Investment for June

Discussion of the proposed Cashback Investment Club

Moderator: CIC officers

I would like to invest in

Poll ended at Wed Jun 19, 2019 3:16 pm

Hollywood Bowl
1
7%
Ramsdens
9
64%
GVC
2
14%
Essentra
2
14%
None of the above
0
No votes
 
Total votes: 14

garindan
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Investment for June

Post by garindan » Wed Jun 12, 2019 3:16 pm

Members,

Apologies for the delay in getting this one out to you. However, I have been extremely busy the past month and everything has fallen behind.

For this poll I have selected from a couple of Sharecast news articles from early December. There are a few interesting companies and I've also add a company we previously owned to see what members think. I've altered the voting this month to test how multiple votes might work. Therefore you can vote for as many or as few companies you would invest in.

Hollywood Bowl in the Sunday Times
Ramsdens in the Mail on Sunday
GVC in the Sunday Times
Essentra - our previous investment on two occasions

What do you need to do?

- review the information and investigate the companies
- please do post about your thoughts and findings on this thread so we can all benefit from it and discuss!
- take a view on each company and decide if you would invest or not
- the poll opens now and will end in 7 days time
- please either message me or post a reply to say you have voted, so I know how many members have voted.

What will the officers do?

- we'll remind you to vote before it closes
- we'll implement the result, invest in at least one share £1000 if there is support to do so and let you know the details

Let's see how this vote works :thumbup:

Many thanks.
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garindan
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Re: Investment for June

Post by garindan » Wed Jun 12, 2019 3:19 pm

Sun 09 December 2018 17:15

Hollywood Bowl

In her 'Inside the City' column for the Sunday Times this week, Sabah Meddings was looking at tenpin operator Hollywood Bowl, saying that the firm was leading a "quiet revolution" in the leisure sector with a reputation for sticky floors, sweaty shoes and seedy establishments.

The company operates 58 bowling alleys across the UK, with most of them located adjacent to cinemas, and floated in 2016 with a valuation of £240m.

Its shares did have a rocky start to publicly-traded life after private equity firm Electra sold out, but they recovered and ended up rocketing to 234p in May.

Recently, however, they had wavered, closing at 183.5p on Friday - giving the company a valuation of £275.3m and providing what should be a buying opportunity, Meddings wrote.

Hollywood Bowl is set to report its full-year results on Monday, with analysts anticipating another special dividend after shareholders were treated to a 3.33p per share distribution last year.

This year's Christmas present was expected to fall between 3.5p and 4p, according to Shore Capital.

Meddings said part of the reason for the share price's recent drifting was an increasingly difficult consumer climate this year, with a stiflingly hot summer and the Football World Cup keeping families outdoors.

But Hollywood Bowl was still performing well, she said, right as the leisure sector was continuing to outperform its retail counterpart for its share of consumer spending, with British families appearing to now value experiences over the accumulation of more things.

The company remained cash-generative, with the board keeping a lid on costs to ensure a solid dividend yield, with Meddings saying it was expected to be 3.9% this year.

Revenue and earnings were also on track, with the firm expected to turn over £121.3m this year, up from £114m, and pre-tax profits set to hit £23.3m.

Hollywood Bowl was not resting on its laurels when it comes to locations, either, with new bowling alleys opening in Dagenham, Yeovil and Watford.

A new centre set to open soon in the Intu shopping centre at Lakeside in Essex would be the largest one to open in the UK for a decade, and would be ideally located right next to a Nickelodeon-themed indoor amusement park.

The company's scale was an advantage, too, with 173 of the UK's 309 tenpin bowling alleys currently run by independent operators, in groups of five sites or fewer.

Meddings said the company was ideally-placed to invest in technology such as online bookings to keep its costs lower and maintain family-friendly pricing.

"Investec has a 255p target on the company, while Berenberg and Peel Hunt are predicting 250p," Meddings noted.

"The recent dip in the share price gives investors a chance to get on board. Buy."


Ramsdens

Over in the Mail on Sunday, Joanne Hart was looking at a stalwart sector of the British high street - pawnbrokers - for her 'Midas' column, describing operator Ramsdens as "thriving", with its £1.66 share price a "bargain".

Hart noted that its list of locations was growing, with customer numbers increasing and still plenty of room for the group to expand.

She also said the balance sheet was "rock solid", suggesting shareholders could expect decent dividends for the foreseeable.

The company was not just a traditional hole-in-the-wall pawn operator, with it offering bureau de change services and new jewellery alongside unclaimed pawn items and second-hand jewellery.

It was also well into the 21st century with a growing online operation, with Hart saying its online jewellery division was making "particularly strong progress", with sales up more than 120% in the first half of the financial year.

Ramsdens published its interim numbers last month, reporting a 10% improvement in revenues to £24m and a 4% rise in gross profits to £16.7m.

