7:59 cut – Q4 Trading

Earlier that week I discussed that Shoe Zone, Next and MPac appear to have been unaffected by political uncertainty in calendar Q4…


The same cannot be said for Robert Walters, updating today:

UK net fee income down 23%.

o During the quarter client and candidate confidence deteriorated, across both recruitment and recruitment process outsourcing, due to the political uncertainty related to Brexit and the General Election.

There will also be some impact from taxation changes expected to affect contract employment from April (IR35). Follow an election pledge the government have started a review of the rules which could reduce their scope, but which in the meantime can only create greater uncertainty. Robert Walters did not disclose their permanent / contract split in their last annual or half-yearly reports, but globally they are at about 30% contract.

Recruitment companies generally are generally rated cheaply by the market because they overwhelmingly rely on staff (recruitment agents) for their sales rather than being able to leverage intellectual property (and other intangible assets) or their capital. Often the goodwill of client relationships moves around with highly mobile individual recruiters rather than being owned by the company. However the sector is unusually cheap at the moment and the lack of capital intensiveness is also an advantage.

It will be interesting to see if there is any impact on the share prices of UK-focused recruiters this morning.


Mitchells & Butlers (MAB) also report their Christmas trading today. To me the figures look strong overall, but as they point out, food was particularly strong and so of less benefit from wet-led groups like Revolution Bars (RBG).

Note: M&B are probably the only company on the stockmarket I can legally recommend buying, but not of course as a investment. For £10-£20 (the price of one share plus dealing costs), you get twelve 20% off vouchers every year to use in their various chains when buying food, but make sure you broker will pass the perk on.

7:59 cut – SHOE, MPAC

Shoe Zone (SHOE) – FY Results

Shoe Zone was hit by a mild profits warning in August which chimed with the general investment perception of doom and gloom on the high street leading to large initial share-price falls and subsequent drifting. However the trading update in October suggested trading had stabilised and I chose this moment to buy back in. Post-period there was concern over the impact of political uncertainty but some optimism following Next’s January update.

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7:59 cut – Next plc (NXT)


I wouldn’t normally think too much about, let alone write about FTSE 100 companies because it is very difficult to get an edge over other market participants in companies of this size. While for a company like Wey Education (which, incidentally, currently has effectively no broker coverage) there are fewer than 10 people who have have gained as much knowledge and insight into the company as me (which is not to say my conclusions are correct), with Next plc I probably rank somewhere in the 1000s and even with a lot of effort would find it very difficult to get inside the top 100.

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7:59 cut – STAF, MMH, DSG

Due to the number of companies reporting important news some sections are briefer than normal.

Staffline (STAF) – Further Issues

Staffline today throw their Finance Director under the bus following misstatement of FY 2018 profits, report a further deterioration in trading across both their businesses, confirm covenants will be missed in December and signpost of the sale of their PeoplePlus subsidiary.

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7:59 cut – RCH, RGD

Reach (RCH) – Trading Statement

Yesterday’s dip in the share price of the former Trinity Mirror business does not augur well for today’s trading statement. The company usually updates in mid October and it is now seems likely that they were delaying because trading was more or less in-line and they were awaiting to be able to report something concrete about the discussions to purchase the former Johnson Press titles.

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7:59 cut – CRL

Creightons – H1 Results

Creightons is particularly fun for investors because they have no broker forecasts and guidance is generally limited to the content of their excellent results and other presentations held during the year. Furthermore, the share price often increases after such presentations where the manifest strength of the management team and focus of their vision are a sight to behold.

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