Author: rogerwlawson

Saving Tax and Protecting Income from Inflation

To follow on from my comments on the Chancellor’s Statement and the changes to dividend and capital gains tax, it emphasises the importance of minimising tax liabilities.

It is important for both income and capital gains to hold your shares in ISAs or SIPPs which makes them both tax free. If you have maximised your holdings in ISAs and SIPPs then if you want tax free dividends one option to look at is Venture Capital Trusts where dividends are tax free and you also get tax relief on investment in new shares. Or you can simply buy them in the market where you won’t get the initial tax relief but will avoid the prompt decline in your investment value as they normally trade at a significant discount to NAV – currently between 5% and 12% for generalist VCTs.

The dividend yields on VCTs are also typically quite high mainly because they tend to only maintain capital values while converting capital profits into dividends. The AIC web site can provide a summary of all VCTs, their dividends and past price performance.

VCTs have not been performing well of late as their focus on unlisted and AIM shares in small companies which are out of market favour has damaged their share price performance after a period of excess exuberance particularly in technology company shares. But now valuations in small companies have become more reasonable so it might be time to consider more investment in VCTs.

Investing in ISA and SIPPs do not of course give you cash dividends to spend but you can put money into ISAs and then take out the cash accrued from dividends tax free, except for Lifetime ISAs.

From my past investment in VCTs I now have a substantial proportion of my income tax free. But VCTs and their taxation are complex subjects so make sure you understand them and/or take professional advice on them. My comments above are based on my understanding of the position but I do not guarantee that it is correct.

As regards minimising capital gains tax one solution is simply to not sell holdings that are showing a profit, or offset them with sales of holdings showing a loss.

Inflation protection

The other big issue raised by the Chancellor’s statement was how to protect a portfolio from the ravages of inflation. A half-year report from Value and Indexed Property Income Trust (VIP) this morning shows how they are providing that. For example they say: “VIP’s dividend per share has risen every year since 1986 when OLIM’s management began. It has risen by 932% over the 36 years, against the Retail Price Index rise of 232%. The medium term dividend policy is for increases at least in line with inflation, underpinned by VIP’s index-related property income.”

The net asset value per share fell during the half year but this is explained by these comments: “….rising bond yields and slower rental growth force property valuation yields up and capital values down. All sectors will be affected, with offices declining further, retail giving back its recent gains and the industrial sector suffering worst in the short term as it had become the most overheated. With consumer confidence at an historic low, and mortgage rates rising rapidly, stagflation may be here to stay, for at least as long as the war in Ukraine lasts.

Property transaction volumes have slowed down markedly since the summer, especially in the previously strongest sectors such as industrials and retail warehousing, with many sales only going through after agreed prices have been “chipped” by buyers and many more properties having to be withdrawn from the market unsold. Buyers now are few and far between as they wait to see how far yields move out. Property unit trusts have become forced sellers to meet withdrawals, proving yet again that open-ended vehicles are the wrong way to invest in property. Some pension funds will also need to sell after they were caught short of cash to meet margin calls on their dangerous LDI (Liability Driven Investing) schemes.

Land Securities has just sold a prime long-let London office at 9% below its March valuation, while the market for older or secondary offices has fallen off a cliff, with some now virtually unlettable and unsaleable where they do not meet environmental standards. The deep “brown discount” for properties in all sectors with non-compliant Energy Performance Certificates (EPCs) is the clearest evidence so far of the growing market impact of ESG. Two-thirds of car showrooms, for example, are currently estimated to have non-compliant EPCs.”

Property REITs are another sector out of favour at present for those reasons but longer term I would expect them to provide some protection against inflation.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Chancellor’s Autumn Statement

This morning Jeremy Hunt delivered his Autumn Statement. As expected taxes are up and Government spending is down, but exactly where the latter cuts, which are estimated to be £30 billion, will fall is not clear. That is particularly so as the NHS and Social Care are getting £8 billion more and schools £2.3 billion more.

Infrastructure spending remains also with Sizewell C nuclear power station going ahead and HS2 to Manchester plus other rail projects. Comment: a great pity that HS2 has not been canned which would save many billions of pounds.

As a retired taxpayer with significant dividend income and capital gains in some years (not this one I hasten to add), the tax increases are not as bad as they might have been. The pensioners “triple-lock” remains in place when my feeling is it should not have been retained, while with a lot of our assets in ISAs and SIPPs the damage won’t be too bad.

