Foxtons, Zotefoams, Renold and Time Finance – Four Firms With Excellent Prospects
Foxtons Group (LON:FOXT) – Is The For Sale Sign Still Up?
This estate agency group has the top spot in London while also having the largest lettings estate agency brand in the UK.
The group’s interim results to end June showed an 11% advance in revenues to £78.5m (£70.9m), with pre-tax profits 24% ahead at £7.5m (£6.1m), increasing earnings 36% to 1.9p (1.4p) and enabling a 10% higher dividend of 0.22p (0.20p) per share.
CEO Guy Gittins stated that:
“The strong momentum we started the year with has continued, with double-digit revenue and earnings growth and our position as London’s largest Lettings and Sales agency reinforced.
Despite macro headwinds and the election interruption, we continued to outperform the market, delivering strong Sales revenue growth of 28% and market share growth of 30%. Growth was also delivered in Lettings, with a double-digit increase in new business volumes, further bolstered by the acquisitions we made in 2023.
This growth is the result of the significant gains we have delivered in our market share of sales instructions, alongside the strengthening of our Foxtons Operating Platform and improvements to our market-leading data capabilities following considerable reengineering of the business over the last 18 months.
We are on track to deliver against our medium-term target of £25m to £30m adjusted operating profit.
Momentum can be felt across every aspect of the business and I am very excited about the second half and beyond as we work hard to deliver excellent results for the property owners of London and our shareholders.”
Analyst Greg Poulton at Singer Capital Markets rates the group’s shares as a Buy, with a Price Objective of 94p.
His current year estimate to end December is for £160.8m (£147.1m) revenues, adjusted pre-tax profits of £17.0m (£13.8m), earnings of 4.2p (2.8p) and a dividend of 1.10p (0.90p) per share.
For 2025 he goes for £167.5m in revenues, £19.7m profits, 4.6p earnings and a 1.30p dividend.
He sees the potential for upgrades as the year progresses, driven by continued outperformance in sales and growing from potential lettings acquisitions.
With the £204m group’s shares, which in late May this year were up to 71.40p, are now at 67p and are an excellent Hold, especially if there is a bidder in the wings.
(Profile 07.07.21 @ 60p set a Target Price of 76p)
(Profile 08.01.24 @ 49.25p set a Target Price of 61p)
Zotefoams (LON:ZTF) – New Chief Executive To Present Interims Next Tuesday
This £258m capitalised Croydon-based group is a world leader in cellular materials technology, and it is beginning to make some serious inroads into a part of the packaging market which could be quite revolutionary.
Next Tuesday morning will see the new Chief Executive, Ronan Cox, presenting the group’s interim results to the end of June this year.
The signals are good, with the market looking for this year’s revenues to rise to £141.0m from £126.9m in 2023, lifting adjusted pre-tax profits to £14.7m (£13.1m), with earnings of 22.3p (19.1p) and paying a 7.54p (7.18p) per share dividend.
For the 2025 year, analysts are projecting £150.0m revenues, £20.5m profits, 31.0p earnings and giving a dividend of 8.0p per share.
Analyst Caroline de La Soujeole, at Singer Capital Markets, rates the shares as a Buy, looking for 605p a share as her Price Objective.
Ahead of next Tuesday’s results Update, the shares are currently trading at only 526p, which offers some very attractive upside prospects.
(Profile 26.06.19 @ 600p set a Target Price of 750p)
(Profile 06.03.24 @ 330p set a Target Price of 395p*)
Renold (LON:RNO) – These Shares Have Real Pulling Power
I remain impressed by the end March 2024 results from this supplier of industrial chains and related power transmission products, it is the world’s leading manufacturer of chains, gears and couplings for a range of applications.
They showed that despite a 2.3% drop in sales to £241.4m (£247.1m) it increased its adjusted pre-tax profits by 18.8% to £22.1m (£18.6m), lifting its earnings up 20.0% to 7.8p (6.5p) per share, enabling a 0.5p dividend (nil).
CEO Robert Purcell stated that:
“I am pleased that the Group continued to perform strongly throughout the year reflecting the hard work, strategically, commercially and operationally that has been undertaken over recent years by our employees across the world.
The business is now at an inflection point where we are starting to see the compounding impact of the many recent exciting initiatives as they come to fruition.
We have a very clear strategy and are executing it diligently.
Our continuous improvement initiatives are building an increasingly efficient, productive and resilient business and are providing an ever improving platform to support our commercial initiatives.”
Analyst David Buxton at Cavendish Capital Markets is looking for current year sales, to end March 2025, of £243.2m, with £22.8m adjusted pre-tax profits, worth 7.1p per share in earnings and paying another 0.5p dividend.
For the 2026 year his estimates are for £248.5m revenues, £23.8m profits, 7.3p earnings and a 0.5p dividend.
His Price Objective is 75p, compared to the current 60.5p – which, in my view, still makes the shares an attractive purchase.
(Profile 04.06.19 @ 30p set a Target Price of 60p*)
(Profile 08.11.23 @ 29p set a Target Price of 36p*)
Time Finance (LON:TIME) – Looking Forward To Its Finals Next Month
This finance group’s shares, which touched 55p in the middle of July, are currently trading at just 51.55p, at which level I rate them as being ready for another upward push.
It considers that its purpose is to help UK businesses thrive and survive through the provision of flexible funding facilities.
The company offers a multi-product range for SMEs concentrating on Asset, Loan and Invoice Finance.
While focussed on being an ‘own-book’ lender, the group does retain the ability to broke-on deals where appropriate, enabling it to optimise business levels through market and economic cycles.
I look forward to the group publishing its audited final results and its Annual Report and Financial Statements for the year to 31st May 2024 on Wednesday 25th September.
In its Trading Update, issued on Thursday 27th June, the company gave guidance of a 20% increase in revenues to £33.0m (£27.6m) and a 38% improvement in pre-tax profits of £5.8m (£4.2m), while noting that its gross lending-book was up 18% to £200m at the end of May (£170m).
CEO Ed Rimmer stated that:
“I am delighted to provide this trading update in respect of Time’s full-year results which clearly demonstrate the ongoing success of the Group’s strategy.
To have delivered such growth, despite wider macroeconomic headwinds, is testament to the hard work of our team, to the clear focus on our strategy and the strong demand for finance from UK businesses which continue to prove remarkably robust.
What is especially pleasing is that the performance is based on maintaining appropriate margins, underwriting robustly and in keeping a wide spread of risk.
As a result, I am confident the Group is well positioned for future growth and in delivering further increased shareholder value.”
Analyst Andrew Renton at Cavendish Capital Markets has a Price Objective of 71p on this group’s shares.
He looks for the current year to end May 2025 to increase total revenues to £34.5m, with adjusted pre-tax profits of £7.2m, worth 5.8p per share in earnings.
These shares should be trading a lot higher than the current 51.55p, especially considering its profit growth potential.
(Profile 23.12.20 @ 21.5p set a Target Price of 30p*)
(Profile 07.01.22 @ 23.5p set a Target Price of 30p*)
(Profile 20.11.23 @ 32.5p set a target Price of 40p*)
(Asterisks * denote that Target Prices have been achieved since Profile publication)
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