Quite a short statement as they updated back in May any way. It seems broadly in line with sales slightly better than forecast & the suggested Pre Tax Profit in line. So not a lot to get excited about in here although the dividend looks like it might be slightly better than forecast.
Given the rating has moved up to 17x or so and may go to over 20x if profits fall next year as suggested by the house broker then the fall in the shares this morning of about 4% is probably no great surprise.
Another post today as it is Thursday and there always seems to be a flood of announcements on a Thursday. This time full year results from Auto Trader Group (AUTO) another member of the CISP.
The numbers at the headline level seem to be slightly ahead of the consensus forecasts, while good cash flow generation saw their debt decline and the leverage ratio fall to 1.5x EBITDA which is acceptable. Aside from the debt that their previous VC owners landed them with it also means they have a threadbare balance sheet with negative NAV or shareholders funds in recent years. Despite this they have been able to return £148.4m to shareholders via share buy backs of £96.2m and dividends of £52.2m while the dividend this year was raised by 13.5% to 5.9p.
The outlook reads pretty positively highlighting the up selling to their commercial customers and the wide take up of their finance offering although this is tempered by the on going caution on the private listing side of things. Nevertheless they are flagging further rise in turnover and margins (which are already very high) and are confident of hitting their growth targets for the year which seems to suggest another year of double digit growth.
Thus the shares don't seem too fully valued on around 18x for the coming year especially when compared to other on line disrupters like Rightmove & Purplebricks. Indeed we saw Zoopla taken out recently, so I wouldn't be surprised if this one attracted a takeover at some point given their growth, profitability and market position. It still Scores well on the CIS so it remains in the portfolio for now.
Alliance Pharma (APH) - has today announced that Diclectin, a prescription treatment for nausea and vomiting of pregnancy has been given approvable status. This means that they should now be able to go ahead with marketing this in the UK & Europe as they had previously hoped. See their RNS for full details.
This should be good news ultimately and comes at a good time as to my mind the shares were starting to look a bit stretched in terms of their price and resultant valuation of 18 to 20x earnings and a sub 2% yield.
So it will be interesting to see how the share react to this and what, if any, updates we get to the effects of this on their earnings. I suspect this will only be beneficial for 2019 onwards as they have a December year end ans it is unlikely to be launched until the autumn and no doubt there will be up front costs associated with that.
Somewhat strangely, just two days after announcing their latest contract win, they now come out with a trading update. I guess maybe the figures weren't ready the other day but in any event it is an in line trading update, albeit that they say profits will be down in H1 due a change in phasing of orders from one of their major customers.
Consequently, give the order back log and the orders they have won recently they expect profits to recover and be second half weighted this year. I assume they have a reasonable handle on this, but it does leave the risk of a profits warning later in the year if things don't turn out as they expect. They also flagged software and recurring revenues now making up about 10% of sales and a change in their reporting currency to US$ to better illustrate the underlying growth.
Can't see too much to get excited about in this announcement so expect that should remain becalmed or maybe come off a bit. In another separate announcement though they say they have appointed Liberum as joint brokers so hopefully they may be able to provide some additional support or drum up some more interest in this one, perhaps.
Further to this months screening, as expected we have had final results from VP plc today. These appear to be slightly ahead of forecasts with revenues coming in at £303.6m versus forecasts of just less than £300m and basic eps pre amortisation at over 81.8p versus a consensus forecast of around 79p. the dividend was raised by 18% to 26p which was also slightly ahead of the forecast 25.3p or so.
Thus it looks like they made sure they could slightly exceed expectations and despite market uncertainties they say that they - "...look forward to the new financial year with confidence."
So they look fine on a prospective 10x PE with a 3% yield as another year of strong growth is forecast, but we'll have to wait and see if these results lead to any changes to forecasts which will feed through to the Score next month.
The shares having had a good run into the figures may pause for breathe as they are approaching the top of their recent trading range between 800p and 940p or so which may act as resistance. Given the valuation and the outlook however, I wouldn't be surprised to see them breaking out to the upside in due course if not today.
Mid morning update - the figures seem to have been well received and the shares are currently up by about 5% - so maybe breaking out already. I also saw a note from Equity Development where they upgraded their numbers to 95p with a 30.2p dividend which compares to 93.7p & 29.2p consensus. They also raised their price target to 1070p for what that's worth, although reinforces the breakout theory.