Professor Glen Arnold

Connect Group (LSE:CNCT) has one business generating an operating profit north of £36m.  For a £71m market capitalisation company that is a substantial amount. And this operating profit, from the Smith News newspaper and magazine distribution business, has been consistently high (2014: £40.8m, 2015: £23.2m, 2016: £34.1m, 2017: £36.1m, 2018: £25m, 2019: £36.3m). Smiths News […]

In these febrile times it worth remembering some wise words of Warren Buffett concerning the value investor’s attitude to falling share prices.  Truly disciplined value investors celebrate when shares fall in price.  I’m currently writing the first chapter of third volume of The Deals of Warren Buffett which is on the purchase of shares in Wells Fargo […]

Conventional earnings numbers generally do not adequately allow for the fact that with some companies profits cannot be taken out if the company is to maintain its unit volume of output, spend enough to maintain its economic franchise (e.g. on working capital, new machinery, marketing, service quality, employee training, etc.) and invest in all value […]

Today we’ll look at return on net tangible assets, and approach the valuation of Character Group (LSE:CCT) from this angle. To start with there are a lot of numbers – to show my workings – but this all boils down to an exceptionally high average Return on Net Tangible Assets of 87%. Profits, assets and […]

Character Group (LSE:CCT) has recently spread its wings by buying a controlling stake in a company which operates a similar business model in Scandinavia.  This could be the start of a trend, where more European toy companies are purchased by Character being motivated by the potential of synergies in attracting brand owners by offering a larger […]

Character Group (LSE:CCT) has an impressive profits history, but is it financially stable and does it produce high cash flow? Balance sheet data £m   Feb 2019   Aug 2018   Aug 2017   Aug 2016   Aug 2015   Aug 2014 Inventories 11.2 10.9 9.0 10.3 9.0 8.9 Receivables 12.7 25.6 25.8 25.1 15.5 […]

The Character Group (LSE:CCT) has the same leaders today as when created in 1991. The three founders are Richard King, who is now Chairman; Joseph Kissane, now Managing Director of the main subsidiary, and; Kiran Shah, now Joint Managing Director and Finance Director.  Jonathan Diver joined in 1991 and was quickly promoted to Marketing Director. […]

I’ve purchased shares in the toy designer and distributor Character Group (LSE:CCT) at 350.6p (market capitalisation is £3.506 x 21.3m shares = £74.7m). These shares were trading at £5.80 as recently as August.  The fall was caused primarily by the merger of the UK’s Entertainment One with the US toy company Hasbro. The connection here […]

It’s important to examine MS International (LSE:MSI) with an income metric better than conventional profits after tax, which fail to properly consider the annual cash flows which end up being spent on yet more fixed assets and in working capital items (inventory and receivables in particular) just to support the current strategic market position, and […]

MS International (LSE:MSI) has a very strong balance sheet and decent profits history.  But what about the relationship between the two?  Given the large amount of net assets devoted to the operating business, does it generate a good rate of return on the money invested? With a Warren Buffett-style investment I expect to hold “forever”.  […]