NXT, AMS, DNLM, TTR – The Good, the Bad, & the Ugly

nxt-ams-dnlm-ttr-the-good-the-bad-and-the-ugly

It’s been a very busy ten days, both for portfolio constituents and myself.  We’ve seen interim results released for Next (NXT), Advanced Medical Soluitions (AMS) and 32Red (TTR), as well as final results for Dunelm (DNLM).

 

Not a lengthy post for me today as I am frankly exhausted, and whilst there’s lots of good to write about (with little bad), essentially it’s business as usual for the portfolio.

Advanced Medical Solutions

  • Revenue up 20%
  • Profit before tax up 13%
  • Diluted EPS up 10%
  • Net cash up 82% to 41.1m
  • Interim dividend up 20% to 0.30p

Good results across the board for Advanced Med, with earnings growth in all business sectors.  Market share continues to expand in the US with LiquiBand holding 19% market hare and sales of RESORBA now proceeding following FDA approval in November 2015.  Not too shabby at all.

The Group continues to trade in line with current market expectations for profit and, as a result of the positive impact of currency, ahead of market expectations for revenue for the year ending 31 December 2016.”

“Ahead of market expectations” is music to any investors ears.  With such sales growth outside of the UK, AMS stand to benefit from the drop in the value of the Pound, and so I’ll be keeping a keen eye out for the final results.

Next

  • Profit before tax down 1.5%
  • EPS up 0.8%
  • Interim dividend held at 53p

As Next rightly point out, it has been a challenging year for the retailer.  Retail store sales were down 16.8% with net margins dropping by an equivalent amount.  Directory sales were up however, but not enough to offset the drop in retail sales.

So financially not a fantastic set of results, but digging through the report there are some positives:

NXT are making concerted efforts to improve engagement from customers browsing via mobile devices, improving both the mobile site and their iOS apps, with an Android app due to be released later in the year.  With an average rating of 4.5/5 for their iPad and iPhone app, clearly there is some aptitude there.

Online marketing efforts have also been substantially increased, resulting in internal rates of return of 53%, which is excellent.  All told, online engagement is improving.

Finally, while the combination of corporate bonds and banking facilities leaves a combined debt of 1.4bn, approximately 1bn of this is offset by customer receivables.

32Red

  • Net gaming revenue up 63%
  • EBITDA up 258%
  • Adjusted EPS up 85%
  • Interim dividend up 18%

Not much needs to be said here.  Fantastic results across the board and plenty more to come.  One particular highlight is the increase in marketing and TV advertising, which should see further exposure and with that, further growth.  Full year results could well be excellent.

 

Dunelm

  • Revenues up 7.1%
  • Profit before tax up 6.2%
  • Diluted EPS up 7.5%
  • Dividend up 16.7%

Rounding off the post are the final results from DNLM.  Steady growth and strong free cash flow have led to strong performance and a positive expectation for continued growth, with nine extra store openings planned.

Average customer basket sizes are approx. £30, leading to two thoughts.  Firstly, the company is well positioned to provide consistent growth throughout a potential economic downturn.  Secondly any potential impact of Brexit should be mitigated by the lack of reliance on big purchases.

An outlined three part growth strategy has been met on all counts.  Firstly, like for like sales are up.  Secondly, new stores continue to be opened, and significantly the growth in home delivery continues at a decent pace (23.2% growth y/o/y).

Engagement with customer opinion is something the company appear to value, stating their consideration in planning the layout of new stores alongside a planned refit of 15 stores next year.

Conclusion

All in all, largely decent results from all four companies, and I continue to hold.

2 thoughts on “NXT, AMS, DNLM, TTR – The Good, the Bad, & the Ugly”

    1. Admittedly I considered selling part of my position in TTR having seen the price double, but I believe there’s a long way to go for this company.

      Thanks for the comment!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.