Mid-week Small Cap catch up featuring Flowtech, Brickability and RPS

Flowtech Fluidpower (LON:FLO) – a very steady drip feed

On Tuesday of next week (7) this specialist technical fluid power products supplier will be announcing its interim results for the six months to end June.

They should show first half revenues of £55.3m against £46.5m in the same period last year.

Andy Hanson and Rachel Birkett, analysts at Zeus Capital, estimate £104m revenues and £4.7m of adjusted pre-tax profits for the full year, worth 6.1p per share in earnings.

Next year they suggest £110.4m of sales and £8.7m of profits, with 11.3p of earnings per share.

Below I copy out exactly what Downing Strategic MicroCap reckon about the group in their latest Quarterly Newsletter;

“Flowtech announced a positive half year trading update, which showed a strong recovery in trading in the period with group revenues of £55.3m … so we are encouraged to see the strong revenue performance. There was some caution around cost pressures in H2, particularly through supply chain and logistics, but we are confident that recovering demand, particularly in the OEM sector, can offset headwinds.

Overall, we continue to think that the company is guiding market estimates conservatively and there ought to be upside to current consensus over the course of the year.”

House broker finnCap’s David Buxton sees similar profit estimates to Zeus, while sticking to a 175p a share price objective, against the current 129p.

There is a lot more upside in this stock and next week’s results statement will help the mood.

Brickability Group (LON:BRCK) – please publish an AGM Update

Next Tuesday, this leading construction materials distributor will hold its AGM at its offices in Bracknell, Berkshire.

I would hope for a positive chairman’s statement or update, but I suspect that one will not be issued.

That will be a shame because companies have very few legitimate occasions to talk to and inform shareholders about the companies that they jointly own – so I consider it very lazy of both the company’s management and its brokers and public relations advisers in not issuing such statements.

On a positive note, I have seen that Octopus Investments has just increased its stake in the group from 4.11% to 5.03%, up from 12.26m to 14.99m shares.

I remain a fan of the group and respect its ability to grow significantly over the next few years.

The shares are now 103p and remain a strong hold.

(Profile 16.04.20 @ 39p set a Target Price of 55p*)

RPS Group (LON:RPS) – ‘insiders’ buying pleases me

I really do like to see executives having stakes in the companies that pay their wages.

Especially so chief executives and finance directors – so when they appear on the lists I perk up and review their companies.

Just so with this multi-sector global professional services group.

John Douglas, CEO, purchased 100,000 shares @ 104.9p on Thursday of last week.

That takes his holding up considerably – he now controls 941,761 shares through a family trust account, as well as 1,117,722 shares in his own name.

That is a lot of money to have tied up, let alone to increase upon the investment. So good on you John. Now deliver more of the goodies please.

The shares mid-week are 110p and still offer very good upside.

(Profile 05.05.21 @ 88p set a Target Price of 110p*)

Totally (LON:TLY) – AGM Statement should be positive

I am hoping for a very positive AGM Statement on Tuesday of next week from Bob Holt, the chairman of this medical services group.

Recent contract announcements have been very encouraging and point the way for the group’s strong performance in the years ahead.

I recently upped my price objective for the shares and remain convinced about early attainment.

The shares at 37.5p have strong appeal.

(Profile 12.03.20 @ 12p set a Target Price of 18p*)

(Profile 25.06.21 @ 38.5p set a Target Price of 50p)

Westminster Group (LON:WSG) – taking the knee?

On Friday of this week this managed services and technology-based security solutions supplier will be presented with the Queens Award for Enterprise for its contributions to International Trade.

The company will be holding an Open Day for group clients, investors and other stakeholders at its Banbury offices, showcasing examples of the multitude of security technologies and solutions that it deploys around the world.

The mid-August announcement of its interims to end June was well received and highlighted the various contract wins that it has secured in 2021.

CEO Peter Fowler stated that “Not only are we seeing recovery and growth in our existing operations, but we are developing new initiatives and revenue streams, such as the Covid-19 testing programme, and in recent weeks and months we have announced several significant new large-scale, long-term contract wins that will produce a several million-pound step change in our annual revenues, together all underpinning confidence in our business model and growth trajectory.”

Around a year ago the shares were up to 8.27p and have since been down to 3.8p, but now at 5.7p they are looking cheap, especially so considering the group’s potential.

(Profile 17.03.21 @ 4.2p set a Target Price of 6p*)

(Profile 16.06.21 @ 5.75p set a Target Price of 10p)

Capita (LON:CPI) – institution looking to capitalise its holding?

Schroders last week increased their holdings from 16.05% to 18.37%, some 56.82m shares in this consulting, transformation and digital services business.

In early August, on announcing its excellent recovery results for its half-year to end June, CEO Jon Lewis stated that “We are delivering on our plans and remain on track to deliver organic revenue growth this year for the first time in six years and generate sustainable free cash flow in 2022.”

The group’s shares are now 49.2p, still a long way off my price aim, even so I believe that the good times will soon be rolling again as the company corrects itself.

(Profile 01.07.20 @ 44p set a Target Price of 66p)

Futura Medical (LON:FUM) – beginning to gel globally

Is this a stand-up announcement? Yesterday this sexual health and pain focused pharmaceutical development and drug delivery company stated that it has entered into a licensing agreement with m8 Pharmaceuticals.

Focused upon commercialisation in Latin America, m8 is a speciality biopharmaceutical company which is looking to take the MED3000 Erectile Dysfunction treatment into the Brazilian and Mexican markets.

Analyst Alistair Campbell at Liberum Capital rates the shares of Futura as a ‘buy’ with a price objective of 102.1p per share.

More commercialisation deals can be expected as it builds up its global network.

In the last year we have seen the shares rise to as high as 84p and they have flopped down to as low as 12.15p.

But now at just 39p I do believe that they could well perk up again, with 50p being a very easy aim.

SDI Group (LON:SDI) – more than doubled image

Copenhagen-based Danske Bank have recently been increasing their holdings in the digital imaging products company, taking their total up to 3,976,274 shares, some 4.01% of the equity.

Now trading at around the 190p level, the shares have more than doubled my Target Price and are up 250% on my Profile Price in less than a year, and yet they still look good value.

(Profile 28.10.20 @ 76p set a Target Price of 95p*)

Strix Group (LON:KETL) – no time to turn off yet

Last Friday this kettle safety controls group opened its new factory in Zengcheng in Guangzhou, China. It is now operational and significantly increases the company’s manufacturing capacity.

The group has a target of doubling its revenues over the next five years, so this will help its strategy substantially.

Andy Hanson at Zeus Capital sees the company raising its revenues for the year to end December from £95.3m to £122.1m, with profits of £36.5m (£34.6m) and earnings of 15.7p (14.8p). He reckons that the group’s shares trade on a discount to its peers in the sector.

Could the interims, due on 22 September, help to push estimates higher.

Equity Developments will be holding an investor webinar to discuss the interims on 24 September.

The shares at 377p have been a wonderful performer to date and I do expect their strength to be increased.

(Profile 31.12.19 @ 196p set a Target Price of 250p*)

D4T4 Solutions (LON:D4T4) – much more to check yet

The business efficiency software group informed its shareholders, at its AGM late last week, that it continues to trade in line with expectations. The business is delivering against its key performance indicators and is well positioned in its core markets.

The interim Trading Update should come out in the middle of next month.

With its shares now trading at around 370p they have increased in price impressively over the last sixteen months.

Hold tight.

(Profile 09.04.20 @ 170p set a Target Price of 215p*)

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