There is also continued support worth £26 billion for energy bills with £300 going to pensioners and the energy price guarantee will be extended past April 2023.

The big personal tax increases will come from a reduction in the threshold for the higher rate of 45p to £125,140 while income tax, inheritance tax and National Insurance thresholds will be frozen for a further two years until April 2028.

The tax-free dividend allowance will be reduced to £1,000 next year and to £500 from April 2024. The exempt amount of capital gains will be reduced to £6,000 next year and to £3,000 from April 2024, but capital gains tax rates are otherwise unchanged so there should be no rush to sell assets to realise gains. 

A rise in the Energy Profits Levy and a new tax on the extraordinary profits of electricity generators will raise £25 billion. The former will hit oil/gas producing companies unless they can offset it with investment allowances for developing UK oil and gas extraction. Comment: I hope Just Stop Oil take note of this poke in the eye and give up their campaign.

There will also be an impact on renewable energy generators with a 45% levy on “extraordinary profits” – defined as electricity sold above £75MWh.These changes seem to have been well anticipated and the prices of renewable energy trusts (wind farms etc) not significantly changed so far today at the time of writing while a UK gas producer I hold has risen.

It is always unfortunate though that the Government is making legislation that changes the likely future profits of these companies on which their long-term business plans, and my investment decisions were based.

There is also some jam for those living on means tested benefits to help with the cost of living. Benefits will rise by the rate of CPI meaning they will go up by 10.1%. There will also be £6.6 billion provided to improve the energy efficiency of houses and business premises which is a rational move when the UK compares very badly with similar European countries in insulation of buildings and construction quality.

The Chancellor has also announced that electric cars will no longer be exempt from vehicle excise duty from April 2025. This is a sensible move as the lack of tax on them was undermining the tax base and that incentive will no longer be necessary.  

In conclusion I suggest these tax/spend changes are a reasonable compromise and seemed to have had minimal impact on the stock market. I quote from the Chancellor: “The furlough scheme, the vaccine rollout, and the response of the NHS did our country proud – but they all have to be paid for. The lasting impact on supply chains has made goods more expensive and fuelled inflation. This has been worsened by a Made in Russia energy crisis.Putin’s war in Ukraine has caused wholesale gas and electricity prices to rise to eight times their historic average.”

Raising taxes won’t be liked by some Conservative MPs but I think they will accept the changes as necessary. The key is to ensure that spending cuts actually happen and that there is no back-sliding on that commitment.

Autumn Statement: https://www.gov.uk/government/news/chancellor-delivers-plan-for-stability-growth-and-public-services

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Market Trends, WeWork, Cryptocurrencies, Passive Saturation

Last week was a remarkably one for my stock market portfolio. Share prices were up on almost all my holdings. This was no doubt sparked by good news from the USA – inflation seems to be under control with CPI falling to 7.7%, and the war in Ukraine is looking up as Russia withdrew from the west bank of the Dnipro River. Stalemate in the latter war is looking increasingly likely which may encourage both Russia and Ukraine to reach some accommodation.

I also get the impression that stocks were being bought back in a panic after previous sales as they fell sharply in previous months. This particularly affected less liquid small cap and AIM stocks.

But this is surely only temporary relief from the gloomy economic prognostications. Interest rates in the UK still need to rise further as inflation is still high and real interest rates still negative. Political stability may help over the next few months but it looks like we are all going to be significantly poorer from aggressive tax rises. This will not help the UK economy one bit.

I watched an interesting TV documentary on WeWork yesterday. WeWork was essentially a company that rented out office desk space, i.e. it was a property company but ended up being valued as a high flying technology business valued at a peak $47 billion before it crashed. Led by Adam Neumann as CEO in a messianic style it developed into a cult which became further and further detached from reality. As profits were non-existent they redefined the word profit.

It’s a great example of how investors can be suckered into backing dubious companies led by glib promoters simply due to FOMO (fear of missing out). There is a good book on this subject entitled “The Cult of We: WeWork and the Great Start-Up Delusion” which I have ordered and may review at a later date.

Cryptocurrency exchange FTX became bankrupt last week. At the end it looked like a typical “run on a bank” as folks rushed to take their money out. FTX reportedly had less than $1bn in easily sellable assets against $9bn in liabilities before it went bankrupt. This has also affected other cryptocurrencies as traders take their money off the table.

