wineberry
18 Dec 2016
A look again Thanks for that PEG ratio, Blanketstacker; that's one stat I can never work out! I thought that the dividend cover is actually a bit higher around 2x.This is a company trading solely (correct me if I'm wrong) in the UK, and therefore unaffected by currency movements. The decline of newspaper/magazine distribution has been well flagged but the company seems to be managing it very well. It's debt levels have risen in order to invest (Tufnells) but have fallen by 7.8%from their highs.The important figure to me is the free cash flow, which in turn gives the dividend cover. When one looks at the financial reports, the stats are quite impressive - growth of revenues, profits & dividends for the last 5 years.This will never be an exciting company. It is in boring businesses. A possible threat is a decline in parcel and goods delivery if there is a decline in internet purchasing and then returns when there is another recession. Hopefully that is well in the future. Looks good for income seekers with possibilities of modest capital growth.
Blanketstacker
16 Dec 2016
Time for a tickle? On the negative side there is a LOT of debt, and the core business of print distribution is allegedly in decline. However
ER = 7PEG - 0.5Yield = 6% (covered x1.8)The company is diversifying into new areas, primarily through acquisition.Any comments please?
nk1999
01 May 2016
Mail- Midas "......... Cashmore's careful capital management means that Connect can continue to offer a good dividend, with an attractive 6 per cent yield. Connect was a Midas tip back in 2010, when it was still called Smiths News. Then its shares were at 108p. Today they stand at 154¾p but should still have a way to go.Midas verdict: Under Cashmore the firm has successfully diversified on the back of its know-how and infrastructure, and its latest results show the policy is working. Buy."Read more: [link]
nk1999
22 Apr 2016
Telegraph- Questor "The Questor Column:Connect Group enjoys 36% jump in profits: Connect Group, the newspaper distributor, enjoyed a steady start to the year with a 36% jump in pretax profits, and a major contract extension secured the revenue and underpins the chunky 6.2% prospective dividend yield. The company said it has agreed a five-year contract extension with Northern & Shell, the publisher of The Daily Express, Daily Star, and OK! Magazine. The deal will guarantee about 5% of annual revenues until 2021. Mark Cashmore, Chief Executive, said he now has contracts in place that secure 94% of the £1.8 billion in annual revenue until 2019, and 75% until 2021. Magazines also enjoyed an improved six month trading period with sales down 3.4%, much better than the 8% fall in sales reported three years ago. The newspaper and distribution business generated 75% of group revenue and 65% of operating profits in the six months to the end of February, with revenue down 2.1% to £731 million and adjusted operating profit 2.4% lower at £21 million. This was better than management’s expectations that sales would decline by between 3% and 5%. A steady outlook on revenue and tight cost control means the company generates plenty of cash, with £18 million in free cash flow in the first half, up 13% on a year earlier. Management had the confidence to increase the interim dividend by 3.4% to 3p, going ex-dividend on June 8 and payable on July 8. The stationery business has also been hit by cuts to school budgets and both revenue and profits were flat at £31.6 million and £2.8 million in the first half respectively. Connect Group at 152p-0.5p. Questor says “Hold”. "
Hydrogen Economy
20 Apr 2016
H1 Results Solid, decent rise in profits, great yield remains well covered by earnings and cash flow, interim dps up 2.9 to 3p, positive sign for finals. CNCT are in the delivery business, looks like that is what they are doing.H2AdjustedRevenue £948.4m £909.9m +4.2%Profit before tax £27.2m £24.1m +13.0%Earnings per share 8.9p 8.6p +3.5% Statutory results Profit before tax £19.2m £14.1m +35.9%Earnings per share 6.3p 4.6p +37.0% Interim dividend 3.0p 2.9p +3.4%Free cash flow £18.0m £16.0m +12.5%Net debt £160.9m £157.9m
oldjoe1
29 Jan 2016
