GLEN ARNOLD INVESTMENTS
  • About
  • Newsletter
  • Books
    • My Books
    • Other Books
  • Blog
  • Portfolio
    • Buffett-style
    • Modified price earnings ratio
    • Net Current Asset Value
  • Resources
    • glossary of investment terms >
      • A - B
      • C
      • D - E
      • F - G
      • H - I - J - K
      • L - M - N
      • O - P
      • Q - R
      • S
      • T - U - V - W - Y - Z
    • TOP 10 TIPS FOR INVESTORS

Archive

NEWSLETTER 27 - THE 2014 UPDATE 25TH NOVEMBER 2014

26/7/2020

0 Comments

 
Northamber has a share price of 42.65p and a market capitalisation, MCap, of £12m.  Is it a 'buy' at these levels?
​

Picture
The latest annual report was published last week, and the headline numbers do not make for comfortable reading:
 
  • Turnover down 18.9% at £62.9m
  • A loss of over £1m, following a similar loss in 2013
  • Net asset value per share falling again, to 76.4p
  • Dividend per share at a miserly 0.6p
  • Gross margin 6.8%, down from 7.7%
  • Son of the founder in strategic role
 
But we need to dig deeper than that to get a picture of what is going on.
 
First let’s check on the balance sheet
​
Picture
NCAV is greater than the MCap (if we can trust the BS figures for inventory and receivables), with £5m in cash.  On top of that we have two highly marketable properties to take into account:
 
  • The headquarters offices in Chessington (23 Davis Street). This is in the books at £1.9m. However, it is located on the edge of a residential area and a planning application has been submitted to Kingston Council.  If you Google it you can see the design for 28 flats within the current building (20x1-beds, 6x2-beds and 2x 3-beds). I have heard that the building could be worth over £4m.  Quite sensibly, the managerial team are not committing themselves to this course of action, merely, “testing plot’s valuation” and starting the consultation with locals.
  • The warehouse in Weybridge. This was bought for £6.7m a couple of years ago. It has over 80,000 sq ft of warehousing, with more than 7,500 pallet bays and 13 loading bays.  With a diminished turnover Northamber only needs the use of one-half of this building.  The rest could be rented out.  Alternatively the building could be sold. I’m guessing here, but I think industrial property prices in the south of England are on the rise.
 
Thus the value of its property is about the same as the MCap, which means that the MCap is covered twice, once by net current assets and once by saleable property.
​

Tomorrow I'll check out the how trading is going
0 Comments



Leave a Reply.

    Archive

    I have been writting newsletters for almost 7 years now. Here you can find old newsletters in full. I have discussed previous investment decisions, basics of value investing and the strategies of legendary investors.

    Archives

    October 2020
    July 2020
    June 2020

    Categories

    All

    RSS Feed

In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long-run, the market is a weighing machine.  Benjamin Graham




  • About
  • Newsletter
  • Books
    • My Books
    • Other Books
  • Blog
  • Portfolio
    • Buffett-style
    • Modified price earnings ratio
    • Net Current Asset Value
  • Resources
    • glossary of investment terms >
      • A - B
      • C
      • D - E
      • F - G
      • H - I - J - K
      • L - M - N
      • O - P
      • Q - R
      • S
      • T - U - V - W - Y - Z
    • TOP 10 TIPS FOR INVESTORS