German industrial bellwether BASF first warning re Q2 outlook:
(Dow Jones) -- BASF cut its guidance for the year, citing geopolitical uncertainty and U.S. tariff tensions causing currency volatility.
The German chemical giant now expects earnings to be weaker than expected, with earnings before interest, taxes, depreciation and amortization before special items to reach between 7.3 billion euros and 7.7 billion euros ($8.54 billion and $9.01 billion). This compares with a prior forecast of between 8.0 billion euros to 8.4 billion euros.
It still anticipates free cash flow of between 400 million euros and 800 million euros in 2025.
BASF also reported preliminary results for the second quarter, with a 2.1% decline in sales to 15.77 billion euros from 16.11 billion euros for the same period a year earlier. This reflects negative currency effects in all segments and lower prices, mainly in the chemicals segment, it said. Analysts had expected sales of 15.80 billion euros on average for the second quarter, the company added, citing Vara Research.
Now I know Paul doesn't like people announcing their trades but I just sold EVPL, I do really like the company but I'm up +71% and I think it may lose momentum soon, I know they rely on their past catalogue a lot but I think AI is going to be a massive disruptor in this sector.
I always seem to hold these things going up and back down again so I'm trying to break a habit.
So if you had some money in your ISA, burning a hole in your pocket what would be your current favourite bargain in the small cap space?
IMO the next big crash will involve blockchain. All these companies buying Bitcoin to add to treasury will drive the price of $BTC up (which they depend on to convince more people to invest). However, they are going to collapse (who knows what the trigger will be). When enough collapse they’ll bring down the Brice off $BTC and this will cause more to collapse and so on until the biggest ones get into trouble. Giant pyramid IMO.
Rockwood Strategic has been strong lately, up 11% over the past month. Good going for a UK small cap fund with around 24 holdings. Up 200% over 5 years and I think there's lots of potential here, while the fund is still relatively small.
Rockwood gave a good presentation at MELLO 2025, citing and discussing the following major holdings (followed by respective Stockopedia rating and Paul's colour ranking of each, at the time)
RM.L 52 RM plc amber
TRI.L 77 Trifast amber-green
VANL.L 70 Van Elle Holdings black-green
CSC.L 18 Chesterfield Special Cylinders amber-green
Live & exclusively for the 1st time ever at 9.30am Monday (ie 14th July) on VOX Markets, I have the pleasure of discussing all things UK small/midcap stocks with UK fund manager Nick Hawthorn of Downing.
It's sure to be a fascinating chat, alongside trying to answer any of your questions.
On a quiet day may I ask whether buy-backs are a good thing for shareholders? Why not just pay a special divi? If held in Treasury rather than cancelled they provide a fund for a reward allocation to Directors for improved EPS which the buy-backs should achieve. In other words buy-backs principally benefit Directors.
I didn't notice anything new or surprising in this https://moneyweek.com/investments/investment-trusts/investment-trust-share-buybacks but I think it's relevant, with a discount to NAV being a plus point for buybacks for many investment trusts. There are other considerations but I don't want to go through all of Patrick mylne's points (and I wouldn't be the best person to do it). Property is highlighted as the sector where discounts have narrowed the most (partly because of big discounts to start with?).
Off topic, yesterday I noticed AEW UK REIT plc (AEWU) was trading at a premium to NAV, though a very small one. Today Hargreaves Lansdown shows a discount of 0.06%, but the prices (Sell:109.20p Buy:109.80p) are above: "Estimated NAV: 108.47p Latest actual NAV: 108.26p". Not that it matters, as the differences are small. Anyway the current discount status could be partly because of a Simon Thompson tip in Investors Chronicle last week, but AEWU had a relatively small discount to begin with. I believe AEWU's buybacks have been quite small compared to their dividend.
Well said. As a holder of Vistry (VTY) I was particularly irritated by their purchase of between 57,000 and 220,00 shares daily as the price progressed from 900p to the 4 year high at 1400p, only to destroy any added value when they announced the accounting issues in their southern division.
Is it beyond these supposed experts and their teams to set more balanced parameters for their buybacks? Surely a model based on pound cost averaging would be a better approach? ie £200k of purchases, rather than 100,000 shares each day as their price rises 50%.
