Is it as simple as ABC? – ALU, BMS and CNIC

5 mins. to read
Is it as simple as ABC? – ALU, BMS and CNIC

The Alumasc Group (LON:ALU) – a dearth of news has not helped

I always feel uneasy about a quoted company that does not post regular updates or news about its corporate doings.

This company posted its interims in early February, a few days later three of its directors bought stock at prices from 211p to 225p each, since when we have only seen a change of auditor notice posted in April.

So, a deathly hush has not given the market much confidence.

Not even a Pre-Close Trading Update for the end June period has been published.

Nothing at all, during which time we have seen the shares ease back.

They touched 276p in mid-July last year, within a year they had more than halved in price to 135p.

When the Interims were announced on 8 February Paul Hooper, Chief Executive of Alumasc stated that:

The Alumasc Group reported a solid performance during the first half and is on track to deliver its expectations for the full year. Although there were some headwinds experienced due to Covid-19 driven contract delays and cost inflation across the industry during the period, the business performed well and has good momentum going into the second half.”

Analyst David Buxton, at finnCap the group’s NOMAD, had estimates out for the year showing higher sales at £97.0m (£90.5m), with a miniscule rise in adjusted pre-tax profits at £10.8m (£10.5m), while adjusted earnings were 23.6p (23.7p), but with an estimated rise in dividend to 10.0p (9.5p) per share.

His price objective for the shares was 315p against the then trading price of 222.5p.

So, what will the imminent figures show and what will the current trading prospects look like – those are the big questions.

The last few months of enduring continuing supply chain difficulties, the Ukraine War, the hike-up in fuel costs, together with the inflationary pressures – none of those hassles were likely to have helped Alumasc.

Instead, the company has said nothing and just left the market in somewhat of a limbo any effects.

On Tuesday 6 September this Kettering-based sustainable building products, systems and solutions group will be announcing its final results for the year to end June this year.

Last night the shares closed at just 139p, at which price they indicate an almost total lack of interest in the £50.3m market capitalised company or its trading prospects.

I am a generally positive person and look for the best of outcomes, while paying attention to the possible downsides.

But with this lack of corporate information, it is a bit unnerving.

However, tempting as it is to suggest the shares are far too cheap, I will refrain from making any such comments or opinions until more is known – so holders just have to keep on treading the water.

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

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

Braemar Shipping Services (LON:BMS) – Review ‘shake-up’ renews confidence

Well now we know – on Tuesday 30 August, this £91.5m shipping services group will finally be announcing its final results for the year to end February 2022.

It will also be updating the market on the current year’s trading and prospects.

On Wednesday of this week Nigel Payne, the group’s Chairman, stated that:

“Over the past year and a half, the new board of Braemar has made substantial progress in laying the foundations for growth, clarifying Braemar’s strategic direction and substantially increasing its profitability.

Loss-making businesses have been closed, central costs have been reduced, the core shipbroking business has been expanded, the board has been strengthened, bank debt has been reduced to near zero and dividend payments have been restored on a progressive basis.

These improvements have enabled Braemar to deliver strong trading results for the year ended 28 February 2022 and improve further still with exceptionally strong trading in the current financial year.”

There will be some interesting developments thrown up by the recent Strategic Review and their accompanying accounting issues, which have already been notified by the group.

However, it is suggested that overall, the balance sheet has not suffered.

Payne has stated very clearly that we continue to look to the future with a high degree of confidence.”

The shares closed last night at 284p.

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

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

CentralNic Group (LON:CNIC) – broker has a 221p price objective on the shares

On the same day as BMS make their announcement (30 August), this global internet platform company will be declaring its interim results to end June.

As I have stated many times before, this company really does tick all of my boxes.

On 18 July the group announced its first half-year Trading Update – it was very positive.

It reported that H1 revenues were up 92% at $335.0m ($174.7m), while its adjusted EBITDA was 85% better at $38.0m ($20.5m).

At that time Ben Crawford, CEO of CentralNic, stated that:

“CentralNic has enjoyed a strong first half of the year with year-on-year organic growth now reaching a record 62%, a further improvement over the 53% reported for the twelve-month period ending 31 March 2022.

CentralNic continues to deliver sustainable growth thanks to our privacy safe solutions and the enormous scale of the market opportunities we are addressing.”

Analyst Bob Liao, at Zeus Capital the group’s NOMAD and joint broker, upgraded his estimates for the year to end December.

He is now going for $617.1m ($410.5m) of revenues, with the EBITDA at $70.0m ($46.3m) and earnings rising to 17.4c (11.8c) per share.

For 2023 his estimates are for $654.1m of sales, $75.7m of EBITDA and 18.8c of earnings per share. In addition, he also indicates the possibility of a 0.8c dividend per share.

For 2024 he has $693.4m of revenues, generating $79.7m EBITDA with 20.2c of earnings and a 1.8c dividend per share.

He appreciates, as I do, the long track record of accelerating growth, its strong profits and cash generation.

Accordingly, he has put out an increased valuation of CentralNic shares from 195p up to 221p per share.

The shares, which touched 153.77p last November, closed last night at 119.75p at which level I would encourage new investors to jump aboard and secure a good holding now at these bargain price levels.

(Profile 12.07.21 @ 89p set a Target Price of 110*)

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

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