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Fletcher King (LSE:FLK) reported excellent half-year results a few days ago, including a significant boost to its net current asset value, NCAV. But I’m still not willing to pay much more for its shares than the limit set in early December. I originally bought into FK in August 2013 at a price of 30p. With the shares now at 60p (current market capitalisation is 9.2m shares x 60p = £5.5m) I have made a 110% return so far (plus a 1.5p dividend due in February).  The good news
This business of providing services to commercial property owners, mostly offices, has continued to perform well, with the central London market ‘remain[ing] very strong with demand rippling out from the centre’ and ‘other major cities seeing significant yield contraction as investors seek higher returns’. Apparently all FKs departments are ‘were very active’, from its valuation department to its rent collection and fund assistance departments. Turnover was £1.828m in the half year to 31 October, which is 36% up on the same period a year ago. Profit before tax is up an even more impressive percentage, 99%, at £293,000. Apparently the directors agree with the arguments I put forward at the AGM last month because they have doubled the interim dividend to 1.5p. This is the same as the whole-year dividend in 2013/14. Dividend yield is 2.9% based only on the interim, so we should expect at least double that when the final dividend for the year is included. Some not so good news With revenue up about £486k, employee benefits expense is up £232k. Thus the workers (mostly directors) continue to take the lion-share of the value generated (other costs were up only £71k). They are not anticipating a large rise in profits in the second half: ‘Our prospects…look satisfactory although last year[’s]… results would be difficult act to follow but we will use all our efforts to do so’. To put a lot of weight on the profit numbers improving further is to move from an investment type of decision to a greater element of speculation. We simply don’t know. Now let’s look at something we do know. The balance sheet £’000s Receivables 1,394 Cash 2,338 Payables -410 Tax -185 Other creditors -370 NCAV 2767 Plus ‘available for sale investments’ 875 Extended NCAV 3642 Less 20% of receivables, to be conservative -279 Conservative NCAV 3363 Per share 36.6p Note that the company continues to meet the qualitative criteria for a NCAV investment (see earlier Newsletter postings or The Financial Times Guide to Value Investing). To stay within the boundaries of investment, i.e. with a large margin of safety and without placing ‘value on hope’ that the operations will be increasingly profitable I’ll set a price limit of 36.6p. This is 39% below the current market price. I’ll be patient. What about the shares bought previously? I continue to hold the shares I’ve already picked up, because even at 60p they are within the range of being reasonable value, even if they are no longer bargain value. Also, it is important to have a rule on not selling after a run-up in order to avoid temporary psychological influences causing a failure to hold onto multi-baggers. A rule is also important to avoid losses through frequent transaction costs – money going to the ‘croupiers’ of the share-picking game in bid-offer spreads and fees, and money going to the tax authorities. I’ll sit it out until at least August 2016, unless something interesting happens before then (e.g. I feel that the share is well ahead of itself at a time when the commercial property market is headed for trouble, or there is a takeover bid).
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So far I have concentrated on net current asset value investing. This is one of the investment approaches I judged valuable after years spent as a professor of investing examining many alternatives.
Ben Graham’s performance record and his compelling logic combined with more recent academic proof confirms the superiority of this approach over many others. Regular readers of my newsletters should by now have a grasp of the process used to identify NCAV shares with potential to rise significantly. While I’ll continue trying to find shares this way in 2015, I feel it is time to move on to other investment approaches. The overall portfolio will benefit from using a variety of routes to find bargains. Technique-diversification can be as useful to the structuring of a portfolio as individual share diversification. Broadening our thinking in this way will reinforce knowledge about key principles of investing (as opposed to speculation). Maintaining friendships with the eminent dead Speaking of reinforcing knowledge: I also intend to introduce a new type of post soon. For my own benefit I need to keep reading the investment classics to light-up in my mind the true narrow investment path. I hope this will be useful for you too. Just as moral compass resetting is necessary for even the most knowledgeable and committed person of faith, through regular exposure to good guidance, so it is with investment (except that our motives are more pecuniary than moral, although I hope we can achieve both). We too need constant reminders of what we should be thinking about, just