Have I mis-understood in thinking that in many cases these buy backs were sold to investors as a way to use cash (or even lower cost debt) to buy shares which are considered under valued?
A combination of restricting buy backs to a daily cash value and not buying when the price is above the 200 day moving average (or at least the 50dma) would help prevent paying excessive costs for these buy backs.
Hopefully, AI and other tools will help investors DYOR in identifying and marking down companies where management have skewed incentives so that buy backs will favour indiscriminate buy backs. This would probably start with identifying low thresholds, including nil or minimal cost share incentives.
Are there any existing screens which flag up excessive share compensation? If not, it is something for the teams at Stocko and Sharepad to consider.
Add: It's my money invested in the company which is rewarding management. The least they can do is pay 1/3 to 1/2 as a special dividend if they don't want to rebase dividends; after all, profits are absolute as well as relative so cash distributions make up my total return.
Hi JAS this is such a controversial topic with so many contending parameters that generated hundreds of posts (some getting quite feisty) over on stocko.
I think you will get such a range of answers as to not help you reach a conclusion… just a heads up of my experience
My thoughts are it’s ok with lots of options when it shouldn’t be used I.e.
To give the purchased shares to staff as reward
If staff bonuses are linked to SP
If the company is overpriced. M for me there must be a deep discount to SP for this to make share owner benefit
If the business can’t afford it
If the business is in debt(a few caveats to this)
There are others and times when it does make sense especially in conjunction with a special div
But I would not be happy with the situation you painted above, as a retail shareholder I don’t see we have any options other than to sell the shares or live with that behaviour if the company is performing well
I've got a story about bad buybacks. Years ago the US pharma company Gilead Sciences had a cure for a kind of liver disease, and the cash was rolling in. The cash went on buybacks, big buybacks, and the stock price kept going down. The main problem was, people who are cured don't need to buy any more pills. Probably everyone saw that, but the rate of decline was faster and started sooner than many under-informed investors expected, including myself. There was also resistance to paying a huge price per pill for a 6-pill cure. When the waste of shareholders' funds was obvious, the CEO got replaced, and the new CEO very quickly got rid of the CFO. The share price is still a little under the peak in 2015.
I think this also shows a massive flaw in the pharmaceutical industry - do they really ever want to find a cure, or rather manage disease? - the incentive is all wrong isn't it.
I have searched analyst reports, trade movements (none worthy of mention but mainly buys), no directors share buys or sells, no Institution movements (we would only know the next day!!) ,no RNS but it this to do with abandonment of zonal pricing? I am not so convinced as the overall benefit to the energy companies would be neutral. I don't have any data to support that other than comments made by an energy broker I know well.
This does seem strange as Panmure mentions back in June that the energy companies (Yu was mentioned) would be a beneficiary of the government spending plans.
Is this a Market Makers pushing down the price knowing there is something on the horizon?
The price can be quite volatile, so I took a look at the daily chart in Sharescope and it indicates that yesterday's price range was between 1600 and 1620. I saw the value spiked in the closing valuation yesterday, so expect it was just one of those rogue price spikes, rather than profit taking, as the graph shows a rise, even though 7.75% fall reported.
YU. is not "down" this morning. In fact it is trading ever so slightly higher than yesterday afternoon BUT there was an Uncrossing Trade at 1745 which was much higher than the last trade in market hours at 1595. So the opening price this morning is just correcting this.
The next AUM update will be pivotal for Premier Miton.
If they can’t bring in more client money than goes out the door now, on the back of such buoyant UK markets, then we have to assume the money has gone to index funds/self investment and is never coming back.
Valued on that basis, the price is looking about fair atm.
I think there are lot of people still sitting in cash while rates are high so might need rates to come down before we see significant inflows. They are also a retail focused manager and it can take a while for sentiment to shift, so I certainly wouldn't expect a significant pick up in flows anytime soon - could easily take another couple of years in my view.
https://www.theguardian.com/money/2025/jul/10/uk-government-abandons-energy-zonal-pricing-plan (yesterday). You can read it for free if you agree to all cookies. Zonal pricing would have meant cheaper energy in Scotland and more expensive energy in the South East of England. Octopus Energy was in favour of zonal pricing, while some big renewable energy companies opposed it. I'm not seeing any noticeable reaction in the share price of NextEnergy Solar Fund Ltd (NESF) or Foresight Solar Fund Ltd (FSFL). Maybe it's not a big deal, or the market expected the announcement about zonal pricing, or I checked the wrong two stocks. I'd be interested to hear if anyone thinks this is significant for renewable energy stocks, and not priced in.
