Blog

October 13, 2017

Glennon is a shareholder in Vita Group (VTG.ASX) and this week we caught up with CEO Maxine Horne and CFO Andrew Leyden.

Vita operates just over 100 Telstra stores and has recently extended its business into selling Telstra’s product suite into small and large corporations. It is Telstra’s largest partner and has demonstrated a strong history of out performance since taking on the brand. In May this year Telstra made the decision to cut cost by 30% across the board and that included the commissions it pays its partners, including Vita. It has had a material impact on Vita’s earnings, most notably in FY18 and FY20, and certainly tested the relationship. The Telstra management that delivered that edict has already moved on and as recompense for the dramatic nature of the cuts Vita has been granted permission to increase its store numbers to in FY18 and 115 in FY20. We suspect further consolidation will take place amongst Tesltra stores owners, who by nature are typically small, leading to...

September 28, 2017

1. What does Net Tangible Asset (NTA) mean?

Listed Investment Companies (LICs) operate in the same way as retail managed funds, except instead of buying units you buy shares, which trade on the Australian Securities Exchange (ASX). These shares can either be trading at a premium or a discount to their NTA.

NTA is the total assets of a company, excluding intangible assets minus total liabilities. The NTA amount is divided by total number of shares outstanding, to give an NTA/share number. If the company’s share price is lower than its NTA/share, it is trading at a discount to NTA and vice versa.

2. Why might an LIC trade at discount to NTA?

There are a number of reasons why a LIC may trade at a discount to its NTA including:

- Poor investment portfolio performance, or for newer LICs, having no established past performance.

- Lack of fully franked dividends, a poor track record of paying them, or a perceived inability by the market to pay fully franked dividends in the future.

- Highly leverage...

September 28, 2017

Titomic Limited TTT

GICS Sub-Industry Materials

Current Price $0.44

Market Capitalisation ($M) 22

As of 28/09/2017 16:00 AEST
 

What do they do?

Titomic (ASX:TTT) is an Australian additive manufacturing, better known as 3D printing, specialist that helps companies produce goods at industrial scale more efficiently and effectively. It does so through its proprietary, patented process of applying cold-gas spraying of titanium or titanium alloy particles onto a scaffold to produce a load bearing structure called Titomic Kinetic Fusion.

Why do we like them?

1)  Best-in-class technology and patented

TTT has the competitive advantage of allowing companies to manufacture complex-shaped parts at a higher volume than any other current systems/technologies can. The technology was co-developed with the CSIRO and Force Industries, but TTT has exclusive rights to commercialise the process.

The technology is already patented in Japan and New Zealand, with patents pending approval in Australia, China, Europe,...

September 11, 2017

National Veterinary Care Limited NVL

GICS Sub-Industry Health Care Equipment & Services

Current Price $2.66

Market Capitalisation ($M) 129.06

As of 11/09/2017 16:00 AEST


What do they do?

National Veterinary Care (ASX:NVL) is a leading provider of veterinary services in Australia and New Zealand. NVL was listed in 2015 with a foundation portfolio of 34 veterinary clinics and businesses including general practices, emergency centres and a pet crematorium. Since then, NVL has acquired and integrated a number of other veterinary services businesses across Australia and New Zealand to take the company’s current portfolio to 56 facilities.

The business’ growth is heavily driven by acquisitions, and NVL has recently undertaken a $14.6 million capital raising to support its acquisition pipeline. NVL’s strategy is to continually acquire established, profitably veterinary clinics that will enhance existing established geographical clusters, eventually hoping to consolidate a highly fragmented market.

O...

September 6, 2017

CML Group Limited - CGR

GICS Sub-Industry - Commercial and Professional Services

Current Price - $0.34

Market Capitalisation ($M) - 45.9

As of 06/09/2017 16:00 AEST

What Do They Do?

CML Group (ASX:CGR) is a provider of factoring/receivables finance. Factoring is a financing method in which a business sells its accounts receivables/ invoices at a discount to a third-party funding source to raise capital. CML has a tightly focused credit approval process, which enables it to assess and approve new facility applications within 24 hours of receiving the relevant information. It is then possible to settle a new account within five working days.

CML provides a payment of typically up to 80% of a client’s invoice in advance of payment from their customer (often 30 to 60 days). Invoices funded are also covered by insurance. The current policies are from QBE and a subsidiary of Allianz, both of which cover all losses greater than $5,000 to a maximum of 90%. CML therefore has recourse to the end debtor...

August 4, 2017

On the 4th of July, the Australian Bureau of Statistics released the latest retail sales figures, touching on many of the retail segments services by the ASX listed retailers. Retail turnover rose 0.6% in May, with all retail categories experiencing growth except for department stores which fell 0.7%. Despite being down from the 1% growth in April this result, which is triple that of the market’s estimated 0.2% rise, the latest sales figures are a welcome surprise for investors, as the retail sector is at the centre of investor uncertainty amidst news of Amazon’s imminent arrival.

                                                                               Source: Australian Bureau of Statistics

Although Amazon is not expected to arrive until the end of 2018, confirmation of their arrival has c...

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