After a turbulent year, much of the uncertainty has cleared and the current valuation remains highly attractive.

The company turned a profit in the first half, and having stabilised its cash flows, is in a strong position to realise the potential of its upcoming releases.

A centuries old family business, positioned for a period of exceptional growth not reflected in the share price.

Continued recovery despite ongoing headwinds, and a valuation that remains attractive.

Two companies in the US homebuilding sector, and a metallurgical coal miner.

A look at a premium drinks conglomerate, a publisher, and a global drilling contractor.

This week we're taking a look at a large Canadian convenience store operator, a toy developer/distributor in the UK, and a respiratory care provider in the US. ## Alimentation Couche-Tard Inc. (ATD.TSX) ATD operates more than 16,800 convenience stores and petrol stations across 31 countries and territories, including the United States, Canada, and Europe. In the year ended 28 Apr 2024, it generated total revenue of $69,263.5m (FY23: $71,856.7m), operating profit of $3,810.2m (FY23: $4,232.0m), and net profit of $2,729.7m (FY23: $3,090.9m). Total equity at 28 Apr 2024 was $13,301.4m (FY23: $12,564.5m), almost entirely intangible, and it had net debt including lease liabilities of $13,162.7m (FY23: $8,639.4m). ATD generated net cash flows from operations of $4,817.2m (FY23: $4,344.6m), and invested a net $6,603.9m into a mix of business acquisitions, PP&E, and other assets (FY23: $2,275.6m). Free cash flow was $2,395.2m (FY23: $2,101.9m), which it used to pay dividends of $453.0m (FY23: $377.7m) alongside share repurchases totalling $1,349.4m (FY23: $2,392.5m). **Market capitalisation:** CAD 65,450m ($46,901m) **Valuation:** Using the FY24 figures, the shares currently offer a 5.8% earnings yield, 5.1% free cash flow yield, 1.0% dividend yield, and 3.8% shareholder yield (dividends + share repurchases). **Reason:** Earnings contraction and generally negative economic outlook. **Interest level:** Moderate - The company has achieved impressive growth over the last decade or so, but is perhaps a little too expensive for me currently. ## Sign up to Firm Returns Elevate your idea generation with three new company profiles each week Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## The Character Group (CCT.AIM) CCT engages in the design, development and international distribution of toys, games and giftware, often under licence from well known brands. In the year ended 31 Aug 2024, it generated total revenue of £123,419k (FY23: £122,591k), gross profit of £32,751k (FY23: £32,786k), operating profit of £6,546k (FY23: £5,300k), and net profit of £4,952k (FY23: £3,499k). Total equity at 31 Aug 2024 was £38,630k (FY23: £39,365k), almost entirely tangible, and it had net cash including lease liabilities of £12,284k (FY23: £8,860k). CCT generated net cash flows from operations of £12,017k (FY23: £(2,974)k - largely due to movements in working capital), and invested a net £2,220k into a mix of intangible assets (primarily capitalised product development) and PP&E (FY23: £3,997k). Free cash flow was £9,228k (FY23: £(7,806)k), which it used to pay dividends of £3,623k (FY23: £3,486k) alongside share repurchases totalling £2,000k (FY23: nil). **Market capitalisation:** £44,510k **Valuation:** Using the FY24 figures, the shares currently offer a 11.1% earnings yield, 20.7% free cash flow yield, 8.1% dividend yield, 12.6% shareholder yield, and trade at 1.15x book value. **Reason:** Uncertainty around tariffs, which given the products are manufactured in China, will directly impact the c.20% of sales that came from the U.S. in FY24. **Interest level:** Moderate - The company is well capitalised, making it likely it will be able to weather these near-term headwinds. Dividend yield is pretty attractive and management is using the current share price weakness to be fairly aggressive with share repurchases, in alignment with relatively high insider ownership. The only thing that gives me pause is the nature of the