how narrow the path is, and how to stop us straying off it into speculation (or sin). With this in mind I’ll write short summaries of key points from the great books, many of which are old – it is always a good idea for investors to make friends with the eminent dead. It is remarkable how similar the past is to the present when it comes to investor obstacles and opportunities; and to the speculator's psychological response to pressure. Cognitive limitations, emotional interference and memory failure are always with us, it seems. The same mistakes are made time and again. Thus we can learn a great deal by focusing on the good ideas developed in the past. I’ll start by bring out the timeless principles espoused by father of value investing, Ben Graham using excerpts from the second edition of the Security Analysis published in 1940. I read it a couple of weeks ago and was amazed at how relevant it still is. The other investment approaches I’ll use in 2015 Strong economic franchise investing. This is an approach most skilfully used by Warren Buffett and Charlie Munger as they allocate capital for Berkshire Hathaway (a company with a MCap of under $20m in 1965 now worth $373,000m). This approach puts much less emphasis on the quantitative elements of Graham’s proven ‘facts’ displayed in the balance sheet and in the profit history, and much greater emphasis on the more fuzzy, but crucially important, qualitative factors, which are frequently future-focused. These include the strategic strength of the business. Does it operate in a business area with sustainably high rates of return on capital employed? What factors create that industry strength? Does the company possesses an extraordinary resource to allow superior ROCE within its industry? It also includes a consideration of the competence and integrity of the managers. Also the financials need to be sound. The price has to be right, leaving a margin of safety by being significantly below the estimated intrinsic value. The share is part of a low diversification portfolio – because such beauties do not come along regularly, and you do not want to move too far down the diminishing marginal attractiveness curve. And, you’ll want to hold a share with such sustainable characteristics for a long time as you follow the story of its dominant place in its industry, with high returns year after year. Low price-earnings ratio (cyclically-adjusted) These shares are priced on a low relative to the earnings per share taken as current share price divided by the average eps for the past seven years. But we do not stop there. The other hurdles are:
Return reversal First, take all those shares that have lost over 80% of market value over the past 5 years (an academic paper I wrote with Professor Rose Baker showed these shares, on average, go on to outperform the market in the following 5 years – measured over decades of such investing in UK shares). Second, apply Piotroski factors to filter out those less likely to recover (based on another academic paper). Third, select only those with a net tangible asset value greater than current market capitalisation to build in a safety net of tangible assets. Finally, examine for qualitative characteristics to the same level of rigour as NCAV investing. High growth companies at good prices Philip Fisher developed a very intense investment process that required a detailed knowledge of the firms in an industry. He selected only those with an extraordinary potential for earnings growth. This growth relies on there being an extraordinary team of dedicated individuals both running the company and inspiring innovation, often at the forefront of science. These are the world-beaters of tomorrow and are very difficult to identify. What is more, even if you can identify them, you can only buy if the share price gives good value. I don’t know that I’ll have the intellectual wherewithal and the time to pick these multi-baggers. But I’ll try, from time to time. This year is going to be fun – I look forward to it! A Happy New year to you all – thank you for joining our little band. After 3 months of newsletter writing it is time to review things. So far I have concentrated on net current asset value, NCAV, investing, with only one purchase fitting an alternative type of investing philosophy making an appearance: Dewhurst, a Buffett and Munger type share. So let’s look at how the NCAV portfolios are doing. There are now two. One for shares bought in 2013 and one for 2014. These are all the shares I bought for the NCAV portfolios (however I sometimes continued to buy more of these, often at higher prices than these initial prices). The 2013 NCAV portfolio  Despite losing money on Mallett, which was bought by Stanley Gibbons in November for £0.60 per share, I think we can regard the 2013 portfolio as a success. Do not expect me to produce returns at this sort of extraordinary level in future. If I can achieve a few percentage points more than the market over a year I’ll be more than happy. And, remember that I’m bound to have periods, often lengthy periods, when I underperform the market – that is the nature of the game we are in. The 2014 NCAV portfolio  Most of the apparent decline in the 2014 portfolio is simply bid-offer spread.
