...after the excitement at the end of last week with PLUS500. Today we have had a couple of trading updates from Cineworld (CINE) and Micro focus (MCRO).
Cineworld saw pretty good growth across the board in both the UK and emerging markets in which it operates. They also opened a few new cinemas with lots of screens in the UK and overseas with 16 planned for the rest of the year split evenly between the UK and overseas. This together with what looks like a more attractive film schedule for this year means they are probably well set to deliver decent growth again. However, the rating anticipates this to a certain extent with the shares standing on over 18x with a sub 3% yield and an earnings yield of less than 5%. So overall not cheap, but looks like it should continue to grow well against an improving consumer background so I guess it could continue to show some good price momentum despite the rating. However having been bored by the Marvel Avengers Assemble film on TV last night I still remain somewhat bemused by the attraction of all these comic book films but each to their own.
On Micro focus today we have had a new piece of management speak. In the past I have pointed to managements saying they are trading "broadly in line" which is code for slightly behind. In today's statement they say: "At the Interim results presentation in December 2014, management provided guidance of combined pro-forma full year* revenues of c. $1,330 million and combined pro-forma full year* Underlying Adjusted EBITDA** of c. $500 million, based on the exchange rates then prevailing. The Board is pleased to reconfirm that the Group expects to report revenues and Underlying Adjusted EBITDA comfortably in line with this guidance on a constant currency basis."
So I take "comfortably in line" to mean were confident of meeting or slightly beating expectations but don't want to upgrade them at the moment. On this basis I assume the forecasts will be fine but with scope for upgrades especially if the integration of last years acquisition goes better than expected as is sometimes the case. They may need this as these are also looking more fully valued now on around 16.5x with a 2.5% yield and an earnings yield of close to 3% so probably a hold up here. Hmm comfortably in line - puts me in mind of a song appropriate for post bank holiday blues...