business itself, which isn't the highest quality. ## Quipt Home Medical Corp. (QIPT.TSX) QIPT provides in-home equipment and disease management solutions for clinical respiratory care in the United States. In the year ended 30 Sep 2024, it generated total revenue of $245,915k (FY23: $211,677k), operating profit of $1,115k (FY23: $2,853k), and a net loss of $(6,763)k (FY23: $(2,784)k). Total equity at 30 Sep 2024 was $107,191k (FY23: $111,115k), entirely intangible, and it had net debt including lease liabilities of $83,628k (FY23: $80,754k). QIPT generated net cash flows from operations of $35,381k (FY23: $36,980k), and invested $10,313k into purchases of property and equipment (FY23: $6,852k + $76,038k for a business acquisition). Free cash flow was $(5,787)k (FY23: $3,580k), and it didn't distribute any cash to shareholders. _Note: the company leases a lot of equipment, which turned free cash flow negative._ **Market capitalisation:** CAD 84,720k ($60,880k) **Valuation:** Using the FY24 figures, the shares currently offer a (11.1)% earnings yield, and (9.5)% free cash flow yield. **Reason:** Revenue has started contracting, the company still remains unprofitable, and the shares are coming off COVID highs. **Interest level:** Low - Free cash flow looked attractive in a screener, but proved illusory after accounting for the equipment leases. Not much to like here unless you think there's going to be an inflection in earnings/FCF in the near future. * * * For more detailed analysis, consider upgrading to a paid subscription, which includes: * Long-form research reports on individual companies; * Periodic updates on companies I hold in my portfolio; and * Buy-sell notifications for all my portfolio moves. Join a cohort of 20+ private and professional investors who are already enjoying these benefits. Upgrade Well that concludes this week's newsletter. If you own, or have studied any of the companies profiled, please share any additional insights you might have in the comments. See you next week for some more bottom feeding.

This week we're taking a look at a couple of pretty well known names on the London Stock Exchange, along with an AIM-listed company in the home furnishings sector that's been aggressively repurchasing its shares. ## Domino's Pizza Group (DOM.LSE) DOM is a pizza takeaway business which holds the master franchise agreement to own, operate and franchise Domino's stores in the UK and the Republic of Ireland. As of 29 Dec 2024, it had 1,372 stores across these two regions. In the year ended 29 Dec 2024, it generated total revenue of £664.5m (FY23: £679.8m), gross profit of £318.9m (FY23: £316.2m), operating profit of £142.6m (FY23: £156.8m), and net profit of £90.2m (FY23: £115.0m). Total equity at 29 Dec 2024 was £(82.2)m (FY23: £(134.0)m), and it had net debt excluding lease liabilities of £265.5m (FY23: £232.8m), and £495.2m including lease liabilities (FY23: £463.1m). _It should be noted that the company sub-leases its leased properties to its franchisees using back-to-back leases, so there are lease receivable assets matching each lease liability._ DOM generated net cash flows from operations of £103.5m (FY23: £113.5m), and invested £62.4m into a mix of PP&E, intangible assets, subsidiary acquisitions, and other investments (FY23: £20.8m). Free cash flow was £59.7m (FY23: £69.5m), which it used to pay out £42.0m in dividends (FY23: £41.9m), alongside £26.3m in share repurchases (FY23: £98.3m). _Note: the proceeds from asset sales balanced out the investments and shareholder distributions, resulting in the cash balance being maintained at year end._ **Market capitalisation:** £1,049.15m **Valuation:** Using the FY24 figures, the shares currently offer an 8.6% earnings yield, 5.7% free cash flow yield, 4.0% dividend yield, and 6.5% shareholder yield (dividends + share repurchases). **Reason:** Growth has flattened over the the last couple of years after a lockdown-induced boom during the pandemic. **Interest level:** Moderate - Seems like a reasonably attractive entry point for a business with a good historic growth