Good morning! I'm having great trouble cranking an old PC into action, here in the lobby of a small hotel on the tiny island of Iona, off the coast of Scotland. What an idyllic place! Here for my cousin's wedding, later today, but my dedication to the markets being such, have dragged myself out of bed to do my usual morning report!
Tribal (TRB) issues Interim results today, which look alright (turnover flat, operating profit slightly up, but profit before tax up more strongly at 28%. I can't get access to broker forecasts at the moment, so am not sure what the fwd PER is. They state that their year is H2-weighted. Therefore one could argue their Interims are not that significant, although they do reiterate that current trading is in line with fullyear forecasts, so all sounds fine there.
If I'd bought shares in John Menzies (MNZS) at the market bottom in 2009, I'd be very happy by now, as they've seriously multi-bagged. Results this morning are flat, with Interim EPS at 32p. So that puts them on a full year PER of about 10. They distribute newspapers and also have an aviation division.
People keep telling me that newspapers are dead, but interesting to note that John Menzies still distribute 5m of the things every day! (45% market share), so it's a funny product which is supposedly dead, yet overall sells over 10m units every day in the UK!
Also, why is a newspaper distributer on a PER of 10, whilst a newspaper itself (TNI) is on a PER of 1.5? Doesn't make sense to me. Hence why I think, despite its recent 60% rise, TNI is still extremely cheap.
Agricultural & oil distributor, NWF Group (NWF) puts out rather poor results for y/e 31 May 2012. Operating profit down from £9.3m to £6.3m, although the fall seems to be down to poor performance from their oil distriubtion division - due to exceptionally warm winter & high oil prices, they say.
Divi has been maintained at 4.5p though, so a decent yield with the shares at 102p.
Doesn't interest me though, I don't like low margin businesses, especially distributors, as they tend to get sucked into becoming a bank for their clients - i.e. providing extended credit. One bad debt, and your profit is gone.
Looks like a strong start this morning, with FTSE 100 futures up 30, always helpful when one is having a day off, so I shall be able to relax and enjoy my cousin's wedding today here on Iona.
It looks like a lot of you are also on holiday, as I noticed a sharp reduction in readers about a week ago - either that, or my reports are not enthralling enough!
I was thrilled to see that we have readers of this Blog all over the world. Mostly in the UK obviously, but also many from our friends in USA and Ireland, so a shout out to you! Also we have readers in France, Japan, even Kazhakstan! So wherever you are, have a lovely day.
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