Investment Pitches

Pitch Summary:
SpringWorks Therapeutics Inc. (3.6%) (SWTX – $46.99 – NASDAQ) is a commercial stage biotech focused on the treatment of various forms of cancer and rare diseases. After several months of press speculation, German based Merck KGaA inked an agreement to acquire SWTX for $47 cash per share on April 28. The deal remains subject to final approval by shareholders and is expected to close early in the third quarter.

BSD Analysis:
SpringWorks Therapeutics is a high-growth, specialized biotech pure-play whose stock is a conviction bet on the successful commercialization of its oncology pipeline, anchored by Ogsiveo. The core thesis is driven by Ogsiveo's (nirogacestat) recent FDA approval for desmoid tumors, a rare cancer, which provides a near-monopoly in a high-value niche. The company is strategically positioned to capture market share with this differentiated asset. The stock is a leveraged play on the successful launch execution of Ogsiveo and the advancement of its deep pipeline of γ−secretase inhibitors and other precision oncology assets.

Pitch Summary:
Illumin Holdings Inc. presents a compelling investment opportunity due to its strong financial position with high net cash and no debt, limiting downside risk. The company has returned to year-over-year growth in recent quarters, driven by a strategic shift under new leadership that emphasizes customer-centric approaches and diversified growth across business lines. Despite macroeconomic challenges and a temporary setback from a major client's restructuring, Illumin's valuation remains attractive, with significant upside potential as it continues to release new features and reinvigorate previously neglected business areas. Insider buying and resumed share buybacks further support the stock price, indicating confidence in the company's future prospects.

BSD Analysis:
Illumin's recent performance highlights a successful turnaround strategy under its new CEO, who has shifted focus from a singular growth track to multiple avenues, including managed services and self-service products. The company's investment in new technologies, such as the AI forecaster, positions it well to attract new customers and enhance its CTV offerings. While macroeconomic uncertainties, such as tariffs, pose potential risks, the adtech industry is projected to grow significantly in the coming years, providing a favorable backdrop for Illumin's expansion. The company's proactive approach to addressing challenges, coupled with strategic investments and a strong cash position, suggests a robust setup for sustained growth and potential stock revaluation.

Pitch Summary:
PWR Holdings run of bad luck continued with CEO and founder, Kees Weel, advising the board he needed to take medical leave to treat an acute medical condition. The timing was unfortunate with the company in the middle of relocating its factory. Matthew Bryson has taken over the role as interim CEO. Matthew is the Chief Technical Officer and has been with PWR for nearly 25 years, as well as being a major shareholder in his own right. We have met Matthew numerous times over the years, and I caught up with him after the announcement and feel confident the company is in good hands while we wait for the return of Kees.

BSD Analysis:
PWR remains a niche, technology-driven auto-components business with strong relationships across high-performance and motorsport customers, but near-term execution is complicated by factory relocation and founder health issues. The appointment of long-tenured CTO Matthew Bryson as interim CEO provides continuity on engineering depth and culture, reducing key-person risk. Over time, new capacity from the relocated facility should support growth and operational efficiency once ramp-up is complete. The share-price weakness tied to recent setbacks may offer upside if margins and volumes normalise under stable leadership. Key risks include project delays, customer concentration and cyclicality in motorsport and performance-auto demand.

Pitch Summary:
Smartpay has entered into an agreement to be acquired by US based payments processor, Shift4 during the past month at NZ$1.20, approximately $1.11 per share. This is our third takeover offer in the past year, but unlike Altium and PSC Insurance which I was disappointed to see leave the portfolio we may be receiving a get-out-of-gaol card here. Proposed Australian legislation to ban debit card surcharges, the company’s main source of revenue, changes the Smartpay business model eliminating a big source of their revenue and profits. The news saw the share price plummet eliminating most of our gains since investing in 2020. I decided not to sell at the much lower price given this was only proposed legislation, we were facing an election in a few months, and the New Zealand business remained untouched by the legislation. As fortune would have it only a few months later the company received a takeover proposal at more than double the price we could have sold at late last year. The current takeover offer is also nearly double our purchase price and hence our overall returns at the end of the day will end up being decent.

