Small Cap Catch-Up: Digging, Reading, Shipping And More

Keller Group (LON:KLR) – Feverishly Digging For Record Profits 

On Monday morning the world’s largest geotechnical specialist contractor informed investors that it was on track for a record year, with its operating profit expected to beat market hopes. 

The group’s shares hit 785p in reaction to the good news, up over 111p on the previous close. 

During the week they have drifted back slightly, upon understandable profit-taking after such a swift uplift in price, closing last night at 743p, but still up 70p on the good news. 

The group reported that positive trading momentum in the third quarter had been maintained following the Group’s exceptionally strong first half performance.  

Given its trading performance to date and the continued momentum in the business, the company now expects that the full year underlying operating profit will be materially ahead of current market expectations. 

CEO Michael Speakman stated that: 

“The Keller team has built on an exceptionally strong first half to deliver a better than expected third-quarter performance, and consequently we now expect full year underlying profit to be materially ahead of current market expectations.  

This performance reflects continued momentum and operational improvements within the business.” 

The £547m capitalised group provides a wide portfolio of advanced foundation and ground improvement techniques used across the entire construction sector.  

Operating on five continents globally, its 10,000 staff tackle an unrivalled 6,000 projects every year, helping to generate an annual revenue of some £3bn. 

Estimates for the full year to end December suggest that the group could more than double its earnings before tax from £56.3m to £118.0m, doubling its earnings to 124p (62p) per share. 

Last night the shares closed at 743p, that is some way below the 998p that they reached in August 2021. 

However, I consider that they will be up there again, so the shares are a Hold. 

(Profile 10.08.20 @ 643.5p set a Target Price of 750p*) 

Bloomsbury Publishing (LON:BMY) – Continuing To Be A Good Read 

Record first half results were announced yesterday by my favourite publishing group. 

They showed that the six months to end August finished with the group in a strong position financially, boasting some £39.1m in cash. 

That strength in earnings and on the balance sheet, gives the company the ability to back up its investment programme going forward, as well as enabling it to make a few acquisitions when considered appropriate. 

CEO Nigel Newton stated that: 

“Bloomsbury achieved our fourth consecutive double-digit growth in revenue and profit in the first half.  

These are also our highest ever first half results, with year-on-year revenue growth of 11% to £136.7 million and profit growth of 11% to £17.7 million.  

These results demonstrate the strength of our strategy of publishing for both the consumer and academic markets.” 

The Statement went on to note that the Board considers current consensus market expectation for the year ending 29 February 2024 to be revenue of £273.1 million and profit before taxation and highlighted items of £32.5 million. 

In reaction to the good Update the group’s shares touched 424p at one stage before closing last night at 405p. 

Two weeks ago, when they were standing at just 390p, I suggested that the shares were a good pre-Christmas Buy – they are certainly heading higher again so hold very tight. 

(Profile 28.02.19 @ 231p set a Target Price of 257p*) 

(Profile 27.03.19 @ 238p set a Target Price of 270p*) 

Braemar (LON:BMS) – Getting Ready For Some Cheap Stock 

With the way that the market is moving currently, on something of a switchback ride, it is probably best that there is yet another delay in the publishing of the accounts of this shipping services group. 

The company yesterday announced that the independent internal investigation has now been completed, however the resulting actions relating to the historic transactions identified in the investigation have taken slightly longer to implement than previously anticipated.  

That means that the company now expects to publish its final FY23 results in the middle of next month, with the FY24 interims shortly thereafter.  

The good news is that the Board expects to seek a restoration of the group’s listing after the publication of the FY23 results. 

The group provides expert investment, chartering, and risk management advice that enables its clients to secure sustainable returns and mitigate risk in the volatile world of shipping and energy. 

The 2023 results are expected to show revenues of £150m (£101.3m), while underlying operating profit is expected to double to over £20.0m (£10.1m). 

The shares were suspended at 233p in late June, after having hit 320p in February this year. 

I remain a big fan of this company, its Management and its prospects, so I will be very pleased to see a resumption of dealings in its equity. 

When the shares do get their quote back again, I feel that nimble investors may well be able to take swift advantage of the price action, especially when ‘locked-in’ holders rapidly retrieve their values by selling upon the re-quote. 

That would certainly be a very good time to jump in for a few, looking for a quick turn. 

(Profile 05.12.19 @ 185p set a Target Price of 250p*) 

(Profile 20.05.20 @ 99p set a Target Price of 150p*) 

Cykel AI (AQSE:CYK) – Shares Triple In Price 

Last Friday I suggested that AI gamblers should get ready to Cykel. 

On Wednesday of this week the new company saw the first day of dealings in its shares on the Aquis Stock Exchange. 

That followed a substantially oversubscribed funding, which raised £1.75m for the Artificial Intelligence product developer. 

AI is a fast-growing phenomenon and Jonathan Bixby, the Canadian entrepreneur behind NFT Investments, Argo Blockchain, Guild Esports and Cellular Goods, is the main mover in the new company’s equity as it rapidly develops its ‘software as a service’ products. 

Reflecting the possible explosion in prospects for the company’s marketplace, its shares floated at 3p, opened at 5p and hit 10p in early trading. 

They closed last night at 10.5p. 

Strictly for gamblers only until the £21.45m capitalised company starts to show its worth, however AI is such a ‘buzz’ currently, the shares could easily double, if not treble as punters begin to get switched on. 

(Asterisks * denote that Target Prices have been achieved since Profile publication)