Its jewellery profits were 23% higher year-on-year, with its pawnbroking and precious metals purchasing operations also showing "steady progress", according to Hart.

The company's pre-tax profits did slip 3% to £5m, but this was put down to investments in new store openings and staff training, with the board lifting the interim dividend to 2.4p.

Ramsdens had some aggressive expansion plans, with the North of England-focussed chain set to have opened 12 new stores in the current financial year and planning similar numbers for several more years to come.

Hart noted that recently-opened stores had outperformed management expectations, with the group as a whole attracting 0.8 million pairs of feet through the doors each year.

Recent payday loan problems in the sector had benefited Ramsdens, too, weakening its competition, as the company only lent money against pawn items, with 85% of customers paying their debts and reclaiming their jewellery.

It was also keeping up with industry trends, with its now offering travel cards as the tendency to take out several hundred pounds worth of foreign cash waned in the era of card-based payments.

Hart said chief executive officer Peter Kenyon, who joined the then-tiny group in 2001, took a lot of time to ensure the firm's locations were in ideal places and were priced well.

Kenyon is a banker, she wrote, and was known for his caution, which was supported by the equally-cautious board, itself stacked with ex-chartered accountants.

"Brokers expect annual sales to rise at least 12% to £45m with pre-tax profits flat at £6.5m, rising to £7 million in 2020," Hart said.

"A dividend of 7.1p has been pencilled in for the current year, increasing to 7.8p in 2020."
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garindan
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Re: Investment for June

Post by garindan » Wed Jun 12, 2019 3:21 pm

Sun 16 December 2018 16:35

GVC

GVC Holdings was a 'buy' for the Sunday Times' Inside the City column, with the shares trading on an undemanding multiple of 8.8 times forecast earnings and the business appearing "well placed" to cope with the prospect of an online gambling tax and a ban on TV advertising.

This week the shares, which are down 22% over the past 12 months, received a boost this week, thanks to a canny clause inserted in the takeover of Ladbrokes Coral earlier this year. When MPs vote on Monday to enact legislation to reduce the maximum stake allowed on fixed-odds betting machines from £100 to £2, it will result in the group's bettings shops being a lot less profitable. As part of the takeover, GVC offered to pay another £676m to Ladbrokes former shareholders if the law did not change before the end of March. But this deadline now looks almost certain not to be missed, meaning GVC can keep that cash.

For 2018, the group is targeting £3.5m of sales and underlying profits of almost £740m. While the future UK business will be hit by the FOBT changes, across the pond the company has been one of the first movers in taking advantage of the legalisation of sports betting via a tie-up with MGM Casinos. Some analysts forecast GVC could have sewn up around a quarter of the US market by 2023.
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Re: Investment for June

Post by AAAlphaThunder » Wed Jun 12, 2019 5:19 pm

I have voted.
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Re: Investment for June

Post by AAAlphaThunder » Wed Jun 12, 2019 5:19 pm

What happens if two choices have the same number of votes? As we have the funds do we buy both? Or does the Chairman have the golden vote?
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garindan
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Re: Investment for June

Post by garindan » Thu Jun 13, 2019 11:35 am

AAAlphaThunder wrote:
Wed Jun 12, 2019 5:19 pm
What happens if two choices have the same number of votes? As we have the funds do we buy both? Or does the Chairman have the golden vote?
So you can vote for as many or a few as you want in this poll. Voting currently suggests members might not have done that yet.

If two options get the same number of votes AND they are majority votes we may buy them both. Likewise if there are two options that have different numbers of votes AND they are majority votes, we may buy them both. However, I would set that decision at my discretion, as I want to ensure we have another vote next month and I need to see how effective this type of vote is before committing to anything other than one one purchase of £1000 for June.

Sorry that is not 100% definitively clear but you can see I'm trying to explore mechanisms at the moment, to make us function more efficiently, encourage activity and maintain a good flow of club buying and selling.
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garindan
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Re: Investment for June

Post by garindan » Thu Jun 13, 2019 11:37 am

So I see someone voted for Essentra - would that member like to tell us what they found out about the company that made them want to vote positively? Information shared is good for us all.

Likewise, Ramsdens has caught at least 5 members' eyes - thoughts on why you liked this one?
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Re: Investment for June

Post by parchedpeas » Thu Jun 13, 2019 7:31 pm

Ramsdens is a gut instinct based on the current precarious nature of the economy. Liquidiating for cash is going to be a growth industry in the coming months.
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Re: Investment for June

Post by kevinchess1 » Thu Jun 13, 2019 11:25 pm

I’d go with Ramsdens
They do a lovely fish supper
Politically incorrect since 69

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Re: Investment for June

Post by hiswitzend » Fri Jun 14, 2019 5:40 pm

kevinchess1 wrote:
Thu Jun 13, 2019 11:25 pm
I’d go with Ramsdens
They do a lovely fish supper
I have to say thats who i thought it was when i voted
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