Note that I have entered Caledonian Trust into the 2014 NCAV portfolio despite not having writing a newsletter on it yet. This is because I bought some only two days ago. Next week I’ll explain my rationale. I must admit that I am somewhat disappointed to have found only four companies in 2014 that meet my strict criteria for inclusion in a NCAV portfolio. And this is not for the want of trying. For example, at the beginning of December I screened every share on the Official List and on AIM. I did the same exercise at the end of the month. However, in my searching I did find some which, though not qualifying yet, are worth putting onto a watch list to see if the deficit in one or more of the qualitative or quantitative factors can be made up over the next few months. I’ll write about these in future newsletters as I keep my eye on them. Note that just because I write about them does not mean they are ready for buying. Stick to the rules I will not lower my standards simply to get into something. It is better to be patient. And there is no harm in increasing stakes in old favourites if they still meet the criteria. As Mae West said: “too much of a good thing can be wonderful”. I do not have a clue on where the stock market as a whole is going. Nor do I have a clue where macroeconomic variables are going, despite (or perhaps because of!) holding a PhD in economics. I concentrate on individual companies and consider whether their intrinsic value is significantly greater than their current market price. Occasionally this results in not being able to find any companies with sufficient margin of safety. To some people this absence of buying appears to be commentary on market being too high. Perhaps the market is, perhaps it isn’t. I don’t know about the market. All I know is that sticking to the NCAV criteria means that bargains are currently difficult to find. They will be searched for, however - constantly. Hope for falling share prices in the near future, even for my existing companies – then I can pick up some more. I will also look for bargain shares using other investment approaches, which I’ll summarise in the next newsletter. I’ll be investing using these other approaches a lot more in 2015. The operating dangers, which merely reflect weaknesses in its strategic position, mean that Titon cannot be considered for the Warren Buffett style strong economic franchise portfolio. The only possibility is for inclusion in the NCAV portfolio. It would qualify (just) under the ‘reasonable good’ qualitative factors – the business is fairly good with proven managers who coped with very tough times, and it is stable.  But it does not qualify under the quantitative criteria. I would therefore only buy if the share price fell to 51.6p, a 23.2% fall from the current price. We must be disciplined and let this one pass if it does not get down to 51.6p.
We can let lots of balls go past us, waiting for one that is in the best strike-zone. We can stand at the plate quite a while, patient and disciplined, until we get a ball that we can hit out of the ballpark – we do not have to stretch. Even if a lot of work has gone into getting to this point do not be tempted to lunge at a ball outside of the sweet-spot. There will be plenty of good balls later. This will go on my watch list. However I will not be selling any of my holding. My reasoning for holding even though not buying were outlined in my final Fletcher King blog last month. I must have a rule to stop me selling multi-baggers too soon and to stop losses through transaction costs and taxes. At this price it has a speculative element, but that is quite small. Final note There is a suggestion from ‘Rainmaker’ on Titon’s ADVFN Bulletin Board that it might be taken over, possibly by Korean investors. I accept that this is possible, but with over 40% of the shares held by directors and other connected persons, I think the more likely scenario is a return to profitability outside of Korea by a combination of managerial endeavour and macroeconomic recovery. If anyone has further reasons for think that a takeover is more likely, please let us know. I’d like to be convinced. It is always healthy to be open to disconfirming evidence to a long-held view, and to drop much-loved ideas in the face newly revealed facts. Time to look at the balance sheet. I bought into Titon at 37.9p largely because its net current asset value was significantly more than its MCap and its qualitative indicators were OK. Let’s see if the rolling-in of profits has boosted the BS sufficiently, so that NCAV is still greater than MCap., even though the share price is now 67p. Here are the September 2014 numbers:
Market Capitalisation = 10.75m shares x 67p = £7.2m Inventory £3.479m Receivables £4.589m Cash £2.149m Payables -£3.732m Deferred tax -£0.162m Non-current liabilities -£0.020m Crude NCAV £6.303m Less non-controlling interest -£0.682m NCAV £5.621m However to build in a margin of safety we should not take at face value the inventory or receivables. I’ll knock 33% off inventory (£1.159m) and 20% off receivables (£0.918m). thus NCAV is reduced to £3.544m. But, I think that there is more BS value than this because the company owns over £2m of property in the UK, including a large factory in Haverhill, Suffolk (please tells us if you know more about this, e.g. has it been valued recently?). Thus we could add £2m to NCAV, to give us £5.544m, or 51.6p per share. Dangers And there are still considerable risks with this company:
Titon's Korean business has been doing great, but not is all lost in the UK, by any means. Korea appears to make almost 100% of the profits. But, it is not quite as simple as this. In the breakdown of revenues and expenses the UK unit has to absorb all of the annual spend on depreciation of fixed assets and amortisation of intangible assets. In 2014 this was £530,000. Actual expenditure on new fixed capital items was only £386,000. A case can be made for allocating a greater proportion of these expenses to Korea operations. Thus UK profit starts to look a bit more respectable - and that is before economic recovery takes hold in the UK.