Can cryptocurrencies survive? Only if backed by the state I would suggest. I am reading an interesting book – the Travels of Marco Polo which covers his time spent in the Mongol empire including China circa 1300. It describes how paper money was widely accepted in the Mongol empire which covered most of Asia at the time. But it was backed by gold or silver for which it could be exchanged. One advantage of their paper money was if you wanted a lower denomination note you could simply cut up a larger one. Paper currencies do rely on public confidence which is why state backing is so essential and also confidence that holdings are not going to be devalued by excessive printing of more money. Cryptocurrencies have tackled this issue in more than one way including the need for large power consumption to create new coins. But the whole structure still seems unsound to me.

An interesting article in the Investors Chronicle this week covered the subject of passive investing under the headline “Passive Saturation”. There has been concern expressed for some time that a high proportion of the stock market is held by index tracking funds that simply follow the herd. This might magnify trends and not relate to the reality of fundamentals in the companies they buy and sell. This was previously not thought to be a problem because the “passive percentage” of the market was estimated to be only 15%. But a new academic report suggests the real figure is more like 38%.

A very high passive percentage means that stock pickers can do well, and better than the indices as they ignore trends and look at the fundamental merits of companies. I prefer actively managed funds even if you do pay more for them in charges. Funds that rely solely on momentum may have done well historically but they are likely to exaggerate trends both up and down and the higher the percentage of the market held by passive funds, the more dangerous this becomes.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Voting at BHP and Bioventix, and Cryptocurrency Rout

The results of the Annual General Meeting of BHP Group (BHP) have been announced. The most significant item was the rejection of an amendment to the constitution by 90% of voters. This was a resolution requisitioned by Members and would have enabled shareholders to dictate operational policies on such matters as environmental issues to the directors. It was rightly rejected as removing powers from directors to manage the company in the best interests of the company is unwise.

You can read the speeches given at the AGM here: https://www.londonstockexchange.com/news-article/BHP/bhp-group-2022-agm-speeches-and-presentation/15709454 . There is a big focus on changing the culture of the organisation.

I also received the Annual Report and a proxy voting form for the AGM of AIM listed Bioventix (BVXP) today. Thankfully their share registrar, Share Registrars Ltd, have now implemented a simple and easy to use electronic proxy voting system.

I only voted against the share buy-back resolution as I can see no good reason to use surplus cash in that way rather than paying a special dividend. Share buy-backs are rarely justified and depend on the directors’ view of the value of shares which is often wrong.

I am glad to see that the cryptocurrency markets are suffering a severe bout of financial indigestion with exchange FTX in financial difficulties and Bitcoin prices back down to where they were in 2020. Mining company Argo Blockchain (ARB) listed on AIM also appears to be in difficulty.

I’ll repeat what I said in January 2021 on why I won’t be investing in Bitcoins: “There is no intrinsic value in a Bitcoin. With company shares the intrinsic value may be somewhat uncertain and share prices subject to the emotions of investors but there is at least a way to determine the value by looking at the discounted cash flows generated by a company. The future cash flows help you to determine the current value. But with cryptocurrencies there are no associated cash flows. No dividends paid out and no profits generated directly from the assets as with company shares.

If you buy cryptocurrencies you are simply buying a “pig in a poke”.

Roger Lawson

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Supermarket Income REIT Presentation

I watched a webinar from Supermarket Income REIT (SUPR) yesterday on the Investor Meet Company platform. This is not a company I currently hold but I may consider investing in it even though it is in the currently deeply unfashionable sector of commercial property trusts.

They have a focus on omni-channel supermarket properties and 80% of their leases are indexed to inflation with a WAULT of 15 years. They have hedged 100% of their debt exposure to 2026 at 2.6%. They claim it is a defensive, counter-cyclical company with a low LTV.

80% of their portfolio is leased to Tesco and Sainsburys and they have just established a new ESG committee, but who hasn’t?

Their indexed leases have caps of about 4 to 5% on about 5% of their portfolio.

The presentation was eminently clear with good slides.

There is also a recent report published by Edison on the company.

The current discount to NAV is 10.6% and the dividend yield is 5.8% according to the AIC so it is not as cheap as some REITs at present. But that may be because of the defensive nature of the business (supermarkets are unlikely to be affected much by the recession as people have to eat) and the historic good performance figures over 5 years.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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We Are All Doomed…..Maybe, and More Green Washing from Up Global

The media reports on COP27 suggest we are all doomed as it is unlikely that we will keep to the target of 1.5 degrees of global warming. This is an unduly pessimistic outcome. A rise in temperature can actually be beneficial in many parts of the world, if damaging in others.