BSD Analysis:
The Smartpay position illustrates classic regulatory risk morphing into an attractive M&A exit, with a strategic buyer willing to pay a substantial premium despite looming legislative changes. The core payments franchise and merchant relationships clearly hold strategic value, even if Australian surcharge bans would have pressured the legacy economics. For existing holders, the all-cash offer largely de-risks the scenario and crystallises a solid IRR after a period of share-price stress. Residual risk lies in deal completion and any regulatory approvals, but the spread versus the bid appears to compensate for this. Post-transaction, redeployment of capital into less policy-exposed opportunities should enhance the overall portfolio risk profile.

Pitch Summary:
We purchased Eagers Automotive approximately a year ago after it delivered a profit warning and the share price had fallen. We were fortunate to have funds from the Altium takeover to purchase a position significant enough to add to the portfolio performance. The shares have since risen 65% adding just over 3.5% to the fund performance for the year. On the flip side PWR Holdings has taken more than 5% off fund performance for the year. Eagers Automotive presented an optimistic outlook at their AGM in May. The company is aiming to add a further $1billion in sales for the current year and added that the company was trading slightly ahead of expectations for the year, although it will be a tale of two halves with the second half expected to be stronger than the first. It also announced it had signed a revised agreement with BYD for their joint-venture in Australia. Only a year ago BYD sales were one of the reasons for their profit downgrade, but now BYD sales are going through the roof, so this should be a positive move. On a cautionary note, the CEO stated they are also looking at opportunities to buy dealerships overseas, most likely in Canada. Overseas acquisitions don’t excite me but mitigating this concern is that major shareholder, Nick Politis does have experience in running dealerships in the USA, so I guess it is watch this space for the moment.

BSD Analysis:
Eagers looks like a scale consolidator in Australian auto retail with clear operating leverage as sales volumes and mix improve. Management’s upgraded sales ambitions and trading ahead of expectations suggest a supportive demand backdrop despite macro concerns. The strengthened BYD joint-venture taps into fast-growing EV demand and could become a key earnings driver if brand momentum persists. Capital allocation into offshore dealerships introduces integration and execution risk, but the presence of an experienced industry shareholder should help impose discipline. Given the share price recovery from last year’s downgrade, future upside will depend on delivering the targeted growth while avoiding value-destructive acquisitions.

Pitch Summary:
Lovisa recently opened its new Jewells retailing concept in the UK with seven stores, including a flagship store in London. It’s very early days but founder Brett Blundy believes the business is designed to be a global business. Jewells will sit under the Lovisa umbrella but as a stand-alone retail concept. There were also changes to the Board with former David Jones and Premier Investments CEO, Mark McInnes, joining the company as Executive Deputy Chairman. McInnes’s vast retail experience will be handy with the company now operating more than 1,000 stores globally, and the Jewells brand starting up.

BSD Analysis:
The investment case for Lovisa rests on its proven high-return roll-out model and the potential for Jewells to become a second global format under the same umbrella. Opening a flagship Jewells store in London and several additional UK locations demonstrates early ambition to scale the concept internationally. Board refreshment with an experienced retailer like Mark McInnes should strengthen strategic execution as the network exceeds 1,000 stores. While share-price volatility has been extreme, underlying store growth and format innovation suggest the fundamentals remain intact. Risks include fashion missteps, tariff policy and consumer-spending cycles, but the brand’s fast-turn, low-ticket model has historically proven resilient.

