Greggs, Aberdeen, Globo, Vodafone, Bhp Billiton

I will generally post on announcements from companies that I am watching, or have an investment in, as a guide to how I analyse results and important issues related to the businesses.  Other people will anlayse companies from a different perspective and may disagree with my views.  That is only to be expected and it is what creates a market - one investor may see value and opportunity, while another may see distress and risk.

Five of my companies made announcements today, I'll comment on each briefly:

The leading bakery retailer in the UK, with almost 1,700 retail shops throughout the country.  I have a holding in my income portfolio (epic code: GRG).

GRG released an interim management statement (IMS).  Total sales in the 17 weeks to 27 April 2013 was up 3.0%, with wholesale and franchise sales contributing 2.9% to overall sales growth, although own shop LFL sales in the first 17 weeks was down 4.4%. The most recent two weeks indicate an underlying rate of LFL decline of around 1.5%, so there is some improvement in the decline. It is clear that GRG was badly affected by the snow and cold weather as footfall declined across their locations.  Although they are only four months into the year, based on current own shop like-for-like performance they believe that profits for the year are likely to be slightly below the lower end of the range of market expectations, which is £47.5m to £55.2m, this compares to £51.9m pre-tax (excluding exceptionals) last year.  Assuming  say £46m pre-tax and a similar tax rate to last year EPS is likely to 34.7p (36.9p LY).  So a forecast dividend of 19.9p (19.5p LY) would be covered 1.7x.


Following this announcement the shares were down 8.4% in early trading at 423.7p, representing an historic P/E of 11.5 (423.7p/36.9p) and a prospective P/E of 12.2 (423.7p/34.7p).  The historic yield is 4.6% (19.5p/423.7p) and the prospective yield is 4.7% (19.9p/423.7p).

Despite what is a disappointing performance at the start of the year, their new shop openings remain focused on locations that have been less affected by lower footfall such as workplaces, travel and leisure destinations.  For example they have 16 Greggs shops now operating under license by Moto in their motorway services.  Overall profits have been affected in the first quarter of the year and are behind their plan and last year; contributing slightly to this is the sales of promotional deals that have been particularly strong, having a slight negative effect on margins and they expect this trend to continue.  They do reinforce the point that  the business remains highly cash-generative and maintains a strong balance sheet position - important for income seekers.

A global investment management group, managing assets for both institutional and retail clients from offices around the world. I have a holding in my income portfolio (epic code: ADN)

ADN released their interim ( 6 months to 31 March 2013).  They were announcing some very good interim results.  Revenue was £516.0m up 25%, underlying profit before tax was £222.8m up 37% [reported pre-tax was £188.2 up 51.4%], underlying earnings per share 14.9p up 43% [reported EPS 12.43p up 56.4%] and dividend per share 6.0p increased by 36%. Assets under management increased to £212.3bn as at 31 March an increase of 13.4% from their September year-end, a result of both the positive market and currency performance and net new business flows. They are measured in their outlook, but confident that their investment philosophy and process will remain well suited to the pursuit of further profitable growth on behalf of investors. Free cash flow was strong at £220.1m compared to £132.1m last year.

Following this announcement the shares were up 8.9% in early trading at 454.3p, representing an historic P/E of 25.6 and a prospective P/E of 15.  Their historic yield is 2.76% and prospective 3.38%.  Although on the basis of these numbers there may be an upgrade to earnings and certainly the dividend, as anlysts had pencilled in a full year dividend growth of 23%.



GLOBO A technology innovator delivering mobile, telecom and e-business software products and services.  I have a holding in my growth portfolio (epic code: GBO).

 

GBO is a small fast growing technology company, sales & earnings last year were €58.1m and €17.8m respectively.  They have an important footprint in the BYOD (bring your own device) market.  The market size is about $68bn and expected to grow at about 15% pa over the next 5 years, with North America representing approximately 36% of the total market. 

 

I do not normally take much notice of awards, but today's announcement was pleasing as it raises GBO's visibility in that important North American market - for a small company this is important.

 

GBO announced that their revolutionary enterprise mobility management solution for SMBs, GO!Enterprise Box, was named a finalist in the Enterprise Solution - Mobile Cloud category of CTIA's annual Emerging Technology (E-Tech) Awards competition in the US. This product allows companies with up to 150 devices to securely run and manage their BYOD (Bring Your Own Device) mobile workforce through the GLOBO cloud infrastructure.

  

Vodafone the second largest ( behind China Mobile) mobile telecoms company in the world.  I have a holding in my income portfolio (epic code: VOD).

 

VOD announced that Mahindra Reva Electric Vehicles Pvt. Ltd., a part of the US $15.9bn Mahindra Group, has powered its recently launched e₂o electric vehicle - the first truly 'connected car' - with Vodafone's machine-to-machine (M2M) communication services.  With its energy and environmental crisis, if electric cars are ever going to make sense, then India is probably the country to push it, through subsidies and infrastructure.

 

 

BhpBilliton the largest mining company in the world.  I have a holding in my income portfolio (epic code: BLT)

 

BLT Signed a definitive agreement to sell its Pinto Valley mining operation and the associated San Manuel Arizona Railroad Company to Capstone Mining Corp. for an aggregate cash consideration of US$650m. It takes the transaction value of divestments announced over the last 12 months to US$5.0bn.   This open cast copper mine was only recently re-opened last year at a cost of $195m after being put on standby in 2002, so this would seem a reasonable deal selling a non-core asset.