Gb Share Discussion Threads

[robow] 03/12/2017 15:40

identified in an article in The Daily Telegraph on 1st Dec, along with ASCO, Homeserve and Pearson.
Four low-yield stocks to buy today for dividends tomorrow
Over the past three decades the amount that companies invest in future growth has sunk dramatically compared with how much they return to shareholders.

Many professional investors are concerned that businesses are neglecting investment in order to meet the demands of income-hungry investors.

Globally, the ratio of company investments to dividends and share buybacks – where a company buys back its own stock to increase its earnings per share – has fallen by more than 70pc in 28 years.

In part, this is because modern service businesses require less cash investment than more traditional manufacturing companies. But it is also a consequence of a decade of rock-bottom interest rates, which have forced investors to put pressure on companies to hand surplus cash to them.

As a result, many firms now pay potentially unsustainable dividends while failing to invest for the long term.

Of the FTSE 100’s 10 highest yielders, eight have dividend cover (the ratio of profits to dividends) of less than 1, according to Stockopedia, a screening service, meaning they cannot afford to pay their dividends from profits alone.

Cutting or withholding a dividend is often an unpopular move, but in the long run backing a firm that takes the hard decision to hold back cash from shareholders in order to invest can be a profitable one – as long as the investments pay off.

Telegraph Money asked three top fund managers to name some of the companies that are investing their cash wisely at the moment.

GB Group

Market value:£670m

Turnover: £87m

Pre-tax profiit: £10m

Yield: 0.5pc

GB Group specialises in identity data, which is used to help businesses check the identity of customers and protect themselves from fraud.

Audrey Ryan, manager of the Kames Ethical Equity fund, said: “GB Group brings together data relating to the identities of 4.4 billion individuals, which helps its customers make good decisions about people. It is currently located in 17 countries, with an active customer base in 71 countries.”

She said the group had grown in part organically but also by acquiring other businesses.

“It has low capital requirements, which helps it generate a lot of cash. As it is exposed to a market that is growing by double-digit percentages each year, its strategy has been to favour investment over returning cash to shareholders,” she added.

In the year to March 2017 the company delivered earnings per share of 11.4p and paid a dividend per share of 2.4p. Its share price has risen by 80pc over one year.

Ms Ryan said: “The company continues to invest in product innovation and its sales department, and aims to enhance growth through making acquisitions that expand its technological capabilities, geographical reach and client base.”

[lomax99] 01/12/2017 08:23

IC comment:

The Net widens for GB Group

The share price of GB (GBG) reflects a substantial degree of goodwill – in every sense. The identity and data intelligence specialist delivered half-year adjusted operating profit of £10.4m, a doubling of the 2016 half-year comparative. Despite this, the share price was largely unmoved, although given the 89 per cent increase over the past 12 months, it seems investors have already bought into the group’s growth story.


That narrative is bound up with the rise of digitalised global commerce and the inherent security and financial risks that it poses. So investors will take encouragement from the 36 per cent increase in international revenue, including £3.5m from the sale of a perpetual licence to a leading European bank. This global development reflects the influence of acquired assets, notably fraud detection outfit GBG DecTech, and it’s been given added impetus through the May deal to acquire address validation service PCA Predict.

The group’s international reach has been enhanced through new business wins from the likes of LEGO and KBC Ireland, while closer to home the group’s services are now being employed by NFU Mutual and Sky. Performance has been encouraging across Asia-Pacific and EMEA, but strong opportunities are arising in the US, according to analysis from investment house Berenberg, “where the combination of PCA Predict and GBG’s existing technologies has resulted in opportunities with a number of leading US-based fashion retailers”.

Geographies aside, performance has also benefited from improved quality of earnings; a trend has been established whereby earnings are being supported by an increased proportion of higher-margin products in the business mix.

A 68 per cent increase in the level of intangible assets and £3.8m in amortisation charges provide testament to the level of M&A activity, but the balance sheet remains in good trim, with deferred revenue up 53 per cent and a net cash inflow of £9.9m at the operating level, against £3.6m at the 2016 half year.