Pitch Summary:
Fiducian Group has been in the portfolio since 2006 and re-entered the top 10 holdings during the quarter after adding to our holding after the company reported profits were up 26% on the prior year and the dividend was increased by 20%. Fiducian is a capital-light financial services business founded in 1996 by its Executive Chairman and largest shareholder, Indy Singh. It operates across the range of financial planning, funds management and platform administration, which means it earns fees from each of the various stages of managing its client’s assets. It's a business model that has been very successful as shown in the table below. The company has mostly grown organically over the years, but it does also make small acquisitions of financial planning businesses on a regular but opportunistic basis. All its growth has been funded internally, having not raised any capital from shareholders for more than 20 years. And its high return on equity is achieved without the use of any debt. At the last balance date the company held $29 million in cash, against the $56 million of shareholders equity. Funds under Management and Administration (FUMAA) is a key driver of profits and this has been growing steadily, reaching $14 billion in the latest half-year result. The company usually generates operating earnings of nearly 20 basis points, or 0.2%, on these funds so this graph provides a good visual representation of the progress of the business.

BSD Analysis:
Fiducian appears to be a high-quality, capital-light compounder with strong alignment through founder ownership and a long record of organic growth. The integrated model across advice, funds management and platform administration supports multiple fee streams on the same client assets and contributes to high, debt-free returns on equity. Steadily rising FUMAA toward $14 billion, combined with an estimated 0.2% operating margin on funds, underpins attractive earnings visibility. Consistent dividend growth and significant cash on the balance sheet provide optionality for further bolt-on acquisitions or capital returns. Key risks include regulatory changes in advice economics and market-driven FUM volatility, but the long history of internally funded expansion suggests a resilient franchise.

Pitch Summary:
Masco Corporation is a global leader in the design, manufacture, and distribution of branded home improvement and building products. The company’s portfolio of well-recognized brands includes BEHR® paint, DELTA® and HANSGROHE® faucets, bath, and shower fixtures, and Watkins Wellness® hot tubs, spas, and aquatic fitness products. Competitive advantages include brand strength built over several decades and close alignment with advantaged retail and distribution partners. Following several key portfolio actions (2015 spin of installation business serving new construction, 2019 sale of Windows, 2020 sale of Cabinetry, 2024 sale of Lighting), the business is now comprised mostly of low-ticket and high-impact home improvement products for the repair and remodel markets in growing categories (paints, stains, faucets, mixers, etc.). Management has been disciplined at allocating Masco’s strong free cash flow (FCF) and has a clear understanding of ROIC, which we estimate to be among best-in-class. The business is conservatively financed, has strong liquidity, low capital requirements, and has generated positive FCF every year for over four decades. Given the backdrop of weak demand (affordability and interest rates) and tariff uncertainty, it currently trades at a depressed valuation.

BSD Analysis:
Masco stands out as a resilient home-improvement compounder supported by durable brands, consistent free-cash-flow generation, and industry-leading ROIC. Portfolio simplification has strengthened margins and improved business quality, while current demand weakness appears cyclical rather than structural. With low leverage and steady capital returns via buybacks and dividends, downside risk is limited. Tariff exposure remains a headwind, but valuation looks attractive relative to normalized earnings power.

Pitch Summary:
Insight Enterprises is a leading provider of information technology solutions in North America (81% of revenue), Europe (16%), and Asia-Pacific (3%). They provide value to customers by assisting them with the design, selection, procurement, integration, and management of their IT solutions. To vendor partners, Insight offers a cost-effective way to reach a large customer base with strong implementation capabilities. The North American IT industry has historically grown at around 4% per annum. Insight, being one of the larger players in the industry, has scale advantages that make them difficult to compete against, particularly for the smaller regional players that make up the majority of the market. Therefore, we believe Insight can outgrow the underlying industry by taking market share over time. When factoring in margin expansion and share buybacks, we believe the company’s earnings per share can compound at an attractive, double-digit rate. The shares are trading at low valuation multiples as demand for IT solutions was pulled forward during COVID, which subsequently led to several years of weak customer spending. We think this is a temporary lull, and that end market demand will recover in the coming years providing an opportunity for an attractive return to shareholders.

BSD Analysis:
Insight appears positioned for sustained double-digit EPS growth supported by scale advantages, expanding services exposure, and normalization in enterprise IT spending post-COVID. The company generates solid free cash flow and continues to repurchase shares, while its valuation remains discounted relative to peers despite improving margins. Hybrid-cloud migration and vendor consolidation should support ongoing market-share gains. Risks include macro IT budget softness and concentration among key vendors, but Insight’s competitive positioning suggests a favorable long-term outlook.

