Thursday, August 16, 2018

B&S Group seen through Benjamin Graham glasses

Rough notes just before going to sleep.

"Distribution of consumer goods" based on taxfree imperium, parallel/grey import, etc.

B&S Group is an interesting holding of 3 companies with a central back office. The Annual Report is worthwhile reading:
The founder Willem Blijdorp is a cowboy and understands how he makes money and doesn't mind explaining it. He still owns 51% of the shares after the IPO. No kids? The CEO since 2004 Bert Meulman has an HR focus on his own team, promote from within, longterm loyalty, slightly resembles Fastenal?

84 million shares, 30% sold in the IPO at EUR 14,50 a share, the price dipped to around EUR 13 and is now at EUR 16. Missed the IPO because of two other more "sexy" companies IPO-ing in the same week.

Earnings EUR 1 per share? x 15 = EUR 15, but business is going well, earnings are increasing and profits can be re-invested in robot DCs and improved software. Also expansion to other countries, airports.

Book value: 242m equity / 84m shares = EUR 2,88 book value per share (but high return on equity)

Current Assets EUR 500m / Current liabilities EUR 293 = 1,7 = good

Long-term debt only 28m compared to Net Current Assets = 500-293 = EUR 210m

Sales: EUR 1 500m focus on Gross Profit EUR (but now GM% focus due to financial advisors? Not a good sign)

Compounder checklist: Chuck Akre 3 legged chair

1. Great business; Check great understanding of what they are doing, >30% ROCE

2. Great management: Check, shareholder friendly?

3. Ability to re-invest profit: Check

Comments, questions or E-mails welcome:

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