record, returning all its free cash flow to shareholders. However, you'd need to have a view on where growth goes from here. ## Sign up to Firm Returns Elevate your idea generation with three new company profiles each week Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Trainline (TRN.LSE) TRN operates an independent rail and coach travel platform that sells rail and coach tickets worldwide, with the UK as its primary market. In the year ended 28 Feb 2025, it generated total revenue of £442.095m (FY24: £396.718m), gross profit of £352.313m (FY24: £305.285m), operating profit of £85.578m (FY24: £55.579m), and net profit of £58.348m (FY24: £33.986m). Total equity at 28 Feb 2025 was £282.747m (FY24: £312.016m), entirely intangible, and it had net debt including lease liabilities of £81.825m (FY24: £62.028m). TRN generated net cash flows from operations of £138.197m (FY24: £121.729m), and invested £42.669m into predominantly intangible assets (FY24: £40.749m). Free cash flow was £61.857m (FY24: £49.006m), which it used to partly fund share repurchases totalling £106.491m (FY24: £35.358m). _Note: these repurchases offset £22.445m in share-based compensation (FY24: £22.629m), which I accounted for in the free cash flow calculation._ **Market capitalisation:** £1,102.02m **Valuation:** Using the FY25 figures, the shares currently offer a 5.3% earnings yield, 5.6% free cash flow yield, and 7.6% repurchase yield (after subtracting share based compensation). **Reason:** The company faces some near-term headwinds in FY26, including the phased expansion of the contactless travel zone in central London, commission rate reductions in the UK from April 2025, and the impact of global macroeconomic uncertainty on international travel. **Interest level:** High - The current valuation isn't too demanding given the historic performance, and future growth potential. It's also got a monopoly in the UK, and deservedly so, because its app is excellent. ## Colefax Group (CFX.AIM) CFX is an international designer and distributor of luxury furnishing fabrics and wallpapers, and a leading international decorating company. In the year ended 30 Apr 2024, it generated total revenue of £107.162m (FY23: £104.818m), gross profit of £60.028m (FY23: £59.733m), operating profit of £8.476m (FY23: £9.519m), and net profit of £5.794m (FY23: £6.687m). Total equity at 30 Apr 2024 was £31.745m (FY23: £33.960m), entirely tangible, and it had net cash excluding lease liabilities of £17.763m (FY23: £19.746m), and net debt including lease lease liabilities of £5.655m (FY23: £6.316m). CFX generated net cash flows from operations of £13.467m (FY23: £13.142m), and invested £2.991m into purchases of PP&E (FY23: £3.580m). Free cash flow was £5.581m (FY23: £3.717m), which it used to pay £0.353m in dividends (FY23: £0.399m) alongside £7.227m in share repurchases (FY23: £5.382m). **Market capitalisation:** £47.04m **Valuation:** Using the FY24 figures, the shares currently offer a 12.3% earnings yield, 11.9% free cash flow yield, 0.8% dividend yield, 16.1% shareholder yield, and trade at 1.48x tangible book value. **Reason:** Challenging near-term market conditions in the UK and Europe, and the potential for tariffs to impact the US business. **Interest level:** High - Seems like a case study for a steadily growing, well-capitalised business, repurchasing a substantial portion of its shares each year, facilitated by the fact its valuation is perpetually low. It's also been around for almost a century. * * * For more detailed analysis, consider upgrading to a paid subscription, which includes: * Long-form research reports on individual companies; * Periodic updates on companies I hold in my portfolio; and * Buy-sell notifications for all my portfolio moves. Join a cohort of 20+ private and professional investors who are already enjoying these benefits. Upgrade Well that concludes this week's newsletter. If you own, or have studied any of the companies profiled, please share any additional insights you might have in the comments. See you next week for some more bottom feeding.

