Ok, here is the inaugural performance review. The intention is to do these once the quarter is over, but given that I did not publish one last time (as there was too much going on with the website) this would be a one off H1 publication.

On this occasion I will comment on all the stocks in the portfolio (notable events over the period as well as my latest views). Going forward I think I will only be commenting on any changes in view or notable events during the quarter.

So here we go……

What H1 it has been! Surely not many people expected the mayhem about to ensue after the year started, but patient investors were once more rewarded in the end.  I wouldn’t really comment too much on the macro events during the period as I am afraid the post will get out of control. Overall the average stock in the portfolio returned 11.2% over the period which is an excellent outcome in both absolute as well as in relative terms. Performance is one of those surprisingly tricky areas, where if you want to account for currency movements, timing of cashflows etc.. it becomes a bit of a nightmare. So for simplification purposes, all returns are in local currency and the portfolio performance is just the average return of the stocks (which is a pretty good approximation as these are all meaningful positions). In most periods the currency returns wouldn’t matter so much, but during H1, the USD depreciated so much that while the S&P is up in USD it is still negative in GBP.

Anyway, back to the performance. The portfolio returned 11.2% vs 6% for the S&P and 7% for AIM. So excellent outperformance of 4-5%. Now for the specific stocks in alphabetical order.

Alphabet: -8%

Where do I start. With one of these large multinationals there is so much going on at any given point (antitrust litigations, AI, self-driving, advertising, you name it). Obviously not the best start to the year from Google. While I have very long-term holding in the stock(10yrs+) this is the first time I am beginning to have a few doubts for the next 5-10yrs. I think there are too many unknows which might affect the business model (from Tesla and the many Chinese companies in the self-driving to the AI and search). So, while it is still a core holding, I have top sliced a little bit for the first time in many years.

Alumasc: +21%

Great performance and half yearly results in early February (20% increase in revenue). All divisions are growing and it is in a sector in the construction industry which has a lot of tailwinds from regulation. The integration of its recent acquisition of ARP has gone very well(especially the cross selling to customers). While I am still positive on the long term, I suspect there will be more M&A in the short term and also the valuation has stretched somewhat from the levels(190p) at which I bought the shares. So I have top sliced as I suspect the shares will drift for a while. If they do come off I will be happy to add.

Amazon: -1%

Amazon is quietly chugging along (strange thing to say for a trillion-dollar company with so many businesses). A lot of news of building data centres all over the world. I suspect it will come out good in the end. Continue to hold for the long term as I believe in the innovation and scale that this company possesses.

Begbies Traynor: +13%

Finally, the market is waking up to this company’s prospects and value. Despite excellent results back in May (revenue up 10% organic and PBT of £23.5m on a market cap of less than £200m). I have added some more post the results, which was a good timing as the market started waking up a few weeks later and the share price rallied a bit. Still grossly undervalued, should be at least 150p.

Billington: -17%

Obviously disappointing share price performance. The company announced results back in April (revenue down 15% and profits down 20%), which was actually better than previous guidance. This is all on the back of exceptional 2024. There are some pricing pressures in the sector due to somewhat external issues(one of the main competitors, Severfield, is in a bit of a trouble so I suspect they are undercutting pricing for new business). Tough spot for now, but decent valuation, excellent management which plans for the long term. I have added some more during the recent sell-off. Good long term holding in the sector.

Charles Schwab: +24%

Excellent performance. I’ve added some more towards Q4 last year post the debacle with their treasury performance. I think this is a dominant player in the space. Has great potential to move into other areas of finance at some point as well as expand internationally if they want to. The ship has sailed for anyone to catch them now, so I think this is a great long term holding. Will be adding on unjustified weakness.

Cordel: +16%

Hmm, a bit of a mixed bag. This is a relatively new holding of mine(1yr<). While I am still excited about the business, the product and the top tier clients they are winning, I do not like that the management has scaled back guidance a few times now. This is a slight warning sign for me. I was intending to add post weakness but now I am in the hold and wait camp until I get a bit more assurances.

Croma Security: -2%

The company continues on its journey to market consolidation. They acquired a couple of more locksmith shops during the period. Like for like growth of 4% and PBT up by 26%. Not a very liquid name, hard to get in and out (share price didn’t budge at all during H1). Still great business model, with excellent experienced management team with skin in the game. Trading at below NAV currently which tells you the state of the UK AIMs market.

Deere: 22%

Excellent first half from Deere. I must say this is one of my longest portfolio holdings and as such I pay a bit less attention as I am still convinced of its leadership position in the market place. I think AI and automation would be great for the company, so nothing to jeopardise the long term view. Trading slightly expensive now, but I think the recovery in profits is coming. Long term holding

I think this post is getting a bit long. Will update the rest of the companies in the coming days.

TBC