Alumasc, Shearwater and More – All On The Move

Alumasc Group (LON:ALU) – Interims Due Within A Few Weeks 

Alumasc is a UK-based supplier of premium sustainable building products, systems, and solutions, the majority of which manage the scarce resources of water and energy within the ‘built’ environment, by using recyclable materials they also improve the quality of life for the owner/occupier. 

Almost 80% of its sales are driven by building regulations and specifications (architects and structural engineers) because of the performance characteristics offered. 

The group has three business segments with strong positions and brands in their individual markets: Water Management; Building Envelope; and Housebuilding Products. 

The company recently reported that its balance sheet remained strong, with good cash generation in the first three months of the new financial year, supported by management’s focus on working capital. 

As noted, the Board is mindful of the current demand headwinds, however it remains confident in the resilience of the Group’s business model and management’s ability to take effective action to reduce costs where necessary.  

In the AGM Trading Update, CEO Paul Hooper stated that: 

“I am pleased with the Group’s performance, in challenging trading conditions.  

Our excellent customer service and leading positions in a diverse range of end markets provide resilience, and we are continuing to progress our strategy, investing in areas where we see growth opportunities while controlling costs prudently where appropriate.  

With a strong balance sheet and a product portfolio which delivers environmental benefits to our customers, we remain well positioned to benefit from the eventual recovery in our end markets.” 

Analyst David Buxton at Cavendish Capital Markets has a high rating on the group’s shares, looking for 315p in due course. 

His current year estimates to end June 2024 are for sales to rise to £101.5m (£89.1m) while adjusted pre-tax profits could increase to £12.1m (£11.2m), taking earnings up to 25.1p (24.7p) and easily covering a 10.8p (10.3p) dividend per share. 

Buxton envisages a further increase in revenues next year to around£110.5m, with £13.1m profits, earnings of 27.1p and paying out a dividend of 11.0p per share. 

I have always been a fan of this group and its product ranges. 

With its shares currently trading at around 175p, the group is valued at some £63.4m. 

Ahead of its Interim Results in early February, the shares are gaining more attention, with dealing volumes looking a lot busier in this month alone. 

At this price they are a very strong hold while anticipating a clear break above the 200p mark, a level not seen for almost two years. 

An undervalued company whose shares, in my view, are due to very soon see them trading up towards the 222p level seen two years ago. 

(Profile 13.02.20 @ 116p set a Target Price of 145p*) 

(Profile 08.06.20 @ 80p set a Target Price of 105p*) 

(Profile 10.01.24 @ 183p sets a new Target Price of 222p) 

Shearwater Group (LON:SWG) – Corporate Recovery Is Now Underway 

It has not performed well subsequent to my previous COVID Profiles on this company, but I am now having another attempt at getting it right. 

Capitalised at £12.1m, the cyber-security, advisory and managed security services group, which has recently secured an attractive three-year contract with a leading global bank for its services, is UK-based but operates on a global scale. 

The company is expected to see its sales for the year, to the end of March 2024, rise from £26.7m to around £32.5m, spinning it around from its previous pre-tax loss of £1.3m to a profit of some £1.0m, worth 4.2p in earnings against a 0.4p loss per share. 

Estimates are already out there for the coming year to lift revenues to £37.0m, hoisting profits to £1.7m, worth just over 7p per share in earnings. 

It is the anticipation of this recovery, as well as its potential over the next 15 months, that makes the group’s shares at just 50.50p look an attractive counter in 2024. 

Analyst Price Objectives are just above the 100p mark. 

(Profile 14.04.20 @ 245p set a Target Price of 310p) 

(Profile 23.03.22 @ 118p set a Target Price of 145p) 

Braemar (LON:BMS) – Competitor Buying Into The Equity 

With the re-routing of trade routes around the Cape of Good Hope, the global shipping market is now reacting to container freight rates rising for the last six weeks in a row, getting back up to the higher levels of October 2022. 

It was quite a beneficial share price move on Monday, following the revelation that an ambitious Geneva-based shipbroking company has been putting together a ‘major shareholding’ in the group’s equity. 

The new holding notification to the market states that Lightship SA has bought some 1m shares representing 3.04%.  

That is said to be good news for players in the shipping sector, including shipbroker Lightship Chartering, which is 51.5% owned by Danish founder and chairman Morten Have. 

Sune Fladberg, the private company’s CEO is reported as stating that: 

“It’s quite simple, we believe strongly in shipping in the near future and are looking for opportunities to invest further in the industry. 

We think the valuation in Braemar is very attractive at the moment.” 

I reckon that the Lightship stake was purchased at around the 290p level, so at last night’s close of 300p, it is already showing its holding is well in the ‘swim’. 

After hitting 310.60p on Monday morning, further price rises to trade well into, the 300p to 350p range can be expected within the next few months. 

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

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

And Finally …. 

Billington Holdings (LON:BILN) – Ready To Take Out Cheap Stock? 

A week ago, just after the shares had hit 489p, I suggested that despite the excellent 2023 results expectations, they could be subject to profit-taking. 

Yesterday the structural steel products and safety solutions company saw its shares being clipped back to 410p on the back of, perhaps, some understandable position slicing. 

After all they have run up from 282.50p in late October, so a price-breather is to be expected. 

However, if they dip below the 400p mark within the next few days then I would suggest that more active investors should jump in and take out a line of this excellent group’s shares, well before the next corporate statement. 

The shares closed at 417p last night. 

(Profile 02.04.19 @ 266p set a Target Price of 314.5p*) 

(Profile 13.06.22 @ 217.5p set a Target Price of 295p*) 

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