We're back to the usual schedule this week, with three new company profiles: two Canadian, one British, and all trading near 52 week lows. ## Magna International (MG.TSX) MG designs, engineers, and manufactures everything from individual components to full vehicles for automotive original equipment manufacturers (OEMs) worldwide. In the year ended 31 Dec 2024, it generated total revenues of $42.836bn (FY23: $42.797bn), gross profit of $5.799bn (FY23: $5.612bn), operating profit of $2.116bn (FY23: $2.038bn), and net profit of $1.009bn (FY23: $1.213bn). Total equity at 31 Dec 2024 was $11.522bn (FY23: $11.884bn), of which $8.110bn was tangible (FY23: $8.241bn), and the company had net debt including lease liabilities of $5.821bn (FY23: $6.025bn). MG generated net cash flows from operations of $3.634bn (FY23: $3.149bn), and invested a net $2.592bn into predominantly fixed assets additions (FY23: $4.503bn). Free cash flow was $1.380bn (FY23: $0.555bn), which it used to pay out $0.539bn in dividends (FY23: $0.522bn), alongside $0.207bn in share repurchases (FY23: $0.013bn). **Market capitalisation:** CAD 12.87bn ($9.34bn) **Valuation:** Using the FY24 figures, the shares currently offer a 10.8% earnings yield, 14.8% free cash flow yield, 5.8% dividend yield, 8.0% shareholder yield (dividends + share repurchases), and trade at 1.2x tangible book value. **Reason:** Negative outlook for automotive sector, particularly around the impact of tariffs, and disruption from Chinese EV manufacturers. **Interest level:** Moderate - Valuation is reasonably attractive and the company seems to have faired better than the legacy auto-makers it serves in recent years. ## Sign up to Firm Returns Elevate your idea generation with three new company profiles each week Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## James Latham (LTHM.AIM) LTHM is an independent trade distributor of timber, panels and decorative surfaces to the UK, Ireland, and internationally. In the year ended 31 Mar 2024, it generated total revenue of £366.514m (FY23: £408.370m), gross profit of £62.099m (FY23: £80.009m), operating profit of £26.143m (FY23: £43.698m), and net profit of £22.661m (FY23: £35.918m). Total equity at 31 Mar 2024 was £215.230m (FY23: £195.575m), almost entirely tangible, and the company had net cash including lease liabilities of £66.618m (FY23: £56.008m). LTHM generated net cash flows from operations of £23.572m (FY23: £34.933m), and invested a net £5.528m in purchases of property, plant and equipment (FY23: £3.232m). Free cash flow was £20.347m (FY23: £30.952m), which it used to pay £7.348m in dividends (FY23: £6.825m). **Market capitalisation:** £210.67m **Valuation:** Using the FY24 figures, the shares currently offer a 10.8% earnings yield, 9.7% free cash flow yield, 3.5% dividend yield, and trade at 1.0x book value. **Reason:** Challenging market conditions that are impacting the near-term profit outlook. **Interest level:** High - Seems like a good opportunity to pick up a high quality company, tracing its history back to 1757, at an attractive price. ## Dream Office Real Estate Investment Trust (D.UN.TSX) D.UN is an unincorporated, open-ended real estate investment trust (REIT) that owns a portfolio of commercial office properties, primarily in downtown Toronto. In the year ended 31 Dec 2024, it generated total revenue of CAD 196.114m (FY23: CAD 190.448m), gross profit of CAD 106.133m (FY23: CAD 102.335m), and a net loss of CAD (104.934)m (FY23: CAD (77.196)m), largely attributable to asset value write-downs. Total equity at 31 Dec 2024 was CAD 1,080.523m (FY23: CAD 1,200.311m), and the company had net debt of CAD 1,358.233m (FY23: CAD 1,326.188m). D.UN generated funds from operations (FFO) of CAD 58.058m (FY23: CAD 64.518m), and paid out CAD 19.048m in distributions to unit holders (FY23: CAD 39.070m). **Market capitalisation:** CAD 260.42m **Valuation:** Using the FY24 figures, the shares currently offer a (40.3)% earnings yield, 22.3% FFO yield, 7.5% dividend yield, and trade at 0.24x book value. **Reason:** Occupancy has been falling y-o-y while interest expense has been rising. Market is evidently pricing in a continuation of this trend, resulting in further asset write-downs and/or a default. **Interest level:** Moderate - Shares could be cheap if you have confidence occupancy will hit a floor, and the debt burden can be reduced to a sustainable level, either through repayments or falling interest rates. * * * For more detailed analysis, consider upgrading to a paid subscription, which includes: * Long-form research reports on individual companies; * Periodic updates on companies I hold in my portfolio; and * Buy-sell notifications for all my portfolio moves. Join a cohort of 20+ private and professional investors who are already enjoying these benefits. Upgrade Well that concludes this week's newsletter. If you own, or have studied any of the companies profiled, please share any additional insights you might have in the comments. See you next week for some more bottom feeding.

