Daily Stock Market Report (Mon 31 Mar 2025) - CMX, ITX, PETS, WG., PMP, BVXP, JSE, CRTA, RCH, CRE, SPSY, YOU, GMR, TIG

31st Mar by Roland Head

45 comments 6830 reads

Good morning!

News feed - update 1045: apologies for the timing delay with the news feed this morning. This has now been fixed.

Wrapping it up for today (2pm) - thanks for all your comments, today's report is now complete.

Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Petershill Partners (LON:PHLL) (£2.6bn)	Full Year Results	Adj PBT +8% to $216m. NAVps +9% to 471 cents. Special divi of 14.0 cents. Outlook: mixed.
Pennon (LON:PNN) (£2.1bn)	Trading Update	Y/E 31 March in line with exps. EBITDA “broadly flat” vs H1 and capex “comparable” to H1.
Pets at Home (LON:PETS) (£1.1bn)	FY25 Trading Update	Y/E 27 March in line with adj PBT of £133m. FY26: adj PBT exp lower, in range £115m-£125m.	BLACK (PW) / AMBER/RED (Roland) Today’s update includes a profit warning for FY26 and news of a delay to the expected findings from the CMA investigation into UK vet chains. While I think this is a relatively decent business, I’ve downgraded our view to reflect tough conditions for retailers and heightened uncertainty on regulatory conditions for the vet business, which generates more than half PETS’ profits.
Conduit Holdings (LON:CRE) (£584m)	CEO Retirement & Trading Update	Founder/CEO Trevor Carvey to retire on 11 Apr 25 so that he can return to the UK for personal reasons. FY ROE guidance is cut to between “high single digits and low single digits” due to additional reinsurance costs. Broker PanLib has cut FY25 earnings forecasts by 30% to 52.1p but left FY26 unchanged at 108.8p.	BLACK (PW) / AMBER/RED (Roland) [no section below] Today’s RNS was titled CEO Retirement but also concealed a profit warning - bad form. Today’s downgrade has been driven by the California wildfires. While the company’s net loss estimate of $100m - $140m is unchanged, management is concerned about the risk of further earnings volatility from other claims events that may occur this year. To protect against this, they are foregoing upside (hence lower return on equity) and purchasing additional reinsurance. This doesn’t seem unreasonable to me. However, I wonder if it does highlight the risks inherent in CRE’s smaller size and less mature investment portfolio vs listed peers. Value Trap styling and a big discount to book value suggests the market may also be doubtful about Conduit’s ability to generate attractive near-term returns.
Hunting (LON:HTG) (£517m)	Contract Wins	Subsea Tech order…

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rwh3ue

31st Mar

SRT Marine Systems (LON:SRT)

sorry chrisgb, not sure what "studies" you are referring to please clarify

JimMcLad

The studies he referred to were re Avacta (LON:AVCT) in another post - not SRT Marine Systems (LON:SRT) .

abtan

Spectra Systems (LON:SPSY)

I used to hold a few years ago, but sold after being confused by figures in the accounts e.g. no interest income on the large cash balances.

Today I was stumped again when reading through the CEO statement and not understanding why I didn't recognise the 2023 numbers highlighted below.

I wasted 10 minutes of my life to discover that these are in fact figures from 2022 :(

I stopped reading after this.

Today's results may be very good, but something so basic - in the CEO Statement no less - continues to make me wary of the financial controls in place.

mepfish

Re Spectra Systems (LON:SPSY) do we know why the broker forecasts (Allenby & Zeus) for F26F have flat Rev, Ebitda down $5m versus FY25F & eps down 20% ? neither note explains it.

Rusty2

Where has SRT Marine Systems (LON:SRT) come from?

littledavesab

Conduit Holdings (LON:CRE) Quick look. From extract elsewhere of Feb 2023 results - loss making https://www.morningstar.co.uk/... - but

Yet its reporting an 86% combined ration in current accounts which suggests / should be profitable.

Trading Update 31 March 2025

Ahead of Conduit's first quarter trading update on 14 May, CHL also wishes to re-iterate its previous preliminary loss estimate in relation to the California wildfires. Our preliminary undiscounted ultimate loss estimate, across all divisions, remains between US$100 million and $140 million, net of reinsurance recoveries and reinstatement premiums. It is, however, our intention to enter into additional reinsurance purchases to assist in protecting Conduit from further earnings volatility through this current financial year, and specifically as regards secondary perils. The cost of the additional reinsurance cover, plus other adjustments we intend to make to the portfolio, will reduce our previous guidance of potential forecast RoE for the year to between high single digits and low double digits. We believe securing the additional protection in a year with such a significant loss event so early in the year is a prudent measure. We maintain our cross-cycle mid-teens RoE guidance target.

MY VIEW: Reinsurance is especially lumpy..... but for me - all in all not very good reading. If insurers cannot price risk sufficiently then sooner or later the claims payments overtake the reserves, have been multiple examples in the insurance world previously (some involving fraud, remember Independent Insurance). Low barriers to entry (other than regulations), very price competitive. This is a very quick look could possibly be justified but personally I would want a safer insurance investment.

