Friday Email: 17 June 2016
Every Friday morning our lead analyst Mark Riding sends out his weekly run-down and upcoming events in the investor calendar, like this one:
We are now in the home straight as far as the referendum is concerned and the odds of a Brexit have shortened with the bookmakers and the market does not like it one bit. The indices have plummeted as investors accept that the predictions of a major shock to the UK economy will occur on the event of Brexit. Added to this, I think it is fair to say that nobody knows what will happen in the event of Brexit which will lead investors to exit UK equity positions in the short term at least. For my part, either way, I see it as an interesting opportunity for investors to look at Multinational companies. Their business should not be affected particularly by Brexit as they operate legal entities across the globe. That said, even the US authorities are considering Brexit implications when setting interest rates, so perhaps the impact will be global. This time next week, we will know the answer...
The past week saw very good dividend increases from Ashtead, Telecom Plus, Crest Nicholson and Redcentric.
Ashtead produced a superb set of numbers with a 48% rise in the dividend and a share buyback announced (which commenced yesterday). It rose in early trading on Tuesday, but succombed to the panic selling that we are seeing across the board. This, in spite of the fact that it is effectively a US company with a small UK subsidiary. US sales in sterling were £2180.9m. UK sales were £364.8m. if the pound continues its slump, expect a big boost to next years earnings from currency translation.
The week ahead sees one of my favourite companies, Photo-me, produce its full year results on Tuesday and we are looking for the promised 10% increase in the dividend and a special dividend amounting to the excess cash that they have over £50 million. They have everything I look for in a company. Dividend growth, a strong balance sheet and very strong free cash flow. Expect profits in excess of £40 million as the Japanese business contributes very strongly.
New into DividendMax this week we have Norcros and Park Group who produced dividend increases of 17.7% and 18.8% respectively earlier this week.
The Friday email is delivered to over 20,000 subscriber’s every week, and remains a widely read run-down of recent events and what investors can expect in the week ahead written by our chief analyst Mark Riding.
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Read next: 10 June 2016
The market remains within a tight range as we pointed out last Friday and will end this week little changed on where we were last week.
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