(UK revenues account for 60% of turnover, with 19% of its UK factory’s output being exported). But they are a long way from acceptable returns on capital employed, even though there are glimmers of light: ‘the underlying trading performance in the UK has improved in the second half, where we have made a small profit after a number of months of making losses’ (2014 prelims). While there has been some growth in the UK market for replacement door and window handles, hinges, locking mechanisms and trickle vents, it is still ‘well down on pre-banking crisis levels’ (2014 prelims). They sell this hardware mostly by getting builders, architects, building services engineers and local authorities to specify a Titon product. Where specification is not possible they sell directly to electrical contractors, installers and window fabricators. A vital aspect of its business has been badly affected by tight government purse-strings on local authorities and housing associations. They tend to be the main customers for Titon’s mechanical house ventilation products. The mechanical ventilation heat recovery business has also been held back by the limited force of regulations to hyper-insulate houses and by the lowered demand from local authorities and housing associations. However, this business still has long-term potential. But, then, there are a lot of competitors. A closer look at the Korean business Compare this with the UK planning system: building approvals for new homes at a rate of over 500,000 per year. The Home County NIMBY would be apoplectic if that was the rate in the UK. Titon is finding that Korean builders are switching from mechanical ventilation, which it does not sell over there, to window ventilation, which it does sell. While the excellent profit numbers for Korea are built on simple passive ventilation products, there is a plan to sell other products from its large range in the future. However, there is a large negative – that dreaded word, competition: ‘In Korea we anticipate a slower rate of growth than we have seen in the last two years as there is more competition in the natural ventilation market’ (2014 prelims). Hmm, this is the main profit driver, at least until the UK gets off its backside. In tomorrow's newsletter I'll take a fresh look at the balance sheet and highlight some dangers. A couple of weeks ago Titon report stunningly good annual results (preliminaries) for the year ended 30th September. For a company with a MCap of £7.2m to report after-tax profits of £1.28m is great (revenues up 22% at £19.3m). Furthermore, there are good reasons to believe that this is not a one-off. The UK side of the business has still not recovered from the recession, and, more particularly, the government still restrict public sector house building, and so the company still only reports ‘a small profit’ for the UK.
It is the Korean business that is going great guns; with only 30% of Titon’s turnover it produces almost 100% of the profit. An accounting lesson However, this is only half the story. To really understand Titon you need to get into the accounting rules for ‘subsidiaries’ and ‘associates’ Hey you! wake up at the back of the class! Now begins our accounting lesson. Are you ready? (At least this is how I understand the company set-up, from the information I have available – if you know something else please tell us). In the beginning……, or at least in 2008…… Titon entered the Korean market. It set up a subsidiary, imaginatively called Titon Korea, in which it held 51% of the shares and managerial control. The rules for subsidiaries are that 100% of the assets, liabilities, profits, etc., are all consolidated in the Group accounts at the end of the year. So they are all lumped-in together even though Titon Parent only has an economic interest in 51%. To allow for the bit of profit, or the bit of net assets, attributable to the 49% shareholders the consolidated accounts include a deduction for ‘Non-controlling interests’; In the case of Titon Korea I understand these people to be ‘Korean investors’. Are you with me so far? Stop slouching then! Here it gets a little more complicated….but not too much, don’t worry. Titon set up, together with some ‘Korean investors’ (perhaps the same lot), another company, Browntech. This is not a subsidiary because Titon only controls 49% and does not have managerial control – it’s ‘Korean partners’ have managerial control. Browntech is therefore an ‘associate’. The assets, liabilities and profits are not consolidated into the Group accounts. Rather, a share of the profits, in this case 49% of the annual profits go into the Group accounts. Thus, you will find a separate line in the accounts called ‘Share of profit/(losses) from Associate’. For 2014 this was £181,000, whereas in 2013 it was £262,000. As I understand it, the subsidiary, Titon Korea, manufactures or imports from the UK. It then sells to Browntech which does the marketing to Korean customers. I have some numbers for 2013: Titon Korea sold £3.68m of goods to Browntech (double the previous year). Browntech had revenues of £5.62m – so Browntech has quite good mark-up. But it must also have a lot of expenses, because it only made profits of twice £262,000. All I have for 2014 is Titon Korea sales of £5.66m (not Browntech sales numbers). But note the rapid rise. Sales for Titon Korea have risen from £1.9m in 2012 to £5.66m two years later. Stunning! The Korean investors must be pleased they teamed up with Titon; and so are Titon’s shareholders. I’m surmising here, but, if the overall profit was £1.28m for 2014 and the UK profit was so small as to not be mentionable and the profit from selling in other countries (on revenue of around £2m) was also negligible, then the subsidiary in Korea must have made around £1.1m profit (because the ‘Associate’ made the other £188,000). Here endeth the accounting lesson. Are you still awake? In Monday's newsletter I'll look at the prospects for the UK business and examine the Korean business in more detail. The final part of the analysis I carried out in September 2013 is shown in this Newsletter. As you can see I was reasonably positive on the qualitative factors, but my main reason for buying at 37.9p was because of net current asset value was significantly greater than the MCap. Industry economics.