Snazzytime

The broker forecast reduction for FY'26 is due to FY'25 still including some residual element of the bumper sensors contract evident in FY'24 results. This will not be repeated in FY'26. This was flagged in previous commentary.

Future strongth growth is dependent on success in the tendering for polymer banknotes with the Middle East Central Bank(s). None of this is included in broker forecasts.

thanks, very helpful

Aislabie

We are on the same lines ! I too have added to Spectra Systems (LON:SPSY) . But I too am keeping some cash for when I am sure the opportunities arise, but more like 10%. I am also a bit concerned that I may be “falling in love” with Spectra - one of several investor biases that I know we must avoid.

Rusty2, the company has been in existence since 1987 but not in its current form. I wrote a piece here which although it is lengthy, provides a great deal of background on how SRT got to where it is now.
https://www.stockopedia.com/co...

You may find it a useful read. Certainly some other posters say have.

JSLDUK

There’s a 4.4p dividend coming next month which based on the current charge price is c6% payout. It’s not ideal the CEO leaving so abruptly but hopefully the fundamentals of the business remain the same.
As for Card Factory (LON:CARD) I also hold and likewise think is cheap, it is also a company that I think would do well in a recession as they are generally cheaper than their competitors. Feel the market is currently looking negatively to UK buinessses that employment a lot of people here given the cost to employ people is increasing from next month.

Robert W

I haven't looked at the notes but it is presumably because the big contract will have completed and they will be into maintenance mode. I was expecting it

yiannos1

Avacta (LON:AVCT)

It is a zero. They will need more money to pay bond holders, so a much discounted fundraise is needed (10p-15p).

Still Phase 1 trial and on a precise statistical number they have a chance of less than 1% until they pass phase 3 and get approval. They will fail current trials and then try to start different ones and target more naive investors.

Pumped daily by brown envelope people on X targeting innocent investors and their hard earned money.

Anything further than RED?

All the best.

thanks yiannos1, I have no position but was asking on behalf of a friend who has a small holding. I have passed on your comments.

chrisgb

Sorry, I was referring to Avacta (LON:AVCT) - these are drug trials. They report the success of these trials in glowing terms but as far as I can tell, they have a long way to go before a clear result.

Epitychia

Yes, but i think the case for silver is much more compelling.

Yes l know who SRT Marine Systems (LON:SRT) are.

But your post was about Avacta (LON:AVCT) or that is what you posted.

Hi Rusty2. We are at cross purposes. I posted about SRT trading update last week and separately about Avacta on behalf is a friend who holds them.

illiswilgig

Portmeirion (LON:PMP) Preliminary Results

Thank you, Mark for covering the PMP prelims. I found your thoughts to be fair and thoughtful.

Good point on the pension surplus. The commentary was not clear and the unaudited prelims don't include pension notes. The 2023 AR had this to say on the actuarial valuations,

At the date of the last valuation on 5 April 2020 the market value of the scheme assets was £35,596,000 and the scheme had a deficiency of £8,273,000. However, an additional valuation was carried out at 31 May 2021 due to changes in scheme assumptions and revealed a
deficiency of £1,300,000.
The actuarial valuation of the scheme was updated at 31 December 2023 in accordance with IAS 19 by qualified actuaries based upon deraft valuation results at 5 April 2023.

Next actuarial valuation due in 2026?

The new non-exec chair seems willing to take the difficult decisions and just in the nick of time?

Imho Portmeirion (LON:PMP) has paid overly generous dividends in recent years, run up too much debt and underinvested in its brands. Great when times are good, but in recent years papering over the cracks has not been enough. Not sure that the BoD actually understood the risks?

The turnaround of Wax Lyrical (combined with the assets of Aromaworks London) indicates that management have the capability to succeed when focused. I look forward to seeing more of this.

Broker FY25 forecasts look too high to me. Management have consistently over-promised and under-delivered. I expect Shore Capital to walk these figures back once we finally get to the see the note. I'd prefer under-promising and over-delivery from now on.

The shares are deeply unloved at the moment by investors. That attracts the contrarian in me. Risks are coming down but still high given its negative FCF and breakeven result with overstretched balance sheet.

Current P/NAV of around 0.5, EV/EBITDA of around 5.6x seems cheap. But then I thought that at twice the current price. So what do I know?

Operational gearing is high thanks to the brands. In 2019-2018 the share price was a 10-bagger. Not saying it will do the same again. If they do succeed in fixing the balance sheet in the next couple of years - then the upside does look attractive - if you can stomach the risk.

cheers

Mark

boringchess

There is almost definitely a large seller (or more than one) who has been getting out of Card Factory (LON:CARD), once they're fully out it will probably rise rapidly to a more sensible valuation

Its my largest holding and at a completely nonsensical valuation currently, given they had a v successful Xmas.

Daily Stock Market Report (Mon 31 Mar 2025) - CMX, ITX, PETS, WG., PMP, BVXP, JSE, CRTA, RCH, CRE, SPSY, YOU, GMR, TIG

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Roland Head

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