Hi all, please can I ask for a recommendation for a good, free website to track the trading volume for individual UK shares? It's obviously not uncommon for small caps to move mid-single digits in a day on no news, though I'm quite keen to try and spot when it's caused by very slow retailer selling on minimal volume vs bigger sales going through. Thanks!
The free yahoo UK finance app is good for the reason that it gives a 3 month average daily volume as well- so you can compare the current volume with the average.
Johnson Service Group plc (JSG) - Trading Update yesterday, "Jon/Paul cautious update, but remains good value" GREEN. 72% of JSG's revenue is from hospitality (based on what they expect for the six months to 30 June 2025), specifically HORECA (hotels, recreation and cafes/canteens). "Whilst HORECA experienced a slower than anticipated start to the summer months, reflecting the current challenges in the wider hospitality market, we have started to see a slight improvement in volumes in the last two weeks, but are mindful that future consumer discretionary spend remains unpredictable.". I think the main risk with JSG is the dependence on hospitality. I've speculated previously that hospitality could be more fickle than other discretionary spending, like hobbies and travel. Maybe if people were seriously short of funds, they'd choose holidays here instead of abroad, but I'm not sure they'd save much, especially with the rises in National Insurance, National Minimum Wage and National Living Wage. JSG's Workwear volumes have been stable, and some of the HORECA revenue will be from Ireland.
ASLI - Hat tip and thanks to Was for doing that bonus article - its a trade that’s worked out very nicely so far - appreciate the work that went into that on our behalf!
NAV at 72p now looks distinctly light given the 10% premium made on recent sales. If we include income over the next 6 months then feels like we should get between 76 & 79p in total. Probably take another 8 or 9 months to achieve that but even here at 64p a lower risk 20% return (25% annualised) remains on offer.
Is it likely that the assets already sold were easier to sell or better in some way than the assets remaining, so the 10% premium made on recent sales isn't a good indicator of what they'll get for what's left? I don't know, I just thought it was worth raising the point.
No - most of the other assets are in final stages of sales. They are all pretty attractive assets. The premium is really because European interest rates have gone down and real estate yields have gone up.
I’ve pencilled in that NAV is probably 5% up rather than 10% which I think is pretty conservative. That would put NAV + income at maybe 77p (76p after wind down costs). But it could be 10% or more.
BOWL: Met Office weather into August- “Longer drier spells are more likely towards the south and east, although even here some showers are probable at times. Temperatures are likely to remain above average, especially in the south and east where further spells of very warm or hot weather remain possible.”
Sold out today at breakeven on the basis that SE England is where Bowl make their money and prolonged good weather is unfavourable for a wet-weather activity.
No - it’s not normal Jac but it is modus operandi for MSI for all the time they’ve been listed (and that’s many a year).
Management dont do broker coverage or forecasts, they don’t engage with shareholders other than at the AGM and rarely answer questions. Their commentary is typically conservative - I’ve seen 3 or 4 statements interpreted by market commentators as profit warnings that prove not to be when the interims or finals come out. They don’t tend to do RNS on contract wins either - it has to be really material for them to announce it. So silence between reports is neither good or bad. Essentially you have to form your own view and forecasts, made harder given the conglomerate nature of the business which I am sure puts some investors off. I don’t mind it too much. You need to pay attention to the subtle changes in tone in the chairman’s statement in my experience.
I think it is Illiswig (Mark) that knows the company very well and has done some tremendous analysis available on Substack that will give you a really good view. My own calculations are a bit rougher but I’ve only been out by a positive/negative variance of less than 10% in the last few results so I’m comfortable with that.