It is certainly sensible to try and reduce carbon emissions in the long-term but there needs to be a cost/benefit justification and a focus on countries that are the biggest carbon emitters – namely China, India, USA, and Russia. For the UK to aim for net zero makes no economic sense.

Meanwhile the UK Government has committed £11.6 billion to a “climate fund” to support a mix of energy transition, climate financing and forest and nature preservation measures. Some of these may be worthy objects but can the country really afford many billions on such projects when our own population is suffering from shortages of food and heating?

There is also a demand for “reparations” for the damage that has been caused by high carbon emissions that has resulted in floods and droughts. That is debateable to begin with and it ignores the benefits brought to the world by the cheap energy available from oil and gas. That has increased food production and enabled the world population to increase to a level that would otherwise have starved. See the book “How the World Really Works” by Prof. Vaclav Smil for the evidence on this subject. Reparations should certainly therefore be rejected.

I am certainly not supportive of the Just Stop Oil campaigners who are simply irrational and I will continue to invest in oil/gas companies but not in coal mining companies while I have been investing in alternative energy funds. Burning coal is a bad option in comparison with generating electricity from wind farms, hydro-electric schemes, solar arrays and other projects.

But we do need to reduce the world’s population if we are to improve the environment which is an objective most of the climate campaigners simply ignore.

Companies are of course jumping on the bandwagon of “green-washing” by issuing policy statements that support ESG policies. The latest example in my stock market portfolio is from Up Global Sourcing (UPGS) who announced today their ESG strategy. This includes a commitment to net zero Scope 1 and 2 and emissions by 2040 and net zero Scope 3 emissions by 2050. Other commitments are:

  • 50% less plastic packaging by 2025 (compared to a 2019 baseline), with the remaining plastic packaging to contain an average of 30% recycled content and be 100% recyclable or reusable.
  • Gender balance in leadership roles by 2030.
  • 40% of Board representation to be female by 2025.
  • 20% of UK workforce to be made up of ethnic minorities by 2030.
  • 60% of UK workforce to be recruited from the local community by 2030, versus 47.2% % today.

Simon Showman, Chief Executive of the company commented: “Striving to do the right thing has always been core to everything that Ultimate Products does”. Surely we can do without such platitudes. As regards the stated objectives it’s worth bearing in mind that the directors making such commitments will likely be long gone by the dates promised. Am I a cynic or just a realist?

Meanwhile the company is part of the global economy with production of the products it sells in the Far East (87% from China) and being shipped thousands of miles via polluting ocean-going vessels burning oil.

If that makes economic sense then I am happy for them to carry on but we could do without the “holier than thou” commitments.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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More News on Globo Case

Globo was a company subject to a large fraud back in 2015 which caused the company to collapse and investors lost everything. Shareholders might have thought that any legal proceedings were dead but not so. The FCA have published a note on how they have been progressing the case which is here: https://www.fca.org.uk/news/press-releases/fca-progresses-market-abuse-claim-against-globo-plc-chiefs

In summary despite the Greek courts rejecting extradition requests to face criminal charges against the former CEO and CFO, the FCA is now progressing a civil case and the High Court has rejected an application to strike out the proceedings.

As a former shareholder in Globo it is good to hear that the case is still being pursued although I did not lose money on my shareholding having decided that there were too many unexplained and unaccountable problems being reported and therefore selling before it went bust. But many other shareholders were not so lucky.

After 7 years it would be good to have some conclusion on this example of how fraud can fool auditors such that the reported accounts were a complete fiction.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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JPMorgan Global Growth AGM and Twitter Fees

Yesterday I attended the Annual General Meeting of JPMorgan Global Growth and Income Plc (JGGI). This is a global investment trust as the name implies and the meeting was a “hybrid” AGM with a number of shareholders present in person but I attended on-line. Questions could be posed on-line but voting was only via proxy in advance for those attending on-line. I found this a perfectly satisfactory arrangement.

The meeting commenced with a presentation from the managers after brief words from the Chairman about the recent merger of the trust with the Scottish Investment Trust which almost doubled the size of the company. The result will be lower management fees.

