Titon Holdings Plc Justice and favour

Hardman & Co Report Report DownloadsKim Jong-un, North Korea’s Supreme leader, has been in rehab and is finally living up to the English translation of his christian names: justice-and-favour. The World is a different place with a Trump/Kim summit pending. South Korea is a different place, too, which is very good news per se and for Titon Holdings Plc (LON:TON) which generated three-quarters of its net profit here in its latest half year.

Result: profit before tax in the half year to 31 March 2018 rose some 15% on a constant currency basis to £1.34m on revenue justice-ed 16% ahead at £14.5m.The dividend was also favoured by 17% to 1.75 pence with cover at 4.1x. South Korea raised its contribution 13% to almost £0.9m and contributed 74% of Titon’s net profit.

Metrics: Return on Net Assets in H1 was 18.9% on an adjusted basis with Capital Turn above 2.0 (we like this ‘un’). Liquidity is summit-less, too, with a Quick Ratio of 1.93; while net cash is equivalent to 16% of net assets. Titon is looking forward to further progress in H2 and a performance in line with expectations.

Forecasts: we have nudged up our profit and earnings forecasts and the UK can be expected to provide favour-able seasonal demand in H2 and, while domestic GDP is below trend, it should justly grow at 1% to 2% p.a. through 2020. In South Korea, ahead of any peace dividend, GDP is set to grow at 2.9% p.a.

Risks: the Korean Peninsula is a dramatically safer place than it was and can build from there. Yes, there is continued Brexit uncertainty at home but Experian is forecasting annual growth in construction of 1.1% in 2018 through 2020 with private housebuilding increasing at 3.0% p.a. Meantime, Titon’s other regions are seed corn for the future. The Group produces both prosaic and truly innovative products which is both a useful combination and affords good reach.

Justice and favour: The unique Hardman UK Building Materials Sector comprises 22 companies with a market value of £8.5bn and our average valuation of 8.7x EV/EBITDA on a trailing 12-month basis. Titon Holdings Plc is in the lower half of the table at 7.7x – despite the third best Total Return to Shareholders of 42% over 12 months; note, too, the Sector TSR average is just 5.3%.

Click to view all articles for the EPIC:
Or click to view the full company profile:
    Share on facebook
    Facebook
    Share on twitter
    Twitter
    Share on linkedin
    LinkedIn
    Hardman & Co

    More articles like this

    Hardman & Co

    Titon Holdings Condititoning

    Initiation of our coverage was 16 March 2016 at 101.5p. In February 2018, the price was 215p and it stayed north of £2 for another year. In fiscal 2019, though, Titon Holdings (LON:TON) weathered a perfect storm most

    Hardman & Co

    Titon Holdings Electiton

    Tis rare that a company reports on the same day as a general election. Okay, Titon Holdings (LON:TON) gestation was the longer ‒ but the conclusions are the same. “It’s over and yet it has only just begun”.

    Hardman & Co

    Titon Holdings Plc You need hands

    Titon Holdings Plc (LON:TON), Failure to applaud is the original meaning of the idiom ‘to sit on your hands’; it originated in the theatre, when an unimpressed audience refused to clap. In the modern lexicon, it means to

    Hardman & Co

    Titon Holdings Plc Good moon rising

    Titon Holdings Plc (LON:TON), Titan is the largest moon of Saturn. It is blessed with a generally smooth surface and few impact craters. It would also look 11.4 times larger than our moon in the night sky. Its nearest

    Hardman & Co

    Titon Holdings Plc My aim is true

    The Platinum-certified album of the same name by Elvis Costello is widely held to be the most impressive debut in popular music history; and it ranks 80 in the greatest records of all time. It was released in