FWIW the final results weren’t taken overly well and I think Paul S even talks about it as a profit warning. I disagree - the slightly downbeat language used about impact on order and delivery timing for the upcoming year was consistent with that used earlier in the year when EPS went up to 90p from 70p - a 28% growth rate! It would not surprise me if EPS went up again this year - but management are pointing to what I would consider some dramatic upgrades over the next 2 or 3 years. We just wont find out until they actually happen ofc!! But on a PER of 11 with net cash of some £2 or so this just feels like the wrong price, especially if you consider other defence peers trade on 20* so I’m not in a hurry to exit.
thanks David, very helpful. It makes me ponder why the company is even listed, given cost of listing must be circa £500k to £1m per annum? Does MSI need the hassle of being a listed PLC for trade/customer visibility or fund raising reasons(when was the last time MSI raised funds for eg?)
I remember this question being asked about a few companies over the years. From memory, a couple of them said that having a listing reassured customers and that it helped secure sales.
I guess such companies consider it a 'marketing/advertising' expenditure, if so £1m -£2m cost of listing pa does not sound so much perhaps.
However, I still find it a tat strange that at the very least, the co broker and NOMAD, Shore Cap does not provide coverage/recommendations on the stock unless MSI have expressly asked the co. not to ?
German industrial bellwether BASF first warning re Q2 outlook:
(Dow Jones) -- BASF cut its guidance for the year, citing geopolitical uncertainty and U.S. tariff tensions causing currency volatility.
The German chemical giant now expects earnings to be weaker than expected, with earnings before interest, taxes, depreciation and amortization before special items to reach between 7.3 billion euros and 7.7 billion euros ($8.54 billion and $9.01 billion). This compares with a prior forecast of between 8.0 billion euros to 8.4 billion euros.
It still anticipates free cash flow of between 400 million euros and 800 million euros in 2025.
BASF also reported preliminary results for the second quarter, with a 2.1% decline in sales to 15.77 billion euros from 16.11 billion euros for the same period a year earlier. This reflects negative currency effects in all segments and lower prices, mainly in the chemicals segment, it said. Analysts had expected sales of 15.80 billion euros on average for the second quarter, the company added, citing Vara Research.
Now I know Paul doesn't like people announcing their trades but I just sold EVPL, I do really like the company but I'm up +71% and I think it may lose momentum soon, I know they rely on their past catalogue a lot but I think AI is going to be a massive disruptor in this sector.
I always seem to hold these things going up and back down again so I'm trying to break a habit.
So if you had some money in your ISA, burning a hole in your pocket what would be your current favourite bargain in the small cap space?
I can go do some research over the weekend.
Paul,
Only posting this to assure you that every word you write is read, even on a hot Friday afternoon.
What do most people shout out when they are on a rollercoaster? Weeee. So French for yes is Oui.
Have a good weekend.
Ah yes of course, I was being thick, not getting the Ai rollercoaster joke!!! Thx for clearing my brain fog :-)
or AAAAAAAARGH!, depending on the person and the rollercoaster.
IMO the next big crash will involve blockchain. All these companies buying Bitcoin to add to treasury will drive the price of $BTC up (which they depend on to convince more people to invest). However, they are going to collapse (who knows what the trigger will be). When enough collapse they’ll bring down the Brice off $BTC and this will cause more to collapse and so on until the biggest ones get into trouble. Giant pyramid IMO.
Rockwood Strategic has been strong lately, up 11% over the past month. Good going for a UK small cap fund with around 24 holdings. Up 200% over 5 years and I think there's lots of potential here, while the fund is still relatively small.
Rockwood gave a good presentation at MELLO 2025, citing and discussing the following major holdings (followed by respective Stockopedia rating and Paul's colour ranking of each, at the time)
RM.L 52 RM plc amber
TRI.L 77 Trifast amber-green
VANL.L 70 Van Elle Holdings black-green
CSC.L 18 Chesterfield Special Cylinders amber-green
CAU.L 58 Centaur Media amber
FLO.L 30 Flowtech Fluidpower amber
TON.L 59 Titon Holdings plc no ranking
Live & exclusively for the 1st time ever at 9.30am Monday (ie 14th July) on VOX Markets, I have the pleasure of discussing all things UK small/midcap stocks with UK fund manager Nick Hawthorn of Downing.
It's sure to be a fascinating chat, alongside trying to answer any of your questions.
