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JNEO Journeo Plc

257.00
1.00 (0.39%)
Last Updated: 14:05:44
Delayed by 15 minutes
Share Name Share Symbol Market Stock Type
Journeo Plc JNEO London Ordinary Share
  Price Change Price Change % Share Price Last Trade
1.00 0.39% 257.00 14:05:44
Open Price Low Price High Price Close Price Previous Close
256.00 256.00 259.00 256.00
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Industry Sector
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Journeo JNEO Dividends History

No dividends issued between 23 Apr 2014 and 23 Apr 2024

Top Dividend Posts

Top Posts
Posted at 05/4/2024 17:41 by eeza
Video - Paul Hill & Richard Crow (aka CR)


JNEO at 37.30 to 41.40mins
Posted at 02/4/2024 15:05 by 74tom
@Melody, it was a great deal for shareholders, there is no doubt about that. I just think that particular deal is now fully priced in given the move from 105p to 270p. On your second point, yes of course you have to believe in the future performance, but surely this belief has to be grounded in most recent trading? You want to see YoY growth in PBT, not the annual declines seen in passenger & fleet systems in FY23.

Thanks @hydrus, yours is a very balanced post. Worth noting that gross margins also decreased for fleet & passenger in the prior year too, so management have a bit to prove with the forecast 19% PBT improvement. On the FD share purchase, a £25k buy is always welcome, however I think you have to look at the bonuses declared in the annual report to judge it on merit. The FD received a FY23 bonus of £93411, which was more than triple the prior year amount. The cynic in me asks whether this bonus was grossed up to be reinvested in shares :)

I'd agree that it's hard to argue that JNEO is expensive right now, however let's paint a fictional FY24 scenario where passenger + fleet operating profit recovers slightly to £1m but infotec drops back to £2m and MultiQ adds £250k. Based on 25% tax, PAT would be £2.4m and EPS just shy of 15p. I'd say that's a 30% probability right now, there will be much more clarity come the half year results.

Will return then.
Posted at 02/4/2024 13:09 by hydrus
Some good points 74Tom. I think it is obvious that the NY subway contract was unusually large for Infotec and might not be repeated (hence the seemingly low price paid for the business) but there are further opportunities to expand that particular contract as discussed here previously. The importance of the efficiencies gained through consolidation of manufacturing bases plus expanding the customer base can’t be assessed through a historic financial analysis of course and I think they are the main reasons for the purchase.
Gross margin dropped in 2023 but is expected to increase again in 2024, which is why PBT is expected to increase 19% with revenues only increasing 4% in 2024.
I also think management have integrity and I think the FD buying shares at an ATH suggests they are confident in how things are going to pan out.
I hold ¾ of the shares I originally purchased (having doubled my average purchase I trimmed my position) and I expect the business to progress well. One has to take into account that the business will always be a bit lumpy because of the type of contracts they win but they seem to be very good at winning those so the trend is in the right direction.
Looking at the cash pile and the market cap it is very hard to argue that JNEO shares are expensive. Possibly fairly valued until we see how things pan out this year I guess.
Posted at 02/4/2024 11:27 by cockerhoop
74tom,

My understanding is that the deal to buy Infotec was actually agreed in 2019 but only consummated in 2023. (ie the agreement preceded the US subway order etc). Which does explain the lowly price paid.

That is not to undermine your point that the performance at Infotec is potentially unsustainable - i'd imagine JNEO management expect other parts of the business to improve after a poor year in FY23 - especially if further US subway orders are not forthcoming for Infotec.
Posted at 02/4/2024 11:17 by 74tom
Now to counter to obvious riposte re. Infotec performance being fantastic, my cynical question is this; why would IGL sell to JNEO for £8.7m (less cash held by IGL of £3m) in Dec 22 if the FY23 operating profit of £3.7m is in any way sustainable? Surely common sense would tell you that you don't sell a business for just over 2x operating profit / 1.5x EV/EBITDA?
Posted at 02/4/2024 11:16 by 74tom
Eric, I must say your post 862 is quite notable, to read & respond to my comments with a 397 word post in 4 minutes is superhuman. Are you using a GPT program by any chance?

You've responded with the standard bull case and of course things may play out like that. However, I feel that the market has got significantly ahead of itself based on the detail provided in last weeks report.

Digging further into the segmental reporting, operating profit for fleet & passenger systems in FY22 was £1.43m, in FY23 this more than halved to £698k. This meant that organic JNEO operating margin dropped from 6.77% in FY22 to 2.75% in FY23.

The trend is worse if you look at the half year reporting for fleet & passenger systems;

H122 revenue £8.87m, operating profit £449k, operating margin 5.1%
H222 revenue £12.24m, operating profit £981k, operating margin 8%
H123 revenue £12.5m, operating profit £513k, operating margin 4.1%
H223 revenue £12.8m, operating profit £185k, operating margin 1.4%

Passenger systems actually reported an operating loss of £45k in H223, vs a £410k H2 profit the year before...

Infotec saved the day contributing operating profit of £3.697m, and MultiQ £153k.

Cavendish forecasts in March 23 were for PAT of £2.8m, their reported PAT figure was £2.97m, so they beat this forecast by just £170k, with ~£130k of this attributable to MultiQ, so overall organic JNEO + Infotec were in line, and as the above info shows, organic JNEO was some £700k lower than prior year, despite the 20% top line growth.

Shares pumped from August onwards due to company repeatedly reiterating that they were materially ahead of forecasts. Whilst this is obviously true with regard to revenue, it's clear that organic operating profit was actually substantially lower than the prior year, and I can't imagine the March 2023 forecasts planned for that?!

It's also extremely relevant given the company likes ramping it's 'pipeline' of £55-60m, if this is work that will earn them a 2% operating margin then it's hardly exciting is it? And it's not as if public transport bodies are awash with cash.

Likewise with the recent purchase orders, they enjoy reporting the gross figure but £5.75m of orders at the H2 operating margin of 1.4% = £80k of operating profit...

Surely operating margins are everything if you are expecting expanding PE ratios & growing EPS to drive shares higher?
Posted at 28/3/2024 20:10 by pireric
If you do the maths for their portfolio/NAV RNS at the start of March

NAV £30.44m
JNEO 2.73% of the NAV
JNEO share price the day prior (end of Feb) 260p
Implies about 320k shares held at the end of February. You'd think that is materially lower now

Eric
Posted at 10/3/2024 18:27 by eeza
DSM is winding down. It is returning 25% @ NAV end of March, and 25% at above NAV end of June. I think they already have the funds to meet the 1st redemption, and will be securing funds for the end of June redemption now.

Judith MacKenzie is head of Downing funds and is a fan of JNEO, but has to carry out the winding up of DSM (Downing Strategic Micro Fund).

DSM had a NAV of £30.44m at 1 March, so JNEO holding worth ~£831K, I think.
Posted at 10/3/2024 11:14 by eeza
I believe the weakness is DSM selling down their holding.

They issue a factsheet once a month.
1 Jan shows JNEO at 8.04% (of DSM fund)
1 Feb shows JNEO at 3.01%
1 Mar shows JNEO at 2.73%

There were quite a few large trades late reported for JNEO last week.
Posted at 12/2/2024 08:43 by adamb1978
2024 expectations also look very light.

£48m revenue though JNEO did £24.2m in H2 2023
£4.4m PBT though JNEO did £2.1m in H2 2023

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