Portfolio Summary - All My Current Holdings

This is a short summary of my current portfolio in no particular order. At present I have no US holdings. I have a pretty long watchlist so expect this to grow this year.

Portfolio Summary

This is a short summary of my current portfolio in no particular order. At present I have no US holdings. I have A LOT of names on my watch list including a lot of Japanese names I am considering. Most of these holdings have been written up on my Substack.

Churchill China PLC

Churchill China PLC are a British manufacturer of crockery. They are focussed on hospitality clients and position themselves as a so called ‘value add’ provider with creative designs, fast delivery and durable products, which has greatly increased their ROIC over the last decade. Their key differentiation over other providers is their full control of production end to end with ownership of a raw clay producer, factory production fully based in the UK, a unique manufacturing process and marketing done internally. There is a possibility that rivals will be affected more severely by tariffs due to their outsourcing of manufacturing outside the UK, meaning Churchill could take market share as a result. Regardless of this short-term factor, Churchill trade at a significant discount to their historical averages with net cash, high quality management and a very shareholder friendly culture. Pre Covid, this was considered one of the most high-quality companies listed on the AIM.

BasicFit

The largest gym chain in Europe. BasicFit have a track record of outcompeting gym chains large and small over the last decade in various European countries and have significant advantages over their competition as a result of their scale. Regardless of how large they can grow and the company’s long term ambitions, they are valued too cheaply based on the cash flow the business can generate. Expansion costs hiding profitability and high debt have made the market uneasy. Over the long term, gym penetration in Europe still lags behind America and Scandinavia and new markets without established gym chains are ripe for expansion. At present, all BasicFit’s gyms are company owned and operated however they are opening up a franchise program which will reduce the burden on the company to self-finance growth. As cash generation improves, I expect a re-rate.

Vistry PLC

One of the most contentious stocks on FinTwit, Vistry PLC attracts some very toxic arguments from investors big and small. Some argue Vistry and their partnership business model will lead to NVR like returns over the coming decade. Others argue that Vistry’s Chairman CEO hybrid is a double headed monster destined to bring your portfolio nothing but pain. I don’t care about either of these opinions. Vistry are very cheap on basically every metric you can find. The business is transitioning from a traditional builder to a pure partnership business which uses land others own to build homes, often replacing outdated government housing with modern flats and houses. With less capital tied up in land, this business is far more attractive than traditional builders but does have its own issues which some may overlook such as rising material costs possibly having a bigger impact to Vistry than they would to a traditional builder as they have to absorb these costs. Despite this, I feel any of these concerns are priced in and the government’s current push to build more homes only supports Vistry’s transition to partnership building. Any negative headlines over the last year have been due the traditional building division, which bodes well for the business in the long term once this division is wound down.

DSW Capital

DSW Capital are a professional services licence network based in the UK. They offer professionals the ability to join their network under the DSW banner in exchange for a licensing agreement which takes a share of their profits. The business is capital light but does offer to pay for start-up fees to make it easier for professionals to start their own practice within the group. This has mostly attracted financial professionals (the founders are all ex Big 4) but last year the company announced their first foray into the legal services space with the acquisition of DR Solicitors, a leading GP and Dentist law firm. Financial services have struggled in the years following Covid, so this acquisition is extremely interesting as on paper it significantly increases earnings with stable repeat business which is uncorrelated from the rest of the business. DSW have also been trying to further diversify their financial services fee earners into segments which are less cyclical with mixed results. I feel that over the course of the next decade, DSW will prove to be worth significantly more than they are currently valued.

Pinewood Technologies Group

I owned Pinewood before they split from their parent company, Pendragon, who were bought by US Car Dealership giant, Lithia Motors. Pinewood Technologies are a SaaS company who sell Dealership Management Software, or DMS. DMS that is in use in most car dealerships in the UK is outdated and based on systems first designed in the 80s and 90s. As a result of this, dealerships struggle to collate data and performing basic tasks often requires cumbersome solutions such as exporting datafiles to Excel and then reformatting this data. Pinewood split off from Pendragon, who own and run car dealerships in the UK, in order to avoid a conflict of interest for UK car dealership groups, who did not want to adopt a direct competitor’s software. Now that they are a separate company, Pinewood have announced a number of contracts with former competitors to adopt their software for their dealerships. The software is far more complex than tradition DMS and integrates every aspect of dealer management from stock management, payments and customer data. Lithia motors have also invested into the company and as part of a joint venture, will be rolling out their software in their US car dealerships over the coming years. Excluding US growth which the company is not guiding for, the company expect to do EBITDA in the Mid to high £30 Millions by 2027. With a current market cap of Just over £311 Million, this puts them at an EV/EBITDA of under 9. For a sticky SaaS business, this is far too cheap. They have also just listed OTC in the US as of February.

Alphawave Semi

Alphawave Semi are a UK listed semiconductor design company who specialise in SerDes (Serialise and Deserialise) solutions which are in increasing demand with the growth of data centres and AI. Despite operational issues and concerns over their China business, Alphawave’s team are without a doubt world class and punching far above their weight with consistent design wins and interest from large competitors in acquiring the business. US listed comps trade far above their valuation, and I think it is likely they will eventually list in the US which would immediately close this valuation gap. Despite this, the business will continue to experience growth and has strong relationships with various semiconductor companies and foundries.

Litix SpA

Litix are a tiny Italian company with are split into 3 main divisions. Their largest division is Robotor, a robotic design and software company which adapts 6 axis robotic arms for the purpose of stone carving and sculpture with minimal intervention from the user. These robots are used in their oldest division, Torart, a sculpture lab which artists and organisations commission to create works of sculpture, often made from famous Carrara Marble, sourced locally where the company are based. The newest division is Aivox, a 60% owned subsidiary who are a design, software and manufacturing lab who bring together subtractive and additive processes for complex client needs. This division while being the smallest has been the biggest surprise since my ownership, showing great growth in the year since its founding. The Litix thesis is quite simple, stonework manufacturing can be done cheap and efficiently by robots and Litix both use these robots for their commissions business and sell these robots to those in the industry who cannot afford to develop these solutions themselves. Both of these markets have high barriers to entry. This positions Litix well for continued growth and reoccurring business thanks to their excellent reputation. I am particularly interested in the development of the company’s in-house software which they market not only at those in the stonework sector but also those in other complex CNC industries. At present they have not made a push to sell this software standalone and it is mostly sold bundled with Robotor units. The company is valued as a niche manufacturer with no value attributed to their software. As a very early stage company, I expect bumps, but this is a very interesting opportunity to invest in a company which makes money before its major growth push.

Nordrest AB

Nordrest AB are a Swedish foodservice business who operate restaurants and catering services across Sweden. The company focus on areas where there is high natural footfall such as factory plant cafeterias, airports, roadside restaurants and also the armed services. The company differentiate themselves from other foodservice companies by giving freedom to the unit operators to create and design menus in collaboration with the client needs. This allows them to consistently get better approval ratings and renew contracts with traditionally difficult customers. In addition to this business, Nordrest also own a MRE company, OutMeals AB. The MRE business is a lucrative one in which significant mark-up is placed on products within meal kits. Nordrest have a NATO contract in place and have seen increased demand for their products since the Russia-Ukraine conflict. Regardless of the outcome of this war, it seems highly likely that MRE sales will remain elevated above pre 2022 levels going forward, with the company opening a new dedicated site for MRE storage illustrating this confidence. High insider ownership and a very reasonable valuation for a very good business with many growth opportunities.