Pitch Summary:
Insight Enterprises is a leading provider of information technology solutions in North America (81% of revenue), Europe (16%), and Asia-Pacific (3%). They provide value to customers by assisting them with the design, selection, procurement, integration, and management of their IT solutions. To vendor partners, Insight offers a cost-effective way to reach a large customer base with strong implementation capabilities. The North American IT industry has historically grown at around 4% per annum. Insight, being one of the larger players in the industry, has scale advantages that make them difficult to compete against, particularly for the smaller regional players that make up the majority of the market. Therefore, we believe Insight can outgrow the underlying industry by taking market share over time. When factoring in margin expansion and share buybacks, we believe the company’s earnings per share can compound at an attractive, double-digit rate. The shares are trading at low valuation multiples as demand for IT solutions was pulled forward during COVID, which subsequently led to several years of weak customer spending. We think this is a temporary lull, and that end market demand will recover in the coming years providing an opportunity for an attractive return to shareholders.

BSD Analysis:
Insight is a stealth-mode Solutions Integrator that the market mistakenly prices as a low-margin hardware reseller, creating a massive multiple arbitrage opportunity. The core investment thesis is built on the successful pivot to high-margin Services and Cloud gross profit, which is structurally insulating the company from cyclical hardware volatility. Insight’s launch of Insight AI is the critical catalyst, positioning it as a mandatory partner for large enterprises struggling to convert AI visions into tangible ROI. By leveraging its deep partnerships with Microsoft Azure, AWS, and Google Cloud, Insight is the execution layer for the multi-cloud world, ensuring consistent, double-digit growth in its recurring services revenue and accelerating its path toward superior Adjusted EBITDA margins.

Pitch Summary:
Masco Corporation is a global leader in the design, manufacture, and distribution of branded home improvement and building products. The company’s portfolio of well-recognized brands includes BEHR® paint, DELTA® and HANSGROHE® faucets, bath, and shower fixtures, and Watkins Wellness® hot tubs, spas, and aquatic fitness products. Competitive advantages include brand strength built over several decades and close alignment with advantaged retail and distribution partners. Following several key portfolio actions (2015 spin of installation business serving new construction, 2019 sale of Windows, 2020 sale of Cabinetry, 2024 sale of Lighting), the business is now comprised mostly of low-ticket and high-impact home improvement products for the repair and remodel markets in growing categories (paints, stains, faucets, mixers, etc.). Management has been disciplined at allocating Masco’s strong free cash flow (FCF) and has a clear understanding of ROIC, which we estimate to be among best-in-class. The business is conservatively financed, has strong liquidity, low capital requirements, and has generated positive FCF every year for over four decades. Given the backdrop of weak demand (affordability and interest rates) and tariff uncertainty, it currently trades at a depressed valuation.

BSD Analysis:
Masco is a high-quality, de-risked industrial compounder that is structurally insulated from the volatile new housing market by its primary exposure to low-ticket repair and remodel (R&R) spending. The investment thesis centers on the highly disciplined simplification of its portfolio—shedding cyclical segments like windows and cabinetry—to focus entirely on its dominant Plumbing Products and Behr Paint franchises. This portfolio overhaul has delivered 650 basis points of margin expansion and enabled a colossal redirection of Free Cash Flow (FCF). Masco's consistent deployment of FCF into aggressive share buybacks and a growing dividend ensures compounding EPS growth, making it a defensive, cash-generating giant that leverages non-discretionary home maintenance spend.

Pitch Summary:
Insight Enterprises is a leading provider of information technology solutions in North America (81% of revenue), Europe (16%), and Asia-Pacific (3%). They provide value to customers by assisting them with the design, selection, procurement, integration, and management of their IT solutions. To vendor partners, Insight offers a cost-effective way to reach a large customer base with strong implementation capabilities. The North American IT industry has historically grown at around 4% per annum. Insight, being one of the larger players in the industry, has scale advantages that make them difficult to compete against, particularly for the smaller regional players that make up the majority of the market. Therefore, we believe Insight can outgrow the underlying industry by taking market share over time. When factoring in margin expansion and share buybacks, we believe the company’s earnings per share can compound at an attractive, double-digit rate. The shares are trading at low valuation multiples as demand for IT solutions was pulled forward during COVID, which subsequently led to several years of weak customer spending. We think this is a temporary lull, and that end market demand will recover in the coming years providing an opportunity for an attractive return to shareholders.

