Probably because most are trying to get their announcements out before they head to the beach in August. Note to self must take most of August off because I can!
However before I do I note in passing an unsurprising profits warning from Merlin Entertainment (MERL) blamed on the after effects of the unfortunate accident at Alton Towers earlier this year. Not one I hold having stagged it when it floated and it looks richly valued to me with downgrades to come, not a great attraction for me.
Talking of richly valued I note that Reckitt Benkiser (RB) also announced H1 results in which they upgraded their guidance for the year which is welcome given they are on nearly 25x. They also cut their dividend as expected post the demerger of Indivor (INDV) & even factoring in the dividend from them shareholders if they still hold both will have seen a reduction in their overall dividend.
Of more interest to me as a holder was the half year report from XPP - which looked a little lack lustre at first glance. However they explain in the commentary that the fall in margins was due to start up costs for power converter manufacturing at their Vietnamese facility. They say more of their revenues (67.2%) is now coming from their own designs & within that ultra-high efficiency “Green XP Power” products now accounting for 21% up from 17%. They also acquired a 51% share in a Korean power converter company which brings them sales and engineering capability in an important manufacturing centre for industrial electronics.
The outlook commentary from the chairman was positive as it alluded to strong order book and backlog together with the developments above and a strong balance sheet giving him confidence that they should be able to continue to grow revenues in the second half of 2015 as designs won in 2014 and prior years enter their production phase. Thus with the earnings estimates having drifted back so far this year it seems they should be able to hit the modest 5% or so growth that is forecast. Perhaps as a sign of their confidence I note that they have increased the interim dividend by a useful 8% which is ahead of the current forecast of a 6% increase for the full year.
Therefore based on current forecasts the shares at around 1600p look like a fair value hold to me on around 15x with a 4% yield as they are nearer the top of their trading range over the last couple of years which has been between 1775p & 1300p. So I wouldn't suggest rushing out to buy them just now, but might be worth a look a bit lower down around 1500p and the 200 day moving average, if they should drift off again as they do sometimes. However I note it has a Compound Income Score of 94 and a Stockopedia StockRank of 94 too so it scores well according to The robots.
...because I consider it to be an expensive defensive. The stock concerned in Reckitt Benckiser who announced full year results today. Yes it is a good quality company with brands and high margins and return on capital as a result.
Their revenues were down in actual currencies to £8836m versus forecasts of £9200m to £9500m so a miss although the company did flag a 4% growth in constant currencies and they expect a similar rate of growth this year. This appears to be a slow down from the historic 8% trend.
In addition the adjusted eps figure of around 230 pence seems to be a big miss against the forecasts of anywhere between 245 pence and 260 pence, although I acknowledge that the picture was confused by the demerger of RBP. Tends to suggest that either their guidance wasn't very good or the analysts couldn't work out the effects of the demerger or it was a genuine disappointment, not sure which. The fact that analysts had on average forecast a dividend cut but they gave a 1% increase suggest perhaps the first two reasons? Even before this thought the estimate revisions were very negative.
So I am surprised to see the shares spiking up first thing above 5800 pence (+4% or so) on the back of these numbers, but maybe I'm missing something in all their polished presentation of the figures. I note also that they are still doing share buybacks and broadly neutralizes incentive plan share issuance (c. £300m p.a.) and intend to top this up with an additional up to £500m share buyback programme in 2015.
The balance sheet is fine with just £1.5 billion of debt versus the £40bn market cap. so I guess they could have fire power to do another deal, which is just as well as they seem to be running out of steam on their own having struggled to grow earnings since 2010 according to figures presented by Stockopedia. Thus with this background I can't get excited about this one on 22x and a 2.5% yield with an earnings yield of around 5 to 6% so it is not one that wows me up here and if I had it I'd say sell it bang - given the rating and the disappointing growth, but I can see others might want to hold it as a quality play.
Talking of ratings, check back tomorrow as I'm planning a post in response to some readers questions about rating ranges and sell disciplines so see you then.