Titon operates in a very competitive industry and I see no reason for this to change. There is easy industry entry by new firms and little customer captivity. It is largely a commoditised sector. This is reflected in the poor profits over five years: roughly breakeven on average. However, even commoditised sectors can improve and allow leading players to raise ROCE to an acceptable (or even above acceptable) level in a rising demand situation. The highly cyclical house building and construction sector may allow this to occur over the next three years or so. In addition, Titon have developed products (R&D budget of c. £400,000 pa) for the whole house ventilation with heat recovery market. This is likely to be a growth sector as building regulations get ever tighter regarding air-tightness (buildings are almost air sealed, therefore oxygen has to let in from somewhere; opening a window seems wasteful so heat-exchanged fresh air makes sense for many (currently too expensive to install for the houses I’m building though). There is a high degree of free entry to even this industry, but at least Titon are established. The recent improvement of the company’s fortunes in its overseas markets might indicate what happens to profits in an economic upswing to commoditised cyclical business. Managerial quality. In the recession, costs were cut and senior managers/directors pay was restrained with the highest paid director receiving £108,000 pa: not evidence of scamming the shareholders there. A younger team of directors is now leading the company with advice from the founder and other old hands. All the directors have many years of experience in this industry in this firm. The CEO joined in 1988, joined main board in 1997 as FD, becoming CEO in 2002. While over the past five years the combined record is merely break-even, the company stayed sufficiently financially strong and cash generative to pay for over £1m of dividends, £0.5m of new computer equipment and £0.4m pa of R&D. And yet, throughout this period Property, Plant and Equipment only declined from £4.4m to £3.5m, cash declined from £2.6m to £2.1m, net current assets (as defined by firm) declined from £5.8m to £5.1m, and shareholder’s funds declined from £10.2m to £9m. If this managerial team are simply managing decline then this has to count as very slow decline – and at a time of enormous general economic pressure. Financial stability. With no debt other than payables and a very high NCAV this company does not seem like a candidate for solvency or liquidity trouble. Profits (or rather break-evenness) is also stable. WHAT MIGHT CAUSE A RECOVERY IN SHARE PRICE? (a) General economic/industry improvement? Most likely of the four. (b) Managerial turnaround? Possible. Still investing in innovation. Still cost cutting. Korea and other overseas performances are encouraging. (c) Takeover? Possible (management control around 40% of shares) (d) Liquidation. Unlikely Questions (1) Will margins recover? (2) Will cash/NCAV/shareholder equity remain on a downward course year after year while directors continue to offer jam tomorrow? (3) Will they be competed out of existence by a bigger beast in the industry? In the Boxing day post I'll start the updated analysis I conducted last week. I hope you are ready for a tricky (just a little) accounting lesson. I first bought Titon in September 2013 at 37.9p. The shares have produced a return of 86% so far (including dividends proposed). A couple of weeks ago they reported very good results producing earnings per share of 8.52p. The questions are: has the share price got ahead of itself at 67p? Or, can I safely buy more? Is there enough margin of safety? The report I wrote (and posted on my personal website) in September 2013 provides the background – I’ll reproduce it in the next two newsletters and then add the most recent data and analysis.