BSD Analysis:
Insight is a stealth-mode Solutions Integrator that the market mistakenly prices as a low-margin hardware reseller, creating a massive multiple arbitrage opportunity. The core investment thesis is built on the successful pivot to high-margin Services and Cloud gross profit, which is structurally insulating the company from cyclical hardware volatility. Insight’s launch of Insight AI is the critical catalyst, positioning it as a mandatory partner for large enterprises struggling to convert AI visions into tangible ROI. By leveraging its deep partnerships with Microsoft Azure, AWS, and Google Cloud, Insight is the execution layer for the multi-cloud world, ensuring consistent, double-digit growth in its recurring services revenue and accelerating its path toward superior Adjusted EBITDA margins.

Pitch Summary:
Masco Corporation is a global leader in the design, manufacture, and distribution of branded home improvement and building products. The company’s portfolio of well-recognized brands includes BEHR® paint, DELTA® and HANSGROHE® faucets, bath, and shower fixtures, and Watkins Wellness® hot tubs, spas, and aquatic fitness products. Competitive advantages include brand strength built over several decades and close alignment with advantaged retail and distribution partners. Following several key portfolio actions (2015 spin of installation business serving new construction, 2019 sale of Windows, 2020 sale of Cabinetry, 2024 sale of Lighting), the business is now comprised mostly of low-ticket and high-impact home improvement products for the repair and remodel markets in growing categories (paints, stains, faucets, mixers, etc.). Management has been disciplined at allocating Masco’s strong free cash flow (FCF) and has a clear understanding of ROIC, which we estimate to be among best-in-class. The business is conservatively financed, has strong liquidity, low capital requirements, and has generated positive FCF every year for over four decades. Given the backdrop of weak demand (affordability and interest rates) and tariff uncertainty, it currently trades at a depressed valuation.

BSD Analysis:
Masco is a high-quality, de-risked industrial compounder that is structurally insulated from the volatile new housing market by its primary exposure to low-ticket repair and remodel (R&R) spending. The investment thesis centers on the highly disciplined simplification of its portfolio—shedding cyclical segments like windows and cabinetry—to focus entirely on its dominant Plumbing Products and Behr Paint franchises. This portfolio overhaul has delivered 650 basis points of margin expansion and enabled a colossal redirection of Free Cash Flow (FCF). Masco's consistent deployment of FCF into aggressive share buybacks and a growing dividend ensures compounding EPS growth, making it a defensive, cash-generating giant that leverages non-discretionary home maintenance spend.

Pitch Summary:
Insight Enterprises is a leading provider of information technology solutions in North America (81% of revenue), Europe (16%), and Asia-Pacific (3%). They provide value to customers by assisting them with the design, selection, procurement, integration, and management of their IT solutions. To vendor partners, Insight offers a cost-effective way to reach a large customer base with strong implementation capabilities. The North American IT industry has historically grown at around 4% per annum. Insight, being one of the larger players in the industry, has scale advantages that make them difficult to compete against, particularly for the smaller regional players that make up the majority of the market. Therefore, we believe Insight can outgrow the underlying industry by taking market share over time. When factoring in margin expansion and share buybacks, we believe the company’s earnings per share can compound at an attractive, double-digit rate. The shares are trading at low valuation multiples as demand for IT solutions was pulled forward during COVID, which subsequently led to several years of weak customer spending. We think this is a temporary lull, and that end market demand will recover in the coming years providing an opportunity for an attractive return to shareholders.