Peel Hunt gives adjusted profit of £22.5m for the March 2018 year-end, leading to EPS of 11.9p, against £16.5m and 12.8p in FY2017.

The shares trade in line with historic ratings across a range of metrics, but an 18 per cent rise in organic revenue points to the rapid growth underpinning the group’s end markets. Buy. (at £4.24)

[mfhmfh] 29/11/2017 13:09

2 massive buys today

[mfhmfh] 28/11/2017 21:22

buy rating reiterated in today's IC

[broadwood] 28/11/2017 07:56

Peel Hunt
GB Group PLC
28/11/2017
Reiterates
Buy
Buy
0
515.00
515.00
435.00
0
2

[wildshot] 28/11/2017 07:41

On my first reading I obviously appreciate the rise in revenue and profits. I wonder how much acquisitions had an impact on this? Of concern for me was the level of intangibles, amortisation and the effect of shares issued which have contributed to a net cash position. I need to review the results further to figure out if this will be a company requiring further share issues or it is sustainable now to grow and acquire in itself.

Admittedly the share price appreciation has been positive in recent months. Are we now up with events since they expect to meet market expectations for the rest of the year?

[togglebrush] 28/11/2017 07:17

On first reading the Interims look pretty good.

[hotfinance14] 27/11/2017 16:28

Back over 450p later this week IMHO.

[broadwood] 27/11/2017 16:17

Showing strength ahead of results tomorrow.

Hopefully not mis-placed.

[hotfinance14] 27/11/2017 16:03

We will see another woosh.

[retsius] 27/11/2017 15:19

very quiet ahead of results tomorrow.Does anyone have an opinion?

[raymur11] 24/11/2017 16:19

It would appear that the shareholder register will show substantial support from some heavyweight investors this year who have shown confidence in GBG

[hotfinance14] 23/11/2017 09:33

Back over 400p.

[mfhmfh] 21/11/2017 18:29

results on 28.11.17 should confirm bullish trading update. All IMHO.

Peel Hunt raised its price target to 515p.

Finncap raised its price target to 450p.

[gswredland] 21/11/2017 18:22

Added a couple of days ago. Was hoping it would go lower but had to pay 388. Let's see what happens Tuesday

[mfhmfh] 21/11/2017 17:04

agree with above 2 comments. added more late today. GLA.

[metis20] 21/11/2017 16:11

Those ATs attacking the bid had effectively stopped by the end of last Friday.

Buying ahead of next Tuesday's H1 results looks to have started - from that 24th October update -

"GBG expects to report adjusted operating profit for the half year in excess of £10 million, an increase of over 90% on last year. This is ahead of half year expectations due to the positive effect on profitability resulting from the perpetual licence agreement referred to above."



That update moved the share price up from 395p to 455p over 9 trading days.....

[3rd eye] 21/11/2017 13:03

GBG GB Group............chart recovering from market general sell off. They report next Tuesday. If you look at last statement results were Very Strong. Brokers backing as well. They reported last time on 24th october, check the chart out for the rise after that date.

[broadwood] 17/11/2017 10:27

28th November. Settle the nerves? Or create some?

Hopefully the former.

[wolansm] 16/11/2017 20:19

7.50 would be better

[gswredland] 16/11/2017 20:15

350 would be lovely!

[gswredland] 16/11/2017 20:15

I hope I can top up soon especially given their last statement..

[wolansm] 15/11/2017 16:21

Most stocks taking a brutal kicking I sold a few at 420 now getting tempted.... 360s perhaps

[mfhmfh] 15/11/2017 13:36

Great buying opportunity at these levels IMHO

[stig2] 15/11/2017 12:49

m.m. shuffle again. Trying to put the frighteners on the newbie's. Not really fair but I suppose we should be use to it by now. Still strike me as faintly dishonest somehow:-(