Apologies for the delayed release this week; due to a shortage of tilers in my area, I undertook the task of re-grouting my bathroom wall myself, and it proved quite a bit more time consuming than I had anticipated! Anyway, this week we've got a couple of micro-cap companies recommended by a reader, and a shipping broker - all of course trading around 52 week lows. Just a quick reminder: the annual subscription price for the Firmer tier will be rising to £100 later today (3 May, 8pm UTC), so now is your last chance to lock in the much lower price of £30. A paid subscription gets you more detailed analysis in the form of company updates and research reports, alongside portfolio notifications whenever I buy or sell a position. I've now had more than 20 people sign-up, including a mix of private and professional investors. Come and join their number! Upgrade ## XP Factory (XPF.AIM) XPF is a UK experiential leisure business, operating escape rooms and activity bars under the Escape Hunt and Boom Battle Bar brands. In addition to the UK, the company has a number of international venues across Europe, Australia, the Middle-East and North America - largely operated as franchises. The company changed its year-end from 31 Dec to 31 Mar in 2024, so the figures below include a mix of 15 month and 12 month periods, making comparison a little messy. In the 15 months ended 31 Mar 2024, it generated total revenues of £57.399m (FY22: £22.834m), gross profit of £37.048m (FY22: £14.712m), operating profit of £2.097m (FY22: £1.272m), and a net loss of £(0.420)m (FY22: £(0.994)m). Total equity at 31 Mar 2024 was £25.004m (FY22: £21.597m), of which £23.639m was intangible (FY22: £22.696m). At this date, the company had net debt excluding lease liabilities of £(0.077)m (FY22: £(1.709)m), and £29.741m including lease liabilities (FY22: £22.329m). XPF generated net cash flows from operations of £11.082m (FY22: £3.321m), and invested a net £6.133m into predominantly PP&E purchases (FY22: £6.587m). Free cash flow was £6.489m (FY22: £1.271m - _Note: I pulled a £0.8m maintenance capex figure out of thin air for this calculation since management didn't provide one_), and it didn't pay a dividend. **Market capitalisation:** £19.27m **Valuation:** Doing a rough adjustment to bring the 15 month figures down to 12 months, the shares currently offer a (1.7%) earnings yield, and 26.9% free cash flow yield. **Reason:** Negative sentiment towards UK economy in general, and hospitality/entertainment sectors in particular. The headline losses may also contribute. **Interest level:** Moderate - If you look deeper, the unit level economics seem pretty strong and the company is evidently aggressively investing for growth. The valuation on a free cash flow basis is also undoubtedly attractive. ## CT Automotive (CTA.AIM) CTA is a designer, developer and supplier of interior components to the global automotive industry. In the year ended 31 Dec 2023, the company generated total revenue of $142.974m (FY22: $124.269m), gross profit of $30.856m (FY22: $14.862m), operating profit of $8.472m (FY22: $(16.834)m), and net profit of $6.315m (FY22: $(24.664)m). Total equity at 31 Dec 2023 was $16.967m (FY22: $2.577m), of which $15.394m was tangible (FY22: $0.790m). At this date, net debt excluding lease liabilities was $3.758m (FY22: $12.229m), and $12.708m including lease liabilities (FY22: $24.151m). CTA generated net cash flows from operations of $8.037m (FY22: $5.542m), and invested a net $3.210m in purchases of primarily PP&E (FY22: $3.487m). Free cash flow was $(2.453)m (FY22: $(5.500)m), and it didn't pay a dividend. _Note: I've conservatively used depreciation in the free cash flow calculation, since it appears likely the company is underinvesting in maintenance capex_. **Market capitalisation:** £17.30m ($22.96m) **Valuation:** Using the FY23 figures, the shares currently offer a 27.5% earnings yield, (10.7)% free cash flow yield, and trade at 1.5x tangible book value. **Reason:** Tariffs and other headwinds facing the automotive industry, alongside a fairly tenuous financial position. **Interest level:** Low - Despite a capital raise in 2023 and further operating improvements in 2024, it seems the company is still vulnerable to an industry/wider economic downturn. I don't think the shares are cheap enough to compensate for this risk personally. ## Clarkson (CKN.LSE) CKN is a provider of integrated services and investment banking capabilities to the shipping and offshore markets (it's a shipping broker). In the year ended 31 Dec 2024, the company generated total revenue of £661.4m (FY23: £639.4m), gross profit of £627.7m (FY23: £609.0m), operating profit of £98.5m (FY23: £99.8m), and net profit of £86.3m (FY23: £85.8m). Total equity at 31 Dec 2024 was £495.7m (FY23: £456.6m), of which £323.1m was tangible (FY23: £273.7m), and net cash including lease liabilities was £393.2m (FY23: £355.7m). CKN generated net cash flows from operations of £114.7m (FY23: £155.3m), and invested a net £9.6m into PP&E and various other assets (FY23: £12.2m). Free cash flow was £96.6m (FY23: £133.6m), which it used to pay dividends totalling £31.5m (FY23: £28.3m), alongside £26.4m of share repurchases (FY23: £49.5m). _Note: I've conservatively used depreciation and amortisation in the calculation of free cash flow as they significantly exceeded capex._ **Market capitalisation:** £921.84m **Valuation:** Using the FY24 figures, the shares currently offer a 9.4% earnings yield, 10.5% free cash flow yield, 3.4% dividend yield, 6.3% shareholder yield (dividends + share repurchases), and trade at 2.9x tangible book value. **Reason:** Tariff impact on international shipping industry, and consequent downward FY25 profit guidance from management. **Interest level:** High - Valuation is attractive given the company's track record and reputation, and its very sound balance sheet leaves it well placed to get through any market downturn. I once read a biography of Jay Gould, a business and finance mogul of the U.S. gilded age, whose first major venture was a leather tannery. Looking at the performance of CKN relative to the shipping companies it serves, I'm reminded of Jay Gould's realisation that the broking of deals was a much better business than that of directly producing/selling the leather. * * * Well that concludes this week's newsletter. If you own, or have studied any of the companies profiled, please share any additional insights you might have in the comments. I only spend an hour or so looking at each company, so it's quite possible there's something I've missed. Things should be back on schedule next week, so you'll receive the next edition on Wednesday morning as usual.

Slimmer pickings this week, as a lot of sectors have bounced back off their tariff-induced lows, but I've found three companies that look interesting. ## Ecora Resources (ECOR.LSE) Those who have been subscribers to Firm Returns for a while will be familiar with ECOR, as it's a holding I've covered quite extensively. For readers who aren't, the company owns a portfolio of mining royalties, over largely base metals such as Copper, Cobalt, and Nickel. It also has a metallurgical coal royalty nearing the end of its production life, that has contributed a significant proportion of revenues in recent years due to elevated coal prices. These cash flows have been recycled into building out the portfolio with a number of new royalties over late-stage development projects. In the year ended 31 Dec 2024, the company generated total revenues of $59.608m (FY23: $61.900m), operating profit before impairments and revaluations of $39.476m (FY23: $42.206m), and a net loss of $(9.827m) (FY23: $0.847m net profit). Total equity at 31 Dec 2024 was $434.638m (FY23: $482.019m), and it had net debt of $82.352m (FY23: $74.550m). ECOR generated net cash flows from operations of $29.595m (FY23: $33.540m), and invested a net $6.264m in purchases of royalties and other assets (FY23: $43.173m). Free cash flow was $22.067m (FY23: $29.710m), which it used to pay dividends totalling $10.836m (FY23: $22.062m), alongside $10m of share repurchases (FY23: nil). **Market capitalisation:** £127.26m ($169.68m) **Valuation:** Using the FY24 figures, the shares currently offer a (5.8%) earnings yield, 13.0% free cash flow yield, 6.4% dividend yield, 12.3% shareholder yield (dividends + share repurchases), and trade at 0.4x book value - if you use analyst consensus NAV, this falls to 0.3x. **Reason:** A significant proportion of the portfolio is development stage and largely being discounted by the market, which is focused on the producing assets and the cash flows they're generating. Commodity prices also play into this, and there's obviously uncertainty now