Portfolio news

In all the recent excitement, there have been various bits of news from some of my smaller holdings.

Zirax
Zirax are putting out a variety of press releases leading up to their interim results on Monday. Good that they're trying to drum up a bit of interest.

25 September 2008 Second Moscow De-Icing Contract Win
Zirax plc ("Zirax" or the "Company"), the AIM quoted speciality chemical company focused on the development, production and sale of oilfield process chemicals and de-icing solutions is pleased to announce that it has won a second contract this year to supply an additional 8,000 Metric Tonnes ('MT') of calcium chloride based de-icers to Moscow City Council for its 2008/09 winter season. Read more

18 September 2008 Zirax signs Heads of Agreement to acquire its Principal Limestone Supplier in Russia
Zirax plc ("Zirax" or the "Company") is pleased to announce it has signed Heads of Agreement to acquire its principal limestone supplier in Russia. The acquisition is scheduled to complete later in 2008 and will cost the Company Euro 400,000 (USD 560,000) for 25 million cubic meters of reserves. Read more

15 September 2008 ZIRAX secures two new supply agreements in Romania and Azerbaijan together worth USD 1.5 million
Zirax plc ("Zirax" or the "Company") is pleased to announce it has won two new contracts together worth initially USD 1.5 million, to supply Bucharest City Council with de-icing products and supply PelletOilTM calcium chloride pellets to oil drilling operations in Azerbaijan. Read more

Nothing earth-shattering there. I don't have huge hopes for the interims, but hopefully it will be a solid set of results providing a good springboard for the next couple of years.

BDI
Bond's interims are out. They don't look hugely pretty, but they're by no means disastrous. Their profit is inevitably somewhat "lumpy" since it depends on the timing of quite large contracts. They're generating good amounts of cash.

Their market cap is currently £29m at 88p. I bought my shares at way more than that - 145p. They only made £1m after tax in the first 6 months - if that continued they'd be on a P/E ratio of 15, which seems excessive. However, I think £3m would be a reasonable assumption for the year, meaning a P/E ratio of 10 (last year was £3.6m). Not great, but OK. Looking forward a few years, I think they clearly have the capacity to drive earnings higher - say £5m.

The pay a paltry 1.6p dividend - a 1.8% yield. I imagine they're looking for a 10+% growth rate for several years so they can demonstrate the famous "progressive dividend policy". At the moment I think this is doing more harm than good. Investors looking for dividends have a mouth-watering array of 5+% yields, and growth investors don't care.

I think I'll continue to hold. They don't look overvalued. I may add to my investment, possibly funded my selling off my emerging market ETFs - I have no conviction that these are worth holding, and at least I think I understand Bond's business. Life will be simpler if I consolidate some of my smallest investments - they're not large enough to provide meaningful diversity. While I think emerging economies will do well, the best way to benefit from them is not necessarily to invest in shares that track their stockmarkets.