Everyone is welcome.
https://www.youtube.com/watch?v=tCrjsidWbIM
On a quiet day may I ask whether buy-backs are a good thing for shareholders? Why not just pay a special divi? If held in Treasury rather than cancelled they provide a fund for a reward allocation to Directors for improved EPS which the buy-backs should achieve. In other words buy-backs principally benefit Directors.
I didn't notice anything new or surprising in this https://moneyweek.com/investments/investment-trusts/investment-trust-share-buybacks but I think it's relevant, with a discount to NAV being a plus point for buybacks for many investment trusts. There are other considerations but I don't want to go through all of Patrick mylne's points (and I wouldn't be the best person to do it). Property is highlighted as the sector where discounts have narrowed the most (partly because of big discounts to start with?).
Off topic, yesterday I noticed AEW UK REIT plc (AEWU) was trading at a premium to NAV, though a very small one. Today Hargreaves Lansdown shows a discount of 0.06%, but the prices (Sell:109.20p Buy:109.80p) are above: "Estimated NAV: 108.47p Latest actual NAV: 108.26p". Not that it matters, as the differences are small. Anyway the current discount status could be partly because of a Simon Thompson tip in Investors Chronicle last week, but AEWU had a relatively small discount to begin with. I believe AEWU's buybacks have been quite small compared to their dividend.
Well said. As a holder of Vistry (VTY) I was particularly irritated by their purchase of between 57,000 and 220,00 shares daily as the price progressed from 900p to the 4 year high at 1400p, only to destroy any added value when they announced the accounting issues in their southern division.
Is it beyond these supposed experts and their teams to set more balanced parameters for their buybacks? Surely a model based on pound cost averaging would be a better approach? ie £200k of purchases, rather than 100,000 shares each day as their price rises 50%.
Have I mis-understood in thinking that in many cases these buy backs were sold to investors as a way to use cash (or even lower cost debt) to buy shares which are considered under valued?
A combination of restricting buy backs to a daily cash value and not buying when the price is above the 200 day moving average (or at least the 50dma) would help prevent paying excessive costs for these buy backs.
Hopefully, AI and other tools will help investors DYOR in identifying and marking down companies where management have skewed incentives so that buy backs will favour indiscriminate buy backs. This would probably start with identifying low thresholds, including nil or minimal cost share incentives.
Are there any existing screens which flag up excessive share compensation? If not, it is something for the teams at Stocko and Sharepad to consider.
Add: It's my money invested in the company which is rewarding management. The least they can do is pay 1/3 to 1/2 as a special dividend if they don't want to rebase dividends; after all, profits are absolute as well as relative so cash distributions make up my total return.
Hi JAS this is such a controversial topic with so many contending parameters that generated hundreds of posts (some getting quite feisty) over on stocko.
I think you will get such a range of answers as to not help you reach a conclusion… just a heads up of my experience
My thoughts are it’s ok with lots of options when it shouldn’t be used I.e.
To give the purchased shares to staff as reward
If staff bonuses are linked to SP
If the company is overpriced. M for me there must be a deep discount to SP for this to make share owner benefit
If the business can’t afford it
If the business is in debt(a few caveats to this)
There are others and times when it does make sense especially in conjunction with a special div
But I would not be happy with the situation you painted above, as a retail shareholder I don’t see we have any options other than to sell the shares or live with that behaviour if the company is performing well
Hope that helps
I agree with all that. There's an article here https://acquirersmultiple.com/2025/02/warren-buffett-the-simple-math-of-share-repurchases/ about what Warren Buffett said about buybacks.
I've got a story about bad buybacks. Years ago the US pharma company Gilead Sciences had a cure for a kind of liver disease, and the cash was rolling in. The cash went on buybacks, big buybacks, and the stock price kept going down. The main problem was, people who are cured don't need to buy any more pills. Probably everyone saw that, but the rate of decline was faster and started sooner than many under-informed investors expected, including myself. There was also resistance to paying a huge price per pill for a 6-pill cure. When the waste of shareholders' funds was obvious, the CEO got replaced, and the new CEO very quickly got rid of the CFO. The share price is still a little under the peak in 2015.
I think this also shows a massive flaw in the pharmaceutical industry - do they really ever want to find a cure, or rather manage disease? - the incentive is all wrong isn't it.
