To Stockton-on-Tees to spend the day with Brulines “the leading provider of real-time monitoring systems and data management services for the leisure and forecourt services sectors”. This interesting, but relatively unknown, company floated on the Alternative Investment Market (Aim) in 2006 at 123p – and I have since made 11 separate purchases between 80p and 96p to build up my holding.
James Dickson, the chief executive, has been in the market, too. Last month, he bought 50,000 shares at 84p to take his total holding up to just under 4m shares – or 14 per cent of the company’s £24.5m market capitalisation.
Brulines’ core monitoring and information systems are installed in nearly 20,000 UK pubs – nearly one in every three – covering their drink and gaming equipment. Its fuel equipment is even more popular – being used by 60 per cent of retailers by volume, which should help the division move into profit next year. Overall, recurring revenues across the group now account for 70 per cent of turnover.
I was also impressed with the technology and the obvious enthusiasm of the team which together is helping to generate new opportunities. Whitbread’s Costa and Coffee Nation chains are already clients and Brulines is in negotiation with Visa Europe to provide contactless payment technology in vending machines.
With pre-tax profits forecast to be approximately £4m for the year to 31 March 2012, Brulines’ shares trade on a modest price/earnings ratio of 8 times, and offer a chunky dividend yield of 6.5 per cent.
I believe this is a solid group poised for growth. It is likely to become better known and, I hope, re-rated over the next few years – while paying a nice dividend in the meantime.
However, apart from Brulines, I have done little buying recently. With markets moving upwards, I have not spotted many really attractive opportunities, thus I have confined myself to one or two “add-ons”.
I have held Air Partner, the world’s leading air charter broker, for many years. But, sadly, its share price has too frequently suffered mid-air turbulence! I first bought the shares around the £2 mark in 1999, then sold some at £3 in 2001-2 and some more, from within my personal equity plan, at £11.40 in 2007. They peaked at £14 later that year.
In spite of volatile trading conditions, the company has always been cash positive and, even when issuing a cautious trading statement, indicated cash balances of £13m out of a £28m market capitalisation. I have added more at 280p and 285p for my individual savings account (Isa).
Another “old friend” presenting an attractive buying opportunity was the Leeds-based property company Town Centre. Its interim results last month revealed an overall portfolio letting rate of 97 per cent, so I was delighted to buy the shares at 139p, again for my Isa, at around half net asset value and with a 7 per cent yield. They have recovered well to 170p.
Looking across my other holdings, four hover around all-time “highs” – Delcam, Fenner, Nichols and S&U. But there have been disappointing trading statements from Norcros – thankfully only a small holding – and, more importantly, from Gooch & Housego, following a fall in orders for their industrial lasers.
However, there were good results and much-appreciated dividend increases from Primary Health Properties, publisher Quarto, and agricultural feedstuffs/country/pet stores group Wynnstay. My largest holding, Treatt – the flavours and fragrances company – also reported improving orders in January and February.
John Lee is an active private investor writing about his own investments. He may have a financial interest in any of the companies and trading strategies mentioned
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