ME Group International plc (LON:MEGP) was discussed by Gervais Williams, Co-Fund Manager of The Diverse Income Trust plc (LON:DIVI) in a wide-ranging exclusive interview about the Trust and LSE-listed companies in his portfolio.
DirectorsTalk asked:
ME Group International announced in December that their financial year 2024 would be another year of record profit and financial performance. Its share price is a perennial good performer, and it pays a dividend. This looks like a strong contributor to the Diverse Income Trust portfolio?
Gervais Williams commented:
We all think of ME Group as related to the photo booths, which it does have, and they continue to generate some cash, but the real growth of this story is coming through in installing large washing machines in the car parks of supermarkets. The advantage is that if you are someone who’s involved in Airbnb, for example, you want to get all your washing done, possibly even need to wash the duvets, you can put them all into these very large washing machines. You can go off and do your shopping and 30 or 40 minutes later come out, they’re washed and dried, you put them straight back onto the bed.
This is an area where actually we’ve seen strong demand. In fact, just recently they’ve announced a further extension with their Morrisons contract, which will extend them to over 200 of the UK Morrisons stores. We’re seeing this actually being an attraction, not just for them to generate a return, but actually the supermarkets like it because they get customers coming to them rather than a different supermarket.
So, it’s actually already outperformed but we think there’s plenty of scope for this company to continue doing well going forward.
Diverse Income Trust plc invests primarily in quoted or traded UK companies with a wide range of market capitalisations, but a long-term bias toward small and medium sized companies.