True, and it seems like everyone wants recurring revenue these days.
I only like buy backs when they reduce the share count and not as disguised remuneration.
YU. SP has dropped 7-6% this morning.
I have searched analyst reports, trade movements (none worthy of mention but mainly buys), no directors share buys or sells, no Institution movements (we would only know the next day!!) ,no RNS but it this to do with abandonment of zonal pricing? I am not so convinced as the overall benefit to the energy companies would be neutral. I don't have any data to support that other than comments made by an energy broker I know well.
This does seem strange as Panmure mentions back in June that the energy companies (Yu was mentioned) would be a beneficiary of the government spending plans.
Is this a Market Makers pushing down the price knowing there is something on the horizon?
Could it be that that the price is somewhat more volatile because it is relatively illiquid and sales/purchases disproportionally affect price?
You are probably over thinking this (I hold).
The price can be quite volatile, so I took a look at the daily chart in Sharescope and it indicates that yesterday's price range was between 1600 and 1620. I saw the value spiked in the closing valuation yesterday, so expect it was just one of those rogue price spikes, rather than profit taking, as the graph shows a rise, even though 7.75% fall reported.
YU. is not "down" this morning. In fact it is trading ever so slightly higher than yesterday afternoon BUT there was an Uncrossing Trade at 1745 which was much higher than the last trade in market hours at 1595. So the opening price this morning is just correcting this.
HTH
The next AUM update will be pivotal for Premier Miton.
If they can’t bring in more client money than goes out the door now, on the back of such buoyant UK markets, then we have to assume the money has gone to index funds/self investment and is never coming back.
Valued on that basis, the price is looking about fair atm.
I think there are lot of people still sitting in cash while rates are high so might need rates to come down before we see significant inflows. They are also a retail focused manager and it can take a while for sentiment to shift, so I certainly wouldn't expect a significant pick up in flows anytime soon - could easily take another couple of years in my view.
https://www.theguardian.com/money/2025/jul/10/uk-government-abandons-energy-zonal-pricing-plan (yesterday). You can read it for free if you agree to all cookies. Zonal pricing would have meant cheaper energy in Scotland and more expensive energy in the South East of England. Octopus Energy was in favour of zonal pricing, while some big renewable energy companies opposed it. I'm not seeing any noticeable reaction in the share price of NextEnergy Solar Fund Ltd (NESF) or Foresight Solar Fund Ltd (FSFL). Maybe it's not a big deal, or the market expected the announcement about zonal pricing, or I checked the wrong two stocks. I'd be interested to hear if anyone thinks this is significant for renewable energy stocks, and not priced in.
Hi all, please can I ask for a recommendation for a good, free website to track the trading volume for individual UK shares? It's obviously not uncommon for small caps to move mid-single digits in a day on no news, though I'm quite keen to try and spot when it's caused by very slow retailer selling on minimal volume vs bigger sales going through. Thanks!
The free yahoo UK finance app is good for the reason that it gives a 3 month average daily volume as well- so you can compare the current volume with the average.
ADVFN is also a good option. Just type in the ticker and select "Trades". You just need to create a free account.
Jimbo, free share volumes on all shares from London Stock Exchange.
Thanks both.
Case in point, CAV is down c.7.5% today due to, from what I can tell, minuscule volume and a few retail sales.
Johnson Service Group plc (JSG) - Trading Update yesterday, "Jon/Paul cautious update, but remains good value" GREEN. 72% of JSG's revenue is from hospitality (based on what they expect for the six months to 30 June 2025), specifically HORECA (hotels, recreation and cafes/canteens). "Whilst HORECA experienced a slower than anticipated start to the summer months, reflecting the current challenges in the wider hospitality market, we have started to see a slight improvement in volumes in the last two weeks, but are mindful that future consumer discretionary spend remains unpredictable.". I think the main risk with JSG is the dependence on hospitality. I've speculated previously that hospitality could be more fickle than other discretionary spending, like hobbies and travel. Maybe if people were seriously short of funds, they'd choose holidays here instead of abroad, but I'm not sure they'd save much, especially with the rises in National Insurance, National Minimum Wage and National Living Wage. JSG's Workwear volumes have been stable, and some of the HORECA revenue will be from Ireland.