My September 2013 analysis Titon, manufacturers of house ventilation products ranging from simple ducts to heat recovery systems [plus door and window handles and lock mechanisms], has a balance sheet which suggests a net current asset value investing (NCAV) bargain. However, we need some reassurance with regard to (a) the industry economics, (b) managerial quality, and (c) financial stability. Market capitalisation is £3.9m at a share price of 39p. The interim results to March 2013 show inventory of £3m, receivables of £3.2m and cash of £2.1m. There is no bank debt and only £3m of payables and £0.2m of deferred tax to deduct to arrive at NCAV of £5.1m. Even if inventory and receivables are marked down as suggested by Graham M.Cap is less than NCAV. Also consider that £3.3m of property, plant and equipment is shown in the BS, over £2m of which is freehold land and buildings. No pension deficit. Industry economics. Titon operates in a very competitive industry and I see no reason for this to change. There is easy industry entry by new firms and little customer captivity. It is largely a commoditised sector. This is reflected in the poor profits over five years: roughly breakeven on average. However, even commoditised sectors can improve and allow leading players to raise ROCE to an acceptable (or even above acceptable) level in a rising demand situation. The highly cyclical house building and construction sector may allow this to occur over the next three years or so. In addition, Titon have developed products (R&D budget of c. £400,000 pa) for the whole house ventilation with heat recovery market. This is likely to be a growth sector as building regulations get ever tighter regarding air-tightness (buildings are almost air sealed, therefore oxygen has to let in from somewhere; opening a window seems wasteful so heat-exchanged fresh air makes sense for many (currently too expensive to install for the houses I’m building though). There is a high degree of free entry to even this industry, but at least Titon are established. The recent improvement of the company’s fortunes in its overseas markets might indicate what happens to profits in an economic upswing to commoditised cyclical business. In tomorrow's newsletter I'll look at managerial quality, financial stability and ask what might have caused a rise in share price (as at September 2013). Then, in future newsletters I'll outline my new analysis, with an emphasis on sources of Titon's profits. Dewhurst has had a bumper year with the best ever earnings per share at 46.22p. Thus, with the ‘A’ non-voting shares at £3.65 the price-earnings ratio is only 7.9. And this PER is available for a share that over the last decade has pretty consistently raised both its eps and dps such that both have doubled.  (To read the company announcements you need the voting shares page on ADVFN, which is (LSE:DWHT))
Here is another ratio for you: Return on tangible assets employed was 29% for the year (measured by operating profit before deducting amortisation divided by tangible assets). And this is no freak year. The figures for the last 6 years have averaged around this, with the lowest being 23%. This is phenomenally high, indicating an ability to achieve high margins on sales (even in so-called bad years). Owner earnings have now exceeded £4m in a year, or at least the proxy for owner earnings using the actual additional investment in working capital and fixed capital items rather than the future required investment needed to sustain competitive position, unit volume and finance value generating new projects. Owner earnings proxy (2014 year) Profit after interest and tax deduction £3,930,000 Add back non-cash items (deprec + amorti) £1,194,000 Deduct additional working capital -£634,000 Deduct additional fixed capital investment -£361,000 OWNER EARNINGS PROXY £4,129,000 Intrinsic value compared with current market capitalisation On the assumption that future annual owner earnings (what can be taken out of the business by shareholders without damaging the economic franchise) are £4m then the intrinsic value of the firm is £50m assuming a shareholder required rate of return of 8% pa: Intrinsic value with no growth in owner earnings in the future = annual owner earnings/discount rate = £4m/0.08 = £50m. If you assume growth of 3% (a lot less than for the last 10 years) then intrinsic value is £4m/(0.08 – 0.03) = £80m. Current market capitalisation: Voting shares: 3.309m shares x £4.45 = £14.725m Non-voters: 5.166m shares x £3.70 = £19.114m Total MCap = £33.839m Qualitative elements I have been following this company for many years and have met Richard and David Dewhurst a few times. They love what they do – all the detailed ins-and-outs of engineering and continuous improvement. They know their industry inside out. I imagine their Dad talked about it around the dinner table when they were 2 years old. Historically, Richard and David’s statements have been very conservative, if not overly pessimistic. Then they usually outperform their predictions. This year we have upbeat (for them) comments: “Currently demand remains stable” “All but one of the overseas operations registered sales growth” “Double digit sales increases in UK” “Australia seems more buoyant…UK and North America are also reasonably positive, whilst elsewhere the picture is more uncertain” “We believe that the improvements we have seen on the sales side will be sustained” “We have been able to start the year with a strong order book that should continue through the coming year” Dupar controls : “grown strongly” “good sales of handrails…encouraging sales of a wider range of escalator spare parts” (last year’s acquisition integration going well then). Hong Kong (operated for 4 years): “built up an excellent reputation for its products and services…market remains quite buoyant” Lovely focus on doing what they do best: No acquisitions “Instead our focus has been on trying to improve the effectiveness of the operations of the Group. As part of those efforts we have been developing our range of metrics and working to ensure there is a clearer link between our business strategies and our employees’ individual objectives and contributions.” “Building our sales of complete fixtures [for lifts]…..complete signalisation” “Continued to work on improving processes throughout the year, with particular focus on waste” “Online monitoring system for lifts seems just what the market needs” You’ve guessed it! I think there is a large margin of safety with this share, so I have bought some more. |
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I wrote newsletters for almost 10 years (2014 - 23) for publication on ADVFN. Here you can find old newsletters in full. I discussed investment decisions, basics of value investing and the strategies of legendary investors. Archives
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