BSD Analysis:
Insight is a stealth-mode Solutions Integrator that the market mistakenly prices as a low-margin hardware reseller, creating a massive multiple arbitrage opportunity. The core investment thesis is built on the successful pivot to high-margin Services and Cloud gross profit, which is structurally insulating the company from cyclical hardware volatility. Insight’s launch of Insight AI is the critical catalyst, positioning it as a mandatory partner for large enterprises struggling to convert AI visions into tangible ROI. By leveraging its deep partnerships with Microsoft Azure, AWS, and Google Cloud, Insight is the execution layer for the multi-cloud world, ensuring consistent, double-digit growth in its recurring services revenue and accelerating its path toward superior Adjusted EBITDA margins.

Pitch Summary:
We initiated a stake in GE HealthCare Technologies (GEHC). GEHC was spun off from General Electric and provides imaging products such as MRIs, CT scanners, and ultrasound equipment to healthcare facilities. Their large equipment generates significant recurring revenue through service and maintenance contracts. New AI features have the potential to drive significant revenue growth as customers adopt software upgrades in their existing equipment.

BSD Analysis:
GE HealthCare combines a defensive installed base with emerging growth vectors from AI-enabled imaging and diagnostic software. Recurring service revenue provides stability, while new product cycles in MR, CT, and ultrasound support mid-single to high-single-digit growth. Valuation remains reasonable relative to peers given improving margins, deleveraging, and optionality from software attach rates.

Pitch Summary:
ENTG reported poor results in the first quarter due to macro uncertainty as well as tariffs on product going to and from China. Management believes the second half of the year will show improvement as some of their customers begin producing the next smaller node, which uses significantly more of their product. Additionally, new facilities in Colorado and Taiwan should be fully qualified by customers, which bodes well for 2026.

BSD Analysis:
Despite near-term headwinds, Entegris is well positioned for a cyclical upturn as leading-edge node transitions structurally increase material intensity. Tariff exposure is transitory, while capacity ramps in Colorado and Taiwan support mid-term revenue acceleration. The company’s dominant share in filtration and specialty materials provides pricing leverage and high switching costs. Valuation remains depressed relative to normalized earnings power.

