The trading update on Weds was positive about the business, reporting increased activity following the relaunch of NAH tv advertising. The extra good news that eps is expected to be ahead of expectations due to things like good financial management, the release of a provision etc
My take is that the dividend will still be trimmed but not as hard as previously feared. A final of 10.6p if the cut is in line with how the last interim was trimmed ... so annual yield of 8.5% and p/e around 8 while the sp sticks on 184.
The update has not translated into sp movement, like all the good news was already anticipated? Surely not.
Actual financials for 2017 and divi announcement due 20 Mar.
Another chunky increase on an already big stake taken by Independent IT, quite a vote of confidence in the prospects for NAH.
IIT have only recently shown up on my radar, a Baillie Gifford umbrella-mate for smaller cos mostly UK but unhelpfully classed as Global equity .... which has had a spectacular growth in 2017, NAV up nearly 50% thanks to the likes of FeverTree. All for a miserly 0.34% annual charge.
So impressed with IIT might take a chunk in my longer term SIPP alongside SMT as an alternative to SLS ... not a lightly taken decision since I am a Nimmo fan.
Makes me even more confident NAH is heading for a great recovery in 2018 and worth a double up on this news.
longshot - the Bartholomew article and tip was back in 15 Mar 2015 when the SP was mid 260s. In the same article he wrote:
'Globo is an exciting company thats growing fast. Among other things, it enables people to use their own mobile phones for company business in a secure way. Employers get to save money by not buying hundreds of mobile phones for staff.'
One of the biggest cons on AIM, ever.
Those points aside NAHL is a very interesting play - and way below what it could and should be with far more upside than downside potential. I believe consolidation is expected in the sector it operates in - there may be an acquisition soon, or on the multiples it sits on just now it could be a target itself. That said the volumes of late don't indicate anything is about to happen - so maybe the governance there is strong.
With you. Good to have a winner when this week has been a gloomy one. I have a habit of selling up too soon, but I might let this ride a while longer - still like to know why it is gaining! Did they win a big case? These days you expect to see a prompt announcement.
NAH is still an excellent dividend prospect, maybe another 10p next May, and deserves a sp 200p+. We know we have a couple of turnaround years ahead, but these shares have been way oversold. If other investors start to agree then more days like today ...
No RNS to shed any light on the rise. I'm in quite heavily here, and averaged down back in June so this is pleasing to see that I'm out of the red and well into the green now. I followed James Bartholemew's advice in The Telegraph. Also can't see that personal injury is going to go away completely despite the planned reforms and they're reshaping their business anyway - short term pain for long term gains. I've made plenty of bad decisions with shares but I'm a holder on this one as I think the recovery will have legs. And a decent divi too.
I've been out of NAH over a year now and so have been trying to find out why the sp has reacted so badly to the government's proposals and why the share is yielding an incredible 15%. And here it is, from the RNS of 14/3/17:
Along with a short term impact on operating profit, cash generation is likely to significantly reduce in 2017 and 2018 before returning to levels previously achieved. Despite the increased investment and deferred profits, the Board still intends to maintain the Group's policy of 1.5x dividend cover.
So, not back to normal until 2019 and an unsustainable dividend. Add in the uncertainty over the timing of new legislation and it's hard to see a short term catalyst for a rerating. (Strange use of the word 'despite' in the RNS excerpt by the way. Intentionally muddying the waters?)
Took my own advice and added a third small and final stake at 131p.
Even with a dividend dent this is seriously good value, NAH are profitable and here to stay.
Looking at the trades today it appears there have been some serious buys at that level and even higher, as though income seekers consider this trading update to have provided assurance about future dividends.
Never know what to make of "in line with expectations" alongside "expected impact on comparative results" but given the warnings about a decline in PI business maybe eps has taken a hit to say 20p from 25p. I didn't detect anything worse than that, did you?
Other sectors robust, too early to comment on the new tv campaign and the effect of new business links, less worried about government intervention on small claims litigation.
We will learn more when interim numbers are published on 19 Sep when the interim dividend will also be announced c. 6p. Even if that is trimmed and yield is cut to an annual 15p from 19p then NAH remains really good value. More positive signs would make this a strong buy under 200p.
Might be worth adding another slice before it hits 150p, but I am also tempted by news of progress at NANO ... or a punt on both?
PI and so NAH is here to stay whatever the dent which might be caused by changes to curtail minor injury claim litigation. The renewed TV advertising campaign is part of the plan, I wonder how it is going.
Surely scaredycat investor anticipation of any bad news has been way overdone, with p/e under 5 and yield from this free cash flowing business approaching 15%, I have added another slice at 130p.
I'm tempted to add a few at these levels. As you say PI won't suddenly go away, but the market is pricing in the worry that management may not be able to profit under the new regulations. Speaking of which, doesn't this all happen in October 2018 anyway? So revenues this year and most of next could be good. That, combined with the board usually paying out a high and established (is it one third fraction??) of profits as dividend, this year could well see a whacking dividend. Maybe??
Not a pretty industry to invest in, but a high-margin one. NAH looks like a bargain under 200p.
The business seems to be well managed with a sharp eye on costs and is clearly alert to risks to its performance. The market over-reacted to management's cautious view of changes which might curtail short-term cash flow, and has ignored the opportunities which litigation co-financing on fewer high value cases might bring in the longer term. Personal Injury management is here to stay, whether or not we do away with whiplash and raise the threshold for self-litigation in small claims courts.
So I have taken a small slice to start with at 145p this week.
Anyone got any information behind the massive increase in volume and the 25% rise in the share price today ? I cant see anything , but am enjoying the ride having topped up at 130p and now in the blue .
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