around their near-term outlook. **Interest level:** High - At the moment, the shares pretty much trade around the dividend, which is tied to free cash flow. As certain producing assets ramp up, and development projects come online over the next few years, we should see free cash flow increase and the share price with it. It should however be noted that there's the potential for production delays, especially if commodity prices are impacted by an economic downturn. With a 3-5 year time horizon though, I think the shares look attractive. ## Hunting (HTG.LSE) HTG is precision engineering company, primarily manufacturing and distributing tools and components for the upstream oil and gas industry. In the year ended 31 Dec 2024, the company generated total revenue of $1,048.9m (FY23: $929.1m), gross profit of $271.9m (FY23: $227.7m), an operating loss of $(21.1m) (FY23: $51.5m operating profit), and net loss of $(25.5m) (FY23: $112.2m net profit). There was a $109.1m goodwill impairment that impacted both the operating and net losses. Total equity at 31 Dec 2024 was $902.3m (FY23: $950.1m), of which $817.8m was tangible (FY23: $754.9m), and it had net cash including lease liabilities of $70.7m (FY23: $33.4m net debt). HTG generated net cash flows from operations of $188.5m (FY23: $49.3m), and invested a net $25.5m in purchases of PP&E and other assets (FY23: $32.4m). Free cash flow was $124.2m (FY23: $(17.5m)), which it used to pay dividends totalling $16.7m (FY23: $15.0m), alongside $14.2m of share repurchases (FY23: $9.0m). **Market capitalisation:** £421.42m ($561.75m) **Valuation:** Using the FY24 figures, the shares currently offer a (4.5%) earnings yield, 22.1% free cash flow yield, 3.0% dividend yield, 5.5% shareholder yield, and trade at 0.7x tangible book value. **Reason:** Falling oil and gas prices, coupled with a negative political climate in several markets such as the UK. **Interest level:** High - The current valuation looks attractive: there's upside if the oil and gas markets rebound, and the company's fairly robust balance sheet provides decent downside protection. ## S4 Capital (SFOR.LSE) SFOR is a digital advertising, marketing and technology services company. In the year ended 31 Dec 2024, the company generated total revenue of £848.2m (FY23: £1,011.5m), gross profit of £754.6m (FY23: £873.2m), an operating loss of £(302.8m) (FY23: £20.2m operating profit), and net loss of £(306.9m) (FY23: £(14.3m)). As you can probably guess from these figures, there were some pretty substantial goodwill impairments in FY24. Total equity at 31 Dec 2024 was £577.5m (FY23: £891.8m), entirely intangible, and net debt including lease liabilities was £181.5m (FY23: £224.4m). SFOR generated net cash flows from operations of £84.1m (FY23: £(10.7m)), and invested a net £12.3m in various assets (FY23: £13.3m). Free cash flow was £18.3m (FY23: £(12.6m)), and it didn't pay a dividend. **Market capitalisation:** £162.61m **Valuation:** Using the FY24 figures, the shares currently offer a (188.7%) earnings yield, and 11.3% free cash flow yield. **Reason:** Weak digital advertising market; substantial debt burden; and likelihood that assets are overvalued and vulnerable to further impairment. **Interest level:** Low - Could be some value if the digital advertising market rebounds, but the juice doesn't seem worth the squeeze. That rounds out this week. See you again next Wednesday, when I'll have another three companies for you. If you'd like to get more detailed analysis in the form of company updates and research reports, alongside portfolio notifications whenever I buy or sell a position, please consider upgrading to a paid subscription. The price is currently £15 per month or £30 per year, but the annual subscription price will be going up to £100 on the 3rd of May, so act fast! Upgrade

In this update I take a look at Warner Bros. Discovery's FY24 results, content highlights, outlook for 2025-2026, and the 2025 content slate. It's a pretty long one, so pour yourself a beverage and settle in. This is the first company update that's behind the paywall, which I realise will frustrate some people, but please bear in mind it took 40+ hours to research and write. If you would like to read this and future company updates, in addition to research reports on new companies and my portfolio moves, you can upgrade to an annual paid subscription for just £30 before the 3rd of May. After this the cost will be rising to £100, so I'd encourage you to act now to lock in this much lower price. Upgrade ### Upgrade to continue reading Become a paid member to get access to all premium content Upgrade

