Titan is the largest moon of Saturn. It is blessed with a generally smooth surface and few impact craters. It would also look 11.4 times larger than our moon in the night sky. Its nearest terrestrial eponym possesses similarly attractive characteristics; and it appears to be much larger than it is. Our supernal Titon is a veteran, too, and well equipped to live long and prosper in what is an asteroid-strewn global geopolitical hubbub.

  • Ignition: (With apologies to John Fogerty) PBT in the year to 30 September 2018 rocketed ahead 20% to £3m on net revenue up 5% at £30m. DPS was also lifted by 13% to 4.75p with cover at 4.0x. South Korea fired its PBT contribution 27% to £2.1m, more than two-thirds of Titon’s PBT.
  • Lift-off: RONA was 20.7% on an adjusted basis with Capital Turn at around 2.0 (which is unearthly). Liquidity was weightless, too, with a Quick Ratio also near 2.0, while net cash is equivalent to 18% of net assets. We also expect Titon to continue to fly cash-positive.
  • Orbit: We have nudged up our profit forecasts and had a first look at 2021. The volume of new UK housing is up 8.4% in 2018 year-to-date which is good news for Titon – while in South Korea, GDP is set to grow at 2.6% and 2.5% in 2019 and 2020 (albeit both forecasts shed 10 basis points this month – on 13 December).
  • Re-entry: We all know about Brexit uncertainty at home but Experian is forecasting annual growth in construction of 1.1% p.a. in 2018 through 2020 with private housebuilding at 3.3% p.a. Meantime, South Korea continues to be an enviably strong economy with other regions seed corn for the future. The Group produces both prosaic and truly innovative products which is a useful combination and affords protection and good reach.
  • Mission control: The Hardman UK Building Materials Sector comprises 23 companies with a market value of £6.9bn and a valuation of 7.8x EV/EBITDA on a trailing 12-month basis (priced on 14 December). Titon is on just 6.6x despite its jet-propelled number one Total Shareholder Return (TSR) of 18% over 12 months, especially against the Sector average of minus 12% (i.e. only seven stocks were positive).


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