Small Cap Catch-Up: Deliveries, Finance, Luxury Cars And Shipbroking
DX (Group) (LON:DX.) – Still Delivering Good News
The provider of delivery solutions, including parcel freight, secure courier, and logistics services, has just taken advantage of Tuffnells Parcels Express going into administration.
It has taken on an initial licence-to-occupy 13 former Tuffnells sites and agreed terms to purchase, for £1m cash, the freehold of a further site.
The initial licences are a precursor to entering into direct lease agreements.
The company has also agreed terms directly with a landlord for a long lease over a fifteenth site.
Furthermore, DX has hired over 250 former employees of Tuffnells since the Administrator was appointed.
Even better still, maintaining high customer service levels remaining as a priority, the company has taken on over 550 Tuffnells customers to provide continuity in delivery solutions, on mutually agreeable commercial terms.
Both of the group’s mains divisions, DX Freight and DX Express, will be gaining significant opportunities from the above agreements.
Analyst Guy Hewett at finnCap, who has a 57p price objective on the group’s shares, will be updating his estimates after the June-year end Trading Update is declared in mid-July.
While over at Liberum Capital, Gerald Khoo rates the shares as a Buy, looking for 50p.
In the middle of March, I suggested that the £203m group’s shares will be rising to at least 40p – I stick firmly to that aim.
The shares closed last night at 31.75p.
(Profile 20.02.20 @ 12.5p set a Target Price of 15p*)
Time Finance (LON:TIME) – Cautiously Optimistic
The shares of this alternative finance provider responded well yesterday to the £26m group’s announcement of its Trading Update for the year to end May.
It has come out with a note that its Lending Book is at an all-time high of £169m.
For the last year, it is guiding a 16% rise in revenues to £27.4m (£23.6m) and a 273% increase in pre-tax profits to £4.1m (£1.1m), lifting earnings 250% to 3.5p (1.0p) per share.
CEO Ed Rimmer stated that:
“These full-year results demonstrate the successful implementation of the Group’s Medium-Term Strategy.
Two years in, we remain on track to achieve our four-year plan’s stated targets.
We have built strong foundations for continued growth.
The Board is committed to further increasing shareholder value through the delivery of its stated strategy and continues to look forward with cautious optimism.”
Analyst Andrew Renton, at Cenkos Securities, rated the shares as a Buy as he upped his current year estimates to £30.1m revenues, £5.0m profits and 4.2p earnings.
For the 2025 year he is going for £33.1m revenues, £6.3m profits and 5.3p earnings per share.
The shares, which closed at 27.5p, are heading a great deal higher, so hold very tight.
(Profile 23.12.20 @ 21.5p set a Target Price of 30p*)
(Profile 07.01.22 @ 23.5p set a Target Price of 30p*)
Aston Martin Lagonda (LON:AML) – Just Look At Them Go!
Just ahead of this week’s Capital Markets Day for institutional investors and researchers the groupannounced a significant advance in the luxury car maker’s strategy.
It has entered into an important supply agreement with the Lucid Group to create industry-leading ultra-luxury high performance electric vehicles.
The cash and shares deal, which has a £182m cost to the group, covers integration and supply agreements that would provide Aston Martin with access to Lucid’s industry-leading technology for its battery electric vehicles, including electric powertrains and battery systems.
Aston Martin’s iconic brand, ultra-luxury craftsmanship and high-performance in-house engineering excellence, with Lucid’s advanced technologies and expertise in luxury electric vehicles, would create an unrivalled combination with the capabilities to re-define the customer experience for future Aston Martin BEV products.
The £2.5bn capitalised group’s shares touched 372p at one stage in reaction to the news.
Boss Lance Stroll was sounding very bullish about the group’s longer-term prospects, looking to double sales to £2.5bn by 2028 and getting profits up to £800m by the same time.
He has even predicted that the group could one day be making 17,000 cars a year, which compares to the 6,000 last year and the 7,000 hoped for this year.
The group’s shares, which closed at 342p last night, remain a strong hold.
(Profile 10.05.23 @ 213.5p set a Target Price of 265p*)
And finally ….
Braemar (LON:BMS) – Don’t Worry About Suspension
Whilst the experts from FRP Advisory are crawling over the booking of a $3m transaction back in 2013, that has some question marks overhanging, the shipbroking group’s annual results are being delayed.
That means that next week, 3rd July, the group’s shares will be suspended until both matters are concluded satisfactorily.
As far as I can see there is little to concern investors in the suspension, we already know that last year’s figures will be excellent when published.
The 12 months to end February are likely to report revenues up nearly 50% to £150m, while underlying operating profits could have doubled to £20m, leaving the £97.5m capitalised company with some £6.9m net cash at the year end.
The group’s shares fell from 308p a week ago to a low of 215p in response to the news.
They closed last night at 238p after canny investors took a bullish stance in the cheap shares before dealings went into limbo.
(Profile 05.12.19 @ 185p set a Target Price of 250p*)
(Profile 20.05.20 @ 99p set a Target Price at 150p*)
(Asterisks * denote that Target prices have been achieved since Profile publication)
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