UK Edition
Questor Inheritance Tax Portfolio: good progress overall – and a huge gain from one holding
Today we publish updates on some of the Questor Inheritance Tax Portfolio’s holdings and look briefly at how the portfolio as a whole has performed; we will publish a full performance table within the next few weeks.
If you had invested in all our recommended stocks at the price at which we tipped them you would have made a gain of 3.1pc and outperformed the FTSE 100 by 2.8 percentage points. This is despite the total loss on our Conviviality tip in March.
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The portfolio now consists of 20 Aim-quoted shares, which should be free from death duties if held for two years.
Update: Dart Group
Shares in Dart, the company behind Jet2.com, jumped by 35.1pc yesterday after it announced a 38pc rise in sales to £2.4bn and a 49pc increase in profits before tax to £134.6m for the year to March 31. It is the portfolio’s best performer, with a 48.3pc gain.
The firm said the rise in profits reflected “continuing strong demand” for flights and holidays and a £20m gain on foreign exchange. The board has recommended a final dividend of 6p, which would take the total for the year to 7.5p – a 42pc increase compared with the previous year. Hold.
Update: Craneware
Craneware, the supplier of hospital software, has been our second-best performer: the shares have gained almost a third since we added them to the portfolio in January.
On Tuesday the company published an upbeat trading statement for the year to June 30. It said underlying new sales had roughly doubled, thanks in part to a significant new contract signed at the end of the year with a large healthcare provider network in America.
The group said it expected to report increases of about 16pc in revenue and 20pc in adjusted profits on the “Ebitda” measure, extending its run of organic double-digit growth.
Peel Hunt, the broker, said: “The company continues to be highly cash generative, with the cash balance returning to 2017 levels of $53m (£40m) despite it having returned $15m to shareholders.”
The broker raised its price target to £25; the shares closed last night at £23.45. Hold.
- Questor archive: telegraph.co.uk/questor
Update: Majestic Wines
Majestic announced results for the year to April 2 last month. Thomas Moore, a fund manager at Aberdeen Standard Investments, described them as “encouraging”, with profit before tax rising sharply to £17.2m from £12.9m the previous year.
“The highlight was sixfold growth in profits at Naked Wines [the online arm] as revenue from repeat customers increased by 17.6pc, more than offsetting the 16.7pc decline in revenue from new customers,” he said.
“Majestic’s bricks and mortar retail business saw flat profits as it ran hard to achieve sales growth to offset margin pressure caused by weak sterling. Strong cash generation allowed management to pay down debt while growing the dividend.”
He said Majestic was “a rare success story in the retail sector, with a highly entrepreneurial management team”, adding: “The stock may not look cheap on headline multiples, but the evidence is mounting that management is on track to deliver on its ambitious targets and the valuation remains inexpensive on a sum-of-the-parts basis.” Hold.
Update: IMImobile
This “cloud-based” supplier of telecoms services published preliminary full-year results on June 27. Turnover rose by 46pc to £111.4m and “adjusted” profit before tax by 12pc to £10.1m. Profit before tax on a statutory basis fell by 48pc to £2.7m because of acquisition-related costs.
Tony Dalwood, of Gresham House, whose holding of the shares prompted our tip, said: “We still hold IMImobile. Our investment thesis was based on profit growth and multiple expansion. We believe it still has significant growth potential and, while the earnings multiple has increased, it remains at a significant discount to multiples paid in private equity deals such as the recent takeover of Link Mobility in Norway.” Hold.