Historical article going back a few months on CNCT Connect......Connect deliversTIP UPDATEConnect Group PLC (CNCT)VALUEMEDIUM RISKDaniel Liberto,14 October 2015Our previous tipWE SAID BuyWHEN20 November 2014PRICE150p (adjusted for rights issue)TIP PERFORMANCE TO DATE+4%Connect's (CNCT) £115m acquisition of next-day delivery service Tuffnells last December looks to have been a smart one. Underlying revenues at the parcel freight business grew 20 per cent, helping to send group adjusted pre-tax profit surging 13 per cent to £57m. Buoyed by the early success of Connect's shift into higher-growth areas, investors propelled the shares up 5 per cent.But the legacy news distribution unit also put in a respectable shift. Despite heavy investment in the 'pass my parcel' service and the absence of last year's World Cup sticker sales, divisional adjusted operating profit fell just 4 per cent. Connect also benefited from £5m of cost savings, which management expects to repeat in the next two financial years. It reckons those extra funds can mitigate falling newspaper sales by bankrolling additional investments, including roughly doubling the number of parcel shops to 6,000 as the company prepares to unveil a new mobile-enabled returns service with a major retailer.Chief executive Mark Cashmore says Connect's aggressive cost-saving strategy should also absorb the impact of the national living wage. Broker Liberum upgraded its adjusted EPS forecast for the year to August 2016 by 2 per cent to 19.5p (FY 2015: 18p).CONNECT (CNCT)ORD PRICE: 156p MARKET VALUE: £381mTOUCH: 152-156p 12-MONTH HIGH: 172p LOW: 124pDIVIDEND YIELD: 5.9% PE RATIO: 17NET ASSET VALUE: 4p* NET DEBT: £144mYear to 31 Aug Turnover (£bn) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)2011 1.73 32.1 12.1 8.02012 1.80 36.6 15.2 8.62013 1.81 38.9 15.7 9.32014 (restated) 1.81 43.1 16.8 8.82015 1.88 29.0 9.3 9.2% change +4 -33 -45 +5Ex-div: 14 JanPayment: 12 Feb*Includes intangible assets of £175m, or 78p a shareIC VIEW:Connect's shares are marginally up since our buy tip (150p, 20 Nov 2014), but still trade on just eight times forecast earnings and yield nearly 6 per cent. That reflects the big debt pile - exacerbated by the Tuffnells acquisition - and the risks associated with managing a declining business. But judging by these results, Connect is delivering on its promises of careful cost management and expansion into growth markets. Buy.
oldjoe1
29 Jan 2016
Broker Views for Connect Group PLC19 Jan 16 JP Morgan Cazenove Overweight 0.00 180.00 180.00 Reiterates14 Jan 16 JP Morgan Cazenove Overweight 0.00 180.00 180.00 Reiterates13 Jan 16 Shore Capital Hold 0.00 - - Retains13 Jan 16 Peel Hunt Buy 0.00 174.00 174.00 Reiterates13 Jan 16 Liberum Capital Buy 0.00 190.00 190.00 Reiterates13 Jan 16 finnCap Buy 0.00 201.00 201.00 Reiterates
oldjoe1
29 Jan 2016
Re: CNCT, Hits Support, WAY UNDERVALUED. CNCT Connect Group PLCProduced a superb trading update only a couple of weeks back.......[link] to be ( Smiths News plc).and trades on a forward P/E of just 7.6 and and a prospective yield of 6.4 per cent this year, rising to 6.6 per cent in the year 2017.The exciting part of the distribution business is Pass My Parcel, the UK's fastest click-and-collect delivery service. It signed online fashion retailer Asos as its second customer and launched a new service enabling customers to return unwanted deliveries via their mobile phones. The click-and-collect market is expected to grow huge in the coming years,and take up a bigger percentage of the business.<b><u>Longer Term Chart</u></b>[link] Term Chart</u></b>[link]
oldjoe1
29 Jan 2016
CNCT, Hits Support, WAY UNDERVALUED. CNCT Connect Group PLCProduced a superb trading update only a couple of weeks back.......<a href='[link] target='window'>[link] Well worth reading.Used to be ( Smiths News plc).and trades on a forward P/E of just 7.6 and and a prospective yield of 6.4 per cent this year, rising to 6.6 per cent in the year 2017.The exciting part of the distribution business is Pass My Parcel, the UK's fastest click-and-collect delivery service. It signed online fashion retailer Asos as its second customer and launched a new service enabling customers to return unwanted deliveries via their mobile phones. The click-and-collect market is expected to grow huge in the coming years,and take up a bigger percentage of the business.<b><u>Longer Term Chart</u></b>[link] Term Chart</u></b>[link]
Oxtrader
13 Jan 2016
Trading Update CNCT being primarily a logistics company, I'm surprised that their operating costs haven't fallen significantly since the price of oil hitting decade lows. Unless they subcontract all their drivers !
