As expected August was a very quiet month on the investing front. Very few of my holdings reported any news and the market felt becalmed. Still that might just have been my perception since I spent most of the month in India and a very long way from any form of internet access. Actually, without wanting to get too worthy, witnessing widespread poverty on the streets of India made any concerns I might have had about my portfolio seem pretty petty. It's annoying when investment decisions don't go my way but it's hardly life or death and for that I'm very thankful.
Purchases
Volvere Bought 886p - August 18
I've been keeping an eye on Volvere for a while now since it was flagged up as a special situation in the SCVR and elsewhere. It's a very simple operation in that the Lander brothers, Jonathan and Nicholas, are specialists in acquiring and turning round struggling companies. Right now the company has majority ownership of three firms (Impetus Automotive, Shire Foods and Sira Defence) with Impetus being the one making the most progress. In addition there's £18.4m of cash on the books providing downside protection, funds for new acquisitions and a pot for share buybacks. The latter will further reduce the already low free-float but with the brothers currently owning almost 40% of Volvere anyway private investors are very much along for the ride. So why invest now? Well the price has slowly drifted lower over the year, by around 15%, and interim results will be out in a few weeks with up to date information. Hence I've taken an initial position while liquidity was high enough to make the purchase.
Sales
None.
Announcements
Next: This Q2 statement was poorly received by the market and I can see why; after storming growth of 6.0% in Q1 this has slipped to 2.8% in Q2 (and some of those sales might have been pinched from Q3 as well). Still FY growth was previously guided to be just 1% (with this expectation being maintained) and so the first half-year has come in with better than expected trading. On a more positive note cash flow remains strong and Next should generate around £300m in surplus cash this year. A nice problem to have and the board expect to spend all of this money buying back shares. Given that the total share count has halved since…
