I remain Neutral here as the growth rate (with a small Dividend), to me, does not seem to warrant a PE of almost 18.

Taptica International (TAP) – 345p – £233.7m – PER 9.73

Interim Results For The 6 Months To End June 2018 – Revenue up 119.4% to $144.0m, Gross Profit up 126.4% to $58.5m, Interim dividend of $0.0398 versus nothing last year and Net Cash is $42.1m (31 December 2017: Net Debt of $4.0m). Expecting FY EBITDA to be ahead of market expectations – Looking to use Net Cash to potentially fund acquisitions.

Looks great but I just can’t change from Neutral here at the moment – Spidey senses or something. Will perhaps look into a little more to see if I can alleviate the tingles! (Thanks to Mr. Contrarian, he spots EPS is up just 12%, saves me time looking later).

Telit Communications (TCM) – 162.4p – £212.2m – PER 27.0

Interim Results For The 6 Months To End June 2018 – Always suspicious when the RNS contains a PR headline “Interim results – turnaround plan on course”.  Revenue up 13.6% to $201.7m (back to double digit growth they say) but Profit is down slightly.

I’m not convinced, this remains on my Avoid list.

McColl’s Retail (MCLS) – 143.25p – £165.0m – PER 8.83

2018 Q3 Trading Update – LFL Revenue down -0.9% but total Revenue is up 12.0% YTD (the integration of the 298 stores acquired in 2017 annualised during the quarter).

This seems to be in-line with expectations but with no mention of Profit anywhere I see no reason to change from a Neutral stance here at present.

Severfield (SFR) – 76p – £231.0m – PER 11.0

AGM Trading Update – In-line. UK Order book at £210m, in September (£237m in June) in-line with normal levels (8 – 10 months of Annual Revenue). In India it’s up to £128m (from £106m) and capacity is being increased.

There’s still a lot to like here and although it still looks slightly under-priced I am going to take this from my Watchlist for now and go Neutral.

Michelmersh Brick Holdings (MBH) – 86.5p – £74.7m – PER 10.5

Interim Results For The 6 Months To End June 2018 – Wow! Revenue up 43%, Underlying PBT up 57%, Underlying EPS up 60% and the Interim Dividend is up 51%. Confident of meeting FY expectations.

Looks really good and am tempted to take a position here. If I do not it will go on the Watchlist.

As always, all comment most welcome!

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