The trust is a “high conviction, bottom-up stock selection” investor with 80% active share, i.e. it is definitely not a closet index tracker. As one investor pointed out, this results in a high stock turnover as they are sensitive to changes in the current valuations of companies.

The annualised return since 2008 has been 2.4% ahead of the MCSI All Country World Index per annum but they slightly underperformed last year. But it has a good long-term record and usually trades at a premium to NAV.

The manager emphasised that they aim to own the “best” companies but talked about the 185 different data points they measure on companies re ESG factors – a very tiresome subject that is now promoted by all fund managers. I just want them to make money!

There were some negative comments on Apple, Tesla and Lyft (they prefer Uber). They like Amazon, NXDP, LVMH etc where they are overweight.

There were a few questions from the audience. One was is the dividend covered by earnings? The answer was NO. The justification given was that it is best to invest in the best companies and not worry about the dividend cover. Would it not be best to reinvest the profits? Most investors prefer a reasonable dividend and the company has retained profits from capital that it can pay out.

All resolutions were passed based on the proxy counts before the meeting.

In summary this was a useful meeting which was well managed. For those who want good international coverage and like active management this is a share worth considering.

I shall be tweeting about this report of course. Also yesterday Elon Musk suggested that he would introduce a subscription service on Twitter at $8 per month which would give users some priority in search which he considered essential to defeat spam and reduce the number of adverts they see. There would also be verification of users who subscribed. In reality he is changing the business model from total reliance on advertising.

I am all in favour of those changes. More moderation is required on Twitter and if charging helps to reduce the number of garbage and abusive comments then so much the better.

Musk is also planning to halve the number of Twitter staff. It’s not many companies that have so many non-essential staff that half can be fired. It will be interesting to see the outcome of these changes for investors in Twitter.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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The Economy, Politics and Financial Fraud

With not a lot happening in my stock market portfolio today, I have some time to comment on wider issues. With the USA Federal Reserve raising interest rates and the Bank of England doing likewise, there is clearly a commitment to tackle inflation aggressively. This will undoubtedly put a damper on the economy in due course and lead to a recession in the UK as has been widely forecast anyway.

Is raising interest rates wise at this time? I think it is because the era of cheap money (i.e. when it was possible to borrow money at less than the rate of inflation) should never have been permitted.

We still have very low unemployment rates from a historic perspective while the Government is still handing out money in the form of energy support cash which it has to borrow to fund. The Government also remains committed to the “triple-lock” on state pensions to protect the elderly such as me which I find simply unjustifiable when the rest of the population have no such protection from a rising cost of living.  

The concept of a “balanced budget” where taxation matches Government expenditure has been forgotten and the excuse of keeping the economy afloat in the face of the Covid epidemic has been used to justify excessive spending.

Meanwhile the cost of asylum seekers and illegal immigrants is enormous with as many as 1 million illegal immigrants in the UK. Nearly £1.3 billion per year is now being spent housing asylum seekers, with costs likely increasing as dinghy arrivals rocketed over the summer

The rise in small boat crossings in the English Channel is driving the migration figures with at least 40,000 arriving that way in the current year and claiming asylum. A large proportion are young men from Albania who are economic migrants. See this BBC analysis for the data: https://www.bbc.co.uk/news/explainers-53734793

The Government seems incapable of stopping this “invasion” as the Home Secretary recently called it despite the UK having historically a strong navy. In reality the UK navy has spent billions of pounds on large aircraft carriers (£7.6 billion for two) which are white elephants in modern warfare while it has insufficient border patrol vessels or is unable to use them effectively.

Other parts of the UK economy are in a parlous state with the transport network being horribly congested while as much as £45 billion is being spent on Phase 1 of HS2 alone – another expensive white elephant. At the same time terrorist organisations aiming to achieve their objectives by undemocratic means such as “Just Stop Oil” are allowed to disrupt the transport network and divert police operations at enormous cost.

The NHS is at breaking point with costs rising but simply having enough staff, hospital beds and ambulances seems to be incapable of being provided.

The level of fraud and crime in general is rising and it’s worth reading the recent report of the Parliament Justice Committee on fraud in the UK. Here are some brief extracts:

“Justice response inadequate to meet scale of fraud epidemic. Prioritising traditional forms of crime has left the justice system ill-equipped to deal with continuing rise in fraud, the Justice Committee has found.  

