I have held CTG since 14th May 2012 when made my first purchase at 70p and it was one of my earliest investments. It was bought for no other reason than it was one of Lord John Lee’s favourite stocks. He still holds 3.05% of the company. I have done little research into it since and am considering jetesoning it for reasons I will come to and certainly think Lord Lee could find better places for his money!
I have bought chunks of stock over the past four years at 73p, 67p, 73p, 53.6p and 110p. The last purchase being back in March 2014. My total investment over this period has been £11,864.00.
In late 2014/early 2015 I sold 7926 shares at 128p and 151p for £11,290 which means my current holding of 8754 shares are held for “free” pretty much. Though in hindsight I should have sold the lot at the beginning of 2015!
I have been considering, for while, selling the holding and was looking today and noticed that the Stockopedia Stockrank CTG has dropped to an awful 12. With the following ranks:
To be honest on most metrics it is looking pretty ropey. Profit, debt, free cash flow, working capital are all not great but in the interim results on September 12th David Rugg (who owns 12% of the company) wrote:
“After a difficult first half in the run up to the EU referendum, progress has resumed. We have stepped up the margin in our stocktaking division and are seeing increased activity in our transactional business. We look forward to a stronger finish to the year.”
The RNS also pointed to
- Interim dividend maintained at 1.0p per share (2015: 1.0p per share
- UK transactional pipelines at end of first half up 19% on H1 2015
- Strong European Hotel transaction activity
- Christie Finance’s pipeline of loan transactions has grown by almost 50% on a year ago, while the average loan value arranged for clients has increased by 9%
- Impact of living wage on UK retail stocktaking operations offset by successful fee negotiations
So while the figures for the first half nothing short of awful the outlook seems promising.
On the negative side Paul Scott doesn’t like them at all writing most recently:
“poor interim results from this services group. I can’t see any appeal in this company at all. Although the shares have come down quite a lot, as they should have done.
The outlook for H2 is better though. Note that there’s a hefty pension deficit on the balance sheet”
For me the jury is still out on pension deficits as they are a direct result of the current absurd monetary policy of most governments, but they can not be ignore completely
On balance I have decided to halve my holding on the basis that while I trust management they maybe being optimistic.