Accesso chart is firmly looking like the Big Dipper roller-coaster itself!
ASLI - Hat tip and thanks to Was for doing that bonus article - its a trade that’s worked out very nicely so far - appreciate the work that went into that on our behalf!
NAV at 72p now looks distinctly light given the 10% premium made on recent sales. If we include income over the next 6 months then feels like we should get between 76 & 79p in total. Probably take another 8 or 9 months to achieve that but even here at 64p a lower risk 20% return (25% annualised) remains on offer.
Is it likely that the assets already sold were easier to sell or better in some way than the assets remaining, so the 10% premium made on recent sales isn't a good indicator of what they'll get for what's left? I don't know, I just thought it was worth raising the point.
I'd be wary employing Hoenir as my accountant. No place to hide!
Hoenir is an excellent proof reader though! He spots small typos that elude me :-)
No - most of the other assets are in final stages of sales. They are all pretty attractive assets. The premium is really because European interest rates have gone down and real estate yields have gone up.
I’ve pencilled in that NAV is probably 5% up rather than 10% which I think is pretty conservative. That would put NAV + income at maybe 77p (76p after wind down costs). But it could be 10% or more.
Thanks David!
MSI - is there a reason why there is no broker coverage even by its company brokers/NOMAD Shore Capital - is that normal ?
BOWL: Met Office weather into August- “Longer drier spells are more likely towards the south and east, although even here some showers are probable at times. Temperatures are likely to remain above average, especially in the south and east where further spells of very warm or hot weather remain possible.”
Sold out today at breakeven on the basis that SE England is where Bowl make their money and prolonged good weather is unfavourable for a wet-weather activity.
They don’t want a higher share price.
No - it’s not normal Jac but it is modus operandi for MSI for all the time they’ve been listed (and that’s many a year).
Management dont do broker coverage or forecasts, they don’t engage with shareholders other than at the AGM and rarely answer questions. Their commentary is typically conservative - I’ve seen 3 or 4 statements interpreted by market commentators as profit warnings that prove not to be when the interims or finals come out. They don’t tend to do RNS on contract wins either - it has to be really material for them to announce it. So silence between reports is neither good or bad. Essentially you have to form your own view and forecasts, made harder given the conglomerate nature of the business which I am sure puts some investors off. I don’t mind it too much. You need to pay attention to the subtle changes in tone in the chairman’s statement in my experience.
I think it is Illiswig (Mark) that knows the company very well and has done some tremendous analysis available on Substack that will give you a really good view. My own calculations are a bit rougher but I’ve only been out by a positive/negative variance of less than 10% in the last few results so I’m comfortable with that.
FWIW the final results weren’t taken overly well and I think Paul S even talks about it as a profit warning. I disagree - the slightly downbeat language used about impact on order and delivery timing for the upcoming year was consistent with that used earlier in the year when EPS went up to 90p from 70p - a 28% growth rate! It would not surprise me if EPS went up again this year - but management are pointing to what I would consider some dramatic upgrades over the next 2 or 3 years. We just wont find out until they actually happen ofc!! But on a PER of 11 with net cash of some £2 or so this just feels like the wrong price, especially if you consider other defence peers trade on 20* so I’m not in a hurry to exit.
thanks David, very helpful. It makes me ponder why the company is even listed, given cost of listing must be circa £500k to £1m per annum? Does MSI need the hassle of being a listed PLC for trade/customer visibility or fund raising reasons(when was the last time MSI raised funds for eg?)
I remember this question being asked about a few companies over the years. From memory, a couple of them said that having a listing reassured customers and that it helped secure sales.
Happy to be corrected
I guess such companies consider it a 'marketing/advertising' expenditure, if so £1m -£2m cost of listing pa does not sound so much perhaps.
However, I still find it a tat strange that at the very least, the co broker and NOMAD, Shore Cap does not provide coverage/recommendations on the stock unless MSI have expressly asked the co. not to ?
ACSO Oh dear things are not all rosy in the world of theme parks fast passes
Revenue to be at lower end of expectations & negotiations continue with largest customer (6 Flags?) on renewal
I’m holding a few so may be heading for the exit pronto once the park/market opens
Have you bought a place at the head of the (exit) queue?!