GLEN ARNOLD INVESTMENTS
  • About
  • Henry Spain
  • 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

Dewhurst – return on net tangible assets

9/12/2020

0 Comments

 
Dewhurst (LSE:DWHA) reported its annual results to 30th September 2020 this morning. They were very pleasing. Basically, they had to adjust operations considerably during lockdown, but by dint of dedication and teamwork, overall sales were down only 1.5% and adjusted operating profit was up from £7.7m to £8.6m.
If I add back exceptional costs that will not reoccur then underlying profit after tax is £6.35m compared with £5.4m in 2019. That is earnings of 78.5p per share (or 74p if we deduct the non-controlling interests).  The A non-voting shares are trading at £6.50 to buy. At that the PER is £6.50/£0.74 = 8.8.
“Owner earnings” for 2020 is even more remarkable. Profit after tax and deduction of non-controlling interests was £5.98m. Adding back depreciation and amortisation we get to £8.99m.  Cash was released from working capital (£2.43m) but some money was spent on capital items (which is not disclosed so I’ve estimated at £0.32m). Thus “owner earnings” is roughly £11m or £1.36 per shares. Of course, we should not take just one year’s owner earnings to estimate earnings power. But it is encouraging to see such a large lift in “owner earnings” last year. (Owner earnings for the previous 8 years were provided in yesterday’s newsletter).
Most of the rest of the newsletter was prepared before I knew that annual results will be announced today.  I have however updated the data and analysis below.
Return on net tangible assets, RONTA
Today’s newsletter looks at a stab at a valuation of a Dewhurst “A” share through a consideration of its return on net tangible assets.
Profits, assets and liabilities
£’000s  Year end September 2020 2019 2………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

0 Comments



Leave a Reply.

    Picture

    Glen Arnold

    I'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact [email protected]

     investing is about making the right decisions, not many decisions.

    Categories

    All
    Berkshire Hathaway (NYSE:BRK.A)
    Caffyns
    Capital And Counties
    Character Group
    Charlie Munger
    Connect Group
    Daejan-lsedjan
    Dewhurst-lsedwhta
    Highcroft
    Investment-ideas
    Investment Philosophy
    John Templeton
    J Smart
    McCarthy And Stone
    MS International
    Orchard Funding
    Samuel Heath
    Tandem
    TClarke (LSE:CTO)
    Town Centre Securities
    Wynnstay

    Archives

    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    October 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020

    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
  • Henry Spain
  • 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