Pitch Summary:
With a market capitalisation of GBP 4.9bn, Whitbread, the owner of Premier Inn, is the largest hotel brand in the United Kingdom and Ireland and is also a leading hotel operator in Germany. We have followed the company for a long time and liked it very much when Whitbread sold Costa Coffee in 2018 to return cash to shareholders, focusing on its core brand, Premier Inn. After the severe interruption of the pandemic and an unfortunate dilutive capital increase, we see the strong focus on returns and shareholder value very much in place again and are surprised that the market does not appreciate this at present. In fact, considering the value of the freehold property estimated at around GBP 5bn, investors are paying very little for the core operational business, which we believe enjoys a competitive edge in its domestic market largely driven by scale, a high share of direct distribution, and a strong ‘value-for-money’ brand. Additionally, Whitbread has established itself as a key player in the German market with significant growth potential. The shares are trading at a discount to historic valuation despite management’s plan to unlock value from its real estate and the German operations starting to turn profitable. We believe the current UK macroeconomic headwind is the major driver for the valuation discount, and we regard this as a temporary window of opportunity for Whitbread to gain market share from weak independent players and for us to build a long-term position in the company. Whitbread has come a long way since its founding in 1742 as a London brewery by Samuel Whitbread and becoming at one time the largest UK brewer. In the 1970s and 80s, it diversified into restaurants and hotels and had a very busy period in the 90s buying a variety of different businesses. This strategy was subsequently reversed by a two-decade long divestment process which led to Whitbread becoming a focussed hotel operator and the largest hotel brand with a 12% market share and over 850 hotels in its core UK market. The final stage of these divestments was the sale of Costa Coffee to Coca-Cola in 2018 for GBP 3.9bn, of which GBP 2.5bn has been returned through share buybacks, with the remaining amount used for paying back debt and funding the pension scheme. Whitbread has established Premier Inn as a very strong local brand that is benefitting from excellent brand awareness and a value-for-money reputation which has attracted a loyal customer base. This enables Premier Inn to keep a very large share of direct distribution, circumventing high commissions from the likes of Booking.com. Additionally, the business is benefitting from its sheer scale, being the largest player in a still fragmented market, where Premier Inn is gaining from independent players exiting. We regard the UK and Ireland operations as a mature business and think management is focusing on the right initiatives. With a large freehold property portfolio worth around GBP 5bn and lots of mature and profitable sites, management is recycling cash through sale and leaseback operations where the property can be sold off at attractive yields of 4% and investing the extracted cash into high-margin new developments such as London area hotels. Additionally, Whitbread still operates restaurants off and onsite and has started to close low-margin operations as well as converting those onsite to high-margin hotel rooms - owning the property enables this flexibility. Its pure scale helps Premier Inn to cope with higher inflation and wages, optimising processes, and taking out costs to counter these increases. This should lead to sustainably higher operating margins, and indeed management is targeting a 15% return on capital employed, up from its historic average of 12%. When the strategy of the Accelerated Growth Plan was announced early last year, shares were still trading higher on the back of a good 2023, having fully recovered from the pandemic. However, with weak economic growth in the UK, high public debt and limited fiscal headroom, trading has been weak in its core market and shares have come down to historic low valuations. We do not know when we will see an inflection point in trading, but we are sure that Premier Inn can count on its strength and is gaining market share, especially from independent players who are struggling in this environment. Additionally, its reputation for value for money should continue to benefit from consumers trading down. Whitbread sales declined -1% to GBP 2.9bn and underlying operating profit decreased 14% to GBP 483m in fiscal year 2024/25 ending February. This trend has not yet reversed, with recent first-quarter results driven by the UK, being down -3%, with revenue per available room under pressure. Total revenues show a roughly flat picture thanks to the German business growing strongly. Today, Germany accounts for 10% of total revenues, having grown from scratch in 2016. Total invested and committed capital of GBP 1.3bn is by no means reflected in its valuation and is currently perceived by many investors as bad capital allocation. We take a different view and think that Premier Inn has great potential to replicate its success in the UK in the long run. After failing to acquire its closest peer in Germany, Motel One, management decided to grow its German business organically through new developments and acquisition of existing hotels. The pandemic provided an opportunity to acquire many existing hotels while the whole industry was still struggling. This growth has enabled Premier Inn to become one of the largest premium budget hotel chains in Germany, which is a very attractive market. The German market is 40% larger than the UK but is still much more fragmented with a high share of independent players at around 60% (vs 40% in the UK), and a strong inbound market driven by trade fairs and domestic leisure. As of last year, the German business with 62 hotels and 11k beds generated revenues of GBP 231m and earnings before interest, tax, depreciation, amortisation and rent (EBITDAR) of GBP 66m. In Germany, Motel One operates just about the same number of hotels but more rooms. The founder of Motel One has recently sold off his stake to PAI Partners and extracted the freehold properties into a separate property group. While we have only limited financial insight, we estimate that if a similar transaction multiple were applied to Whitbread, it would result in a fair value of GBP 9.6bn, representing 90% upside to its current share price. We think there is a large discrepancy between what Whitbread would be valued at in a private market transaction and the current valuation the public market is applying to it. We regard this as a great opportunity with an attractive risk/return profile given its high-quality hotel business, conservative balance sheet with low net debt of GBP 483m, strong value in its freehold property and long-term growth potential in Germany, which we see as the real underappreciated growth driver. On the ground in Germany, we have witnessed the rapid growth of Premier Inn in recent years, and we believe that Premier Inn’s branding fits very well with German consumer preferences. In our view, it has the potential to grow substantially and become the largest premium budget hotel brand in Germany. While we wait for the market to recognise this value, we are rewarded with a 3.5% dividend yield and further share buybacks, which management plans to execute up to GBP 2bn until fiscal year 29/30, equating to returning cash at a rate of 8%. Additionally, management is targeting GBP 300m of incremental operating profit stemming from above-mentioned initiatives over the same time frame. Based on our estimate of this year’s underlying net operating profits of GBP 350m and a return to the historic average multiple of 20 times enterprise value to net operating profits after tax, excluding leasing liabilities, we believe the shares offer upside of at least 30% over the next 12 months. We see more upside potential when the Accelerated Growth Plan results come through and Germany turns sustainably profitable.

