A quick note today to catch up on what was out yesterday and today's news. Stocks which featured that I have covered in the past included Micro Focus (MCRO), Photo Me (PHTM),
S & U (SUS) and Sprue Aegis (SPRP). While today we have had announcements from Bellway (BWY) and Polar Capital (POLR)..
Micro Focus - announced interim results which saw the impact of last years large and transformative acquisition. These seemed to come up to their expectations and they tightened the range for their revenue guidance by 2% at the lower end and they increased the dividend by 10% despite the debt taken on with the deal. The market seemed to like it an chased the shares over 10% higher on the day to break significantly above their previous highs. This has however left them looking overbought in the short term but certainly means they have strong momentum, if not so much value as they now trade on 17x with a 2.3% yield for this year. They do however still score a reasonable 76 on the latest Compound Income Scores (CIS) which are out today driven largely by the dividend growth, operational quality scores and dividend cover scores.
Photo Me which briefly featured in the CIS Portfolio announced interim results which looked OK to me. It was encouraging to see some underlying turnover growth of 4%, pre currency effects, which is the first time for a while, as their newer photo booths and recently launched Revolution washing machines start to gain traction. The roll out of the washing machines seems to be on track and they are now also trialling some automated car washes with Karcher in France which was previously suggested as a new area for them. They also increased their dividend by 10% and saw their cash balances increase by £3.1m in the period to £67.8m (12% of the market cap.). They look a bit expensive on the basic PE of around 20x but the cash would knock a couple of points of this. While they do have a good EBIT/EV Yield of around 7.5% and a dividend yield of 6%+ with a special quite likely this year given the cash, unless they decide to roll out the car washes. As a result of these measures, the dividend growth and operational financial qualities it still scores 84 on the CIS.
S&U the specialist motor lender put out a short and confident sounding update in which they said that customer numbers were up by 28% and they regarded the future for S&U with great confidence - which is very bullish management speak. The shares have weakened a bit after the disposal of their home collected credit business and associated special dividend. As a result they look reasonable value again on around 14x with a 3.8% yield.
Meanwhile yesterday Sprue Aegis the fire alarm and smoke detector manufacturer which recently entered the CIS Portfolio also announced a brief update. This covered the fact that the transfer to a new manufacturing facility in China and the launch of their trade alarm were both on schedule.
Getting to today we had another positive AGM update from Bellway the house builder. In this they suggested that all their metrics like sales, prices, margins and ROCE were moving in the right direction and they highlighted the current strong market conditions and the longer term support from the latest measures on help to buy from the government. Thus this one which has been in the CIS Portfolio from the start in April this year seems likely to remain there at the December review as it still scores 99 on the CIS and continues to look cheap and trade well.
Finally against slightly cooler market conditions Polar Capital announced interims which were surprisingly flat despite the fall in AUM over the period due to market moves and continued outflows in their Japanese products. They only maintained the poorly covered dividend but it may yield 6.7% or so if it maintains it at the full year and it Scores 76 on the CIS. So it could be interesting if markets can turn around and they can stem their outflows, although larger groups like Jupiter and Schroders look better operationally and on the scores and as a result they are in the CIS portfolio instead of this one.
Cool that's me done for this week, have a great weekend whatever you are up to and here's to hoping Santa turns up early next week with a rally in his sack as this week has been pretty poor to say the least!