The Committee finds that the level of focus from policing is inadequate to deal with the scale, complexity and evolving nature of fraud. Only 2% of police funding is dedicated to combatting fraud despite it accounting for 40% of reported crime. Lines of accountability are confused with responsibility split between local and national forces. Action Fraud has proven itself unfit for purpose and while a replacement reporting system is expected in 2024, victims should not have to wait this long to see improvements in the service they receive.  

In addition to a lack of investigation of fraud crimes, there is also a lack of prosecution. The ONS estimates that there are an estimated 4.6 million fraud offences each year, but in the year ending September 2021 just 7,609 defendants were prosecuted for fraud and forgery as the principal offence by the CPS.  

Chair of the Justice Committee, Sir Bob Neill MP said:

Fraud currently accounts for 40% of crime and the figure is growing. People are losing their life savings and suffering lasting emotional and psychological harm. But the level of concern from law enforcement falls short of what is required.

We need the criminal justice system to have the resources and focus to be able to adapt to new technologies and emerging trends. The current sense of inertia cannot continue, we need meaningful action now.”

There is currently an epidemic of fraud in England and Wales. The number of cases has grown steadily over the past decade and accelerated rapidly to unprecedented levels during the pandemic. This trend has shown no sign of abating as the country returns to normal life. Around 875,000 cases are reported each year, however the Office for National Statistics has estimated that the real number could be as high as 4.6 million. 40% of recorded crime is now fraud and is calculated to cost society £4.7 billion a year”.   

It’s altogether a quite depressing picture of the UK economy, and of our legal and democratic systems that seem unable to respond to these problems in any reasonable timescale. Meanwhile UK politicians seem happy to focus on trivia such as woke issues.

Even the weather has turned bleak and life is thoroughly downbeat.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Market Conditions, Fonix Mobile Webinar and Aston Martin

The stock market seems to have calmed down now that we have some political stability in the country, it seems we might not run out of gas this winter after all and may be able to keep the lights on. But small cap companies are still very depressed with stock market investors preferring to put any spare cash into big or mid-sized oil/gas companies. Big miners are still holding up reasonably well because of the high dividends they are paying despite the gloom over the prospects for consumption in China.

I am not trying to buck the trend and have even bought some BP, Shell and Rio Tinto shares recently. I feel that all those new speculators in small cap company shares that joined in during the boom times have departed the market and are not likely to return soon. Once bitten, twice shy may be their motto.

I reduced my holdings in smaller companies as their share prices declined but I still hold some of them. One such is Fonix Mobile (FNX) who gave a presentation of their annual results on the Investor Meet Company platform today. I’ll briefly summarise what they do:

The company specialises in carrier billing systems, i.e. charging fees to your mobile phone as an alternative to credit card payments (75% of revenue), and in text messaging services (22% of revenue). They are experts in core verticals such as media, charity donations and online gaming but any transactions of less than £40 qualify so can be used also for such things as car parking payments.

What do I like about this company? The positives are:

  • Steady growth in revenues and profits in the last 4 years (they listed on AIM in October 2020).
  • High return on capital.
  • Pay a decent dividend.
  • High recurring revenue and high customer retention.
  • Focus on internally generated growth not acquisitions.
  • Limited foreign adventures.

They do have an international development strategy but that’s mainly focused on Ireland at present with some activity via partners in Germany and Austria. They are also evaluating other markets but they suggest they have room to grow in their existing markets. They are mainly investing in product development and sales/marketing. They only have 40 staff at present with about 15 in product development.

The management presented well and a recording is available of course.  Note though that the shares are tightly held and there is limited trading in the shares with a bid/offer spread of over 2.5%.

There are other companies in the carrier billing market, e.g. Bango and Boku, but the focus on certain verticals in the UK clearly has enabled them to build a solid niche.

I see Aston Martin (AML) published another poor set of results this morning – a year to date loss of £511 million and debt rising to £833 million although claimed revenue was up. The company blamed “supply chain challenges and logistics disruptions”. It still looks a complete basket case to me and I suggest only car aficionados should consider investing in it. When the anticipated recession really bites will folks be buying “ultra-luxury” cars as they call them? My only slight interest is that after holding it for 9 years my Jaguar XF will soon need replacing – a big bill today for some maintenance work on it. Let me have your suggestions for new petrol or hybrid luxury vehicles, or perhaps I will be able to pick up a low-cost Aston Martin when they near bankruptcy?

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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