Hello everyone. This is just a quick note to outline some changes I'll be making to Firm Returns going forwards. These include the addition of a new weekly newsletter, and a Firmer tier content and price change. Let's start with the new weekly newsletter. ### Bottom Feeding I started an experiment at the beginning of March wherein I profiled three different companies trading around 52 week lows each week, and posted them on https://www.bottom-feeding.com. This proved to be an invaluable source of idea generation, so I've decided to send out future posts to members of Firm Returns as a free weekly newsletter, which you'll see in your inbox as Bottom Feeding. In each edition you can expect to see company profiles structured as follows: > **Churchill China (CHH.AIM)** > CHH manufactures and sells ceramic and related products in the UK, Europe, US, and further afield, to customers primarily within the hospitality sector. > > In the year ended 31 Dec 2023, the company generated total revenue of £82,339k (FY22: £82,528k), operating profit of £10,252k (FY22: £9,689k), and net profit of £7,717k (FY22: £7,895k). > > Total equity at 31 Dec 2023 was £59,941k (FY22: £56,648k), and it had net cash excluding lease liabilities of £13,933k (FY22: £9,604k), and £13,256k (FY22: £9,127k) including lease liabilities. > > CHH generated net cash flows from operations of £8,475k in FY23 (FY22: £3,973k), and invested £5,407k in capital expenditure (FY22: £4,704k). It generated free cash flow of £4,635k (FY22: £727k), which it used to pay dividends totalling £3,519k (FY22: £3,062k). Note: I’ve used depreciation and amortisation in the FCF calculation, since maintenance capex isn’t disclosed. > > **Market capitalisation:**_£51.14m_ > > **Valuation:** Using the FY23 figures, the shares currently offer an earnings yield of 15.1%, free cash flow yield of 9.1%, dividend yield of 6.9%, and trade at a price to book value of 0.9. > > **Reason:** Downturn in UK and European hospitality sectors (it’s largest markets), causing profit guidance to be downgraded. Labour cost inflation resulting from the UK budget is also likely to have an impact on profits. > > **Interest level:** High - The company is nearly 230 years old and run very conservatively, making it likely it will be able to get through this period of economic weakness intact. ### Company Updates The next item of news relates to company updates. Up until now these have been publicly available as part of the free tier, but going forwards, I will be moving them into the Firmer tier. The reason is simply the time commitment involved in writing them - they often take 20-40 hours to research and write. With the edition of the new weekly ideas newsletter (Bottom Feeding), I hope free subscribers will still feel they receive plenty of value from their subscription. For those wondering, the next company update will be on Warner Bros. Discovery (WBD) and should be out in the next few days. After that it will likely be Ecora Resources (ECOR), and possibly Secure Trust Bank (STB), though I may wait until after we get the Supreme Court motor finance ruling in July. Similarly for tinyBuild (TBLD), I'll probably wait until Kingmakers releases, since that's likely to be the most impactful event this year. ### Pricing Changes Finally we come to pricing changes. From the 3rd of May I will be increasing the annual subscription price of the Firmer tier to £100, while maintaining the monthly price at £15. The increase will help make Firm Returns more sustainable (it's currently a loss-making venture), and I hope, still provide excellent value with 2-3 long-form research reports, and 8+ company updates each year, in addition to notifications whenever I buy or sell a holding in my own portfolio. I greatly appreciate the support of the 15+ people who have signed up for the Firmer tier since I launched it last year. You have given me the motivation to keep writing each day on top of my already demanding full-time job. For anyone else who'd like to sign up, you've got until the 3rd of May to lock-in a year at £30 before the price increases.

Tristel (TSTL.AIM)