BLOOMSBURY
DISCOVERIE GROUP
(BMY) 350P
(DSCV) 854P
Gain to date: 23.3%
Gain to date: 42%
Original entry point: Buy at 283.84p, 4 February 2021
Original entry point: Buy at 600p, 10 December 2020
WHEN WE added publishing group Bloomsbury (BMY) to our Great Ideas list in February the company had already enjoyed a strong share price run. Our view that the lockdown-inspired boom in reading would continue has been borne out. Results for the 12 months to February 2021 were ahead of estimates on almost every level with sales increasing 14% to a record £185.1 million and pre-tax profit up 22% to £19.2 million. What’s more, the company noted a strong start to the current financial year and said it expected revenue to be ‘ahead’ and profit to be ‘comfortably ahead’ of expectations. Thanks to its strong financial position and cash generation, Bloomsbury was able to not only increase the final dividend by 10% to 7.58p, but also propose a special dividend of 9.78p. Numis upgraded its February 2022 earnings per share forecast by 13% from 15.7p to 17.7p which puts the shares on a price to earnings multiple of 19.8 times. Analyst Steve Liechti said the £8.5 million acquisition of Head of Zeus, announced alongside the numbers, ‘looks an interesting UK consumer publishing bolt-on’. 360
SHARES IN SPECIALIST electronics maker DiscoverIE (DCSV) continue to power ahead following an increase in earnings guidance in April and a positive pre-close trading update at the start of this month. Thanks to the firm’s focus on specific markets, sales for the full year were down just 3% as orders saw a strong second-half rebound, while organic revenue growth turned positive in February and March. Demand was resilient in Asia, especially from customers in the renewable energy sector, and while US demand was lower as Covid led to slowdown in spending in the transport sector, president Biden’s huge infrastructure programme has prompted customers to increase their orders again. The firm made another bolt-on acquisition in the US high-performance switches and sensors market, yet thanks to strong cash generation still reduced its gearing and increased its full year dividend. The current financial year has started with a record order book which continues to grow faster than sales, providing excellent visibility, and margins continuing to improve thanks to cannier purchasing and tight control of operating costs. Analysts at Peel Hunt and Shore Capital raised their pre-tax profit forecasts again for the next two years, while Stifel – whose forecasts were already ahead of consensus – expect to have to raise theirs along with the consensus. 900
DISCOVERIE GROUP
BLOOMSBURY PUBLISHING 750
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2020
SHARES SAYS: We remain positive on the shares. [TS] 14
| SHARES | 10 June 2021
2020
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2021
SHARES SAYS: The stock is benefiting from mega-trends in transport and renewables and we remain fans [IC]