BSD Analysis:
Whitbread represents a deep value mispricing created by temporary UK macro headwinds overshadowing strong structural tailwinds. Premier Inn’s direct-booking model, scale-driven cost advantages, and consolidation opportunity uniquely position it to gain share as independent operators exit. Despite owning a GBP 5bn freehold estate, Whitbread trades well below private-market hotel valuation multiples, implying significant hidden asset value. German operations are scaling rapidly and could become a major multi-year earnings engine, with private-market transaction comps implying substantial upside. Balance-sheet strength, 3.5% dividend yield, and multi-billion-pound buybacks create a compelling capital-return backdrop. Catalysts include improving UK RevPAR, German profitability inflection, and execution of the Accelerated Growth Plan.

Pitch Summary:
On the long side, Costain +17%, +0.8% contribution, the UK engineering and infrastructure company, continued its recent run of positive performance as the company gave an upbeat trading statement and cited new opportunities in segments such as nuclear power and water. The company also announced a share buyback program and an improvement in the position of its defined benefit pension scheme.

BSD Analysis:
Costain is benefiting from strengthening fundamentals in UK infrastructure spending, particularly in regulated utilities and nuclear projects. The upbeat trading update suggests improving revenue visibility, while the reinstated buyback signals management confidence and balance-sheet resilience. Shares still trade at a discounted valuation relative to peers, despite improving margins and a stabilizing pension position. Strong government-backed investment cycles and a shift toward higher-quality earnings mix support further upside. Key risks relate to contract execution and legacy project volatility, but near-term momentum appears positive.

Pitch Summary:
CDW is the largest IT reseller in North America. It effectively serves as an outsourced sales and marketing provider for hardware and software vendors, and an extension of its customer’s IT team, who rely on CDW’s expertise. Operating trends for the business have been persistently weak as IT hardware spending, which accounts for roughly 50% of its gross profit, has been in a downturn. CDW’s customer base, which skews smaller, has also had to deal with higher interest rates and digesting IT spend from the COVID period. We exited the investment in CDW earlier in the year.

BSD Analysis:
CDW is the go-to IT solutions provider for enterprises that need hardware, software, and services bundled and deployed fast. Its scale and vendor relationships give it pricing leverage and access to the latest technologies before smaller integrators. While tech spending can be choppy, CDW sits at the center of refresh cycles, cloud migrations, and now AI-driven infrastructure upgrades. The company’s services mix continues to rise, nudging margins upward and making the business stickier. CDW’s execution is consistently elite — tight cost control, disciplined working capital, and strong cash generation. It wins not because it’s flashy, but because it’s reliable and integrated into thousands of IT budgets. The stock trades like a boring distributor, but the economics are much better than that.

Pitch Summary:
B&M European Value Retail is a variety discount retailer in the UK which has been in the portfolio since November 2022. The company’s disappointing results over last 12 to 18 months eventually resulted in the CEO’s resignation. During our investment period operating trends have weakened, and whilst some of this weakness was driven by the economic environment, the customer value proposition and management execution have both been diluted. We were not fast enough in recognising this and exiting the position. We are no longer shareholders.

BSD Analysis:
B&M is one of the quiet winners of Europe’s value retail boom, thriving as consumers hunt for bargains but still want recognizable brands at low prices. Its treasure-hunt merchandising model keeps traffic strong and turns inventory quickly, supporting enviable cash generation. New store openings remain highly accretive, particularly in the U.K. where B&M’s format is now mainstream. The company benefits from supply-chain flexibility and opportunistic buying, giving it gross margin advantages over traditional grocers. Consumer belt-tightening actually plays to B&M’s strengths, allowing it to capture share from mid-tier retailers. The model has been tested across cycles and consistently delivers high returns. Investors often underestimate how scalable this value format still is.