nk1999
17 Oct 2015
Telegraph- Questor From Thursday 15/10:"The Questor Column:Connect shares still offer value: Connect Group has proven that it can generate steady cash flow from a declining newspaper distribution market, and that has enabled it to pay chunky dividends to those investors willing to take a closer look. Connect Group, formerly called Smiths News, was created following the 2006 demerger of newsagent WH Smith. At the time of the demerger many potential investors would have simply read it the last rites. The business is in long-term decline and the large distribution centres, fleets of vehicles, and drivers give it an unwieldy cost base. The company is adjusting to falling revenue by reducing costs. It cut another £5 million from the business last year, bringing total savings to £20 million in the past three years. Connect is using the rest of its spare cash to move from distribution. It announced a move into parcel delivery through the acquisition of Tufnells in December and it was this purchase that largely increased group revenue and profits during the year. Connect expanded into school stationery through the purchase of Consortium in 2012. The school stationery business is dealing with constrained education budgets and operating profits remained largely flat. The shares price in much of the tough outlook, trading on eight times forecast earnings, and offer a forecast dividend yield of 6%. We would be happy to hold on for that income. Connect Group at 159¾p+11¾p. Questor says “Hold”."
mcescher
29 Jul 2015
Analysis of CNCT Connect Group is looking undervalued on this report [link]
Hydrogen Economy
22 Apr 2015
H1 Results - Overall pretty solid Results at first glance look a bit mixed but overall are, (given the significant Tufnells acquisition, Amazon and other initiatives) pretty solid. The business seems in pretty good control balancing some good growth opportunities against the known decline in news distribution.Slightly raised (but already very generous) dividend looks to be under no threat. I will continue to hold. I think the market has been pricing in some possible bad news in last couple of months, hopefully this will reassure and drive SP back up.Revenue up 1.2%Underlying Operating Profit up 3.3%Underlying Profit after tax up 2.1%Underlying EPS down 10.1 to 8.6pInterim DPS 2.9p up from 2.8p Statutory EPS down 8.2 p to 4.6p (various reasons including RI)Big positive is free cash flow up 11.9m to 16m so I think dividend not under threat.Results include 10 weeks Tufnells Tuffnells has seen continued strong sales and profit growth. Sales were up 16.9% to £28.4m driven by increases in both volumes and the average price per consignment whilst operating profit at £1.5m was up 11.6% for the same 10 week pre-acquisition period last yearThat suggests that the integration is working well and has scope for significant growth. News/magazines declining at slower pace than forecastCoffee - growing wellAmazon - too soon to tell but CNCT are ramping up no of stores from 700 to 3000.H2
Hydrogen Economy
21 Apr 2015
H1 Results Weds 22nd Not expecting any fireworks but hopefully signs that the acquisition is bedding down OK and that the excellent dividend will continue to be well covered.Holding and at this price and yield almost tempted to add, also I think CNCT will be least affected by any pull-back as there is no recent gain to give up! OK that's my glass half-full worth. H2
nk1999
18 Jan 2015
Telegraph- Questor "The Questor Column:Connect shares slide on falling revenue: Connect Group, the largest newspaper and magazine distributor in the U.K., reported falling revenue and a disappointing performance from its education stationery business, sending shares down more than 5%. The company reported a 1.5% dip in sales for the 19 week period ending January 10, compared to the same period last year. Revenue from distributing newspapers fell 2.8% on a like-for-like basis. Connect Group was formerly called Smiths News but changed its name to Connect last year. Connect is still predominantly a U.K.-focused newspaper and magazine distribution business with 84% of group revenue and 77% of operating profits coming from that part of the business. The newspaper distribution business is declining but it is also profitable and generates lots of cash. What’s more, the company is using that cash to diversify the business. Book business Bertrams was purchased out of the Woolworth’s administration in 2009. Connect said revenue fell 1% during the period in a very competitive market. Connect expanded into school stationery through the purchase of Consortium in 2012. The school stationery business reported a disappointing 2% fall in revenue when analysts had been expecting 5% growth during the period. The company announced a move into parcel delivery through the acquisition of Tufnells on December 19. The distribution group said it would also use its existing fleet of vans and lorries to deliver Amazon parcels as well. The shares trade on 8 times forecast earnings of 18.2p per share, and offer a forecast dividend yield of 5.7%. The market expectations don’t look too demanding for the year ended August 2015. Connect Group at 139p-7.25p Questor Says ‘Hold’."
