Long serving CEO Ben Stocks leaves on a high after record results to Nov 2024.Board optimistic for the future. Spread of businesses now gives a degree of resilience and strong cash generation has always been a feature in the 20 years+ I have held. |
Long Path just doubled holding |
Should be a good finish to Ben Stocks long tenure as CEO. |
Short and sweet update. Seems positive. |
Money moved to rank group [RNK] |
Decent H1 results, in line with management expectations. A large petro order to be shipped in the second half and anticipated better performance in H2 over H1 suggests that this could do 40p min FY eps putting it on a p/e of just over 16 which is historically cheap. Once risk-taking returns and barring any accidents I think this could easily return to a p/e of 20-plus meaning a share price over GBP8.
In the meantime, a safe place to invest always with the possibility that they get taken out which would have to be at over GBP10 to represent fair value to an acquirer |
Hello! Something going on here? Bid incoming?? |
it is hard to argue this is mispriced. SCSW running out of ideas imo |
1 of 3 primary recommendations in today's SCSW.
I don't have any; growth slow IMO. |
Encouraging to see (fairly modest) purchase by FD yesterday on a day when some large institutional trades went through. |
The dreaded "Second half weighting" appears to have upset sentiment,but may prove accurate in this case. After what may be a mundane first half, there was an air of cautious optimism at the AGM for both the second half of this year (which should benefit in particular from gasification spares order) and 2025, by which time improvement should also be see in profitability at recent acquisition Ratiolab,with other acquisitions making a meaningful contribution. Sensible timescale for search for long time CEO Ben Stocks replacement, as he will retire in 2025. |
Makes sense, and yes wouldn't disagree on that timeframe! One to buy on the dips for sure
Eric |
I would agree with all of that. I'm a longer term investor and can see this being a lot higher in five years' time if it isn't taken out in the meantime |
Not great really though, as I mentioned before
First half revenues were +10%
Full year only +2%
So second half revenues well down y/y. Not sure why the stock should re-rate on that until they really prove they can grow EBIT 8-10% per year organically (let's say 5% organic revenue growth and 3-5% from margin expansion), and that mix feels that is quite far away at the moment. Gets harder and harder to scale the EPS from here at the same pace as before, as there is less to go on margins than prior, I suspect. Maybe it can get towards a 15% margin on a long-term view from the close to 13% today?
I'd want a larger margin of safety on the valuation to be buying here I think; at best I'd call the stock fair value at 660p, but in reality, maybe 10-15% overvalued
No doubt this is a quality business though with a phenomenal track record. But share price hasn't really done a lot in a long time, and can see that continuing for a while longer as it keeps growing into its valuation
Eric |
Nice results. Adjusted EPS 6% ahead of consensus. Based on 15-year (!) CAGR adjusted EPS increase could do around 41p of adjusted earnings this year putting them on 16x future earnings which looks way too cheap. If they can get re-rated to the 23x earnings they have more normally traded at, the share price could be closer to GBP10. Plus, the possibility of a bid, good cash generation and an experienced and impressive track record from Ben Stocks means this is a core holding for me. |
One thing that strikes me is how - because of the profit beat - Porvair has been able to shake off what has been quite a weak second half on revenues.
At H1 growth was 10%
At FY, revenue is said to be 'similar' to 2022
Which probably means growth isn't at maximum more than 3%, and H2 was notably very negative (maybe -5-8%?). Also, some acquisitions from May would've really only contributed to the second half, so the recent performance has been pretty slow
Eric |
Tipped by Midas in The Mail today. |
Agree great update. Moving from £14m cash at year end to "modest" cash post acquisition suggests circa £10m cost |
Excellent update this morning with trading ahead and an acquisition though no cost mention and we still have a modest cash balance. |
Long Path Partners acquired 5.36%. Whale Wisdom shows GBP845m AUM. |
It’s a steady ship ⛴️. |
Any views here folks?. |
Excellent interims. |
A couple of acquisitions announced this morning. Seem a sensible move. Earnings enhancing in 2024. |
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