Mid-week small-cap round up featuring Cake Box, DX Group and Inland Homes

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3 mins. to read
Mid-week small-cap round up featuring Cake Box, DX Group and Inland Homes

Cake Box Holdings (LON:CBOX) – licking my lips

The record first half performance, by this specialist franchise retailer of terribly fattening really fresh cream cakes, was very well received by the market.

The first half to end September showed a 91.8% advance in sales to £16.47m and an impressive 122.2% improvement in pre-tax profits to £3.70m. That helped to push earnings up 116.2% to 7.46p per share, amply covering a 35.1% rise in its dividend to 2.50p.

Now with 174 plus stores in operation, with an increasing cash position of £2.4m, the group is very confident of its further progress and expansion.

Shore Capital estimate that the group’s sales will increase from £30m this year, to end March 2022, to £40m by 2024, with its EBITDA going from an estimated £7.8m this year to £9.9m in 2024.

Well worth noting is the fact that the broker estimates the group’s net cash rising from some £7.0m in 2022 to £15.2m in 2024.

This company really is a cash generator and the market has already accorded it with a very high rating, with its shares hitting 413p at one stage. They closed last night at 402p.

(Profile 30.07.19 @ 180p set a Target Price of 240p*)

DX (Group) (LON:DX.) – very good delivery

Just how many companies have you seen deliver a 6,000% rise in profits in the last year?

That is exactly what this delivery solutions provider revealed this week.

On a 16% rise in revenue to £382.1m for the 53 weeks to 3 July this year, the group returned adjusted pre-tax profits of £12m and earnings of 2p per share.

The group, which operates parcel freight, secure courier and logistics services, stated that “although there are ongoing trading challenges, including HGV driver shortages and global supply chain disruptions, the Board remains confident of further progress and DX continues to win new business and increase its market share.”

Analyst Guy Hewett at brokers finnCap estimates that group revenues will rise to £407.8m in this year to end June 2022, then up to £434.7m in 2023.

He sees adjusted pre-tax profits rising to £16.5m then £23.0m in the next couple of years, with earnings improving from 2.3p this current year then up to 3.3p per share in the 2022/23 year. His price objective is 57p, against the current 30p.

The ‘house broker’ is Liberum Capital, whose analyst Gerald Khoo rates the shares as a ‘buy’ having raised his aim from 50p to 55p.

I really do consider that as the group expands these shares have very strong upside potential.

(Profile 20.02.20 @ 12.5p set a Target Price of 15p*)

Inland Homes (LON:INL) – big forward sale shows potential

Following on from last week’s bullish Trading Update this ‘brownfield’ developer, housebuilder and regeneration specialist earlier this week made another good announcement.

It has agreed to forward sell 161 new homes at its Carters Quay, Poole, development. The buyer is the Bournemouth, Christchurch and Poole Council, who will pay a total of £43.5m over the next three years as the project progresses.

This is just a small part of Inland’s partnership housing division’s forward order book, which is now worth over £200m.

Between now and January, when the group announces its final results to end September 2021, it is more than possible that more good news will be flowing from the group’s boss Stephen Wicks.

The shares, now at 55.5p, have performed well since my recent profile, over 19% up in less than two weeks.

(Profile 13.08.19 @ 68p set a Target Price of 110p)

(Profile 24.10.19 @ 77p set a Target Price of 110p)

(Profile 29.10.21 @ 46.5p set a Target Price of 60p)

Angling Direct (LON:ANG) – Cyber-attack shuts down websites

Less than a month after declaring a good set of first half figures this multi-channel specialist fishing tackle products and equipment retailer has been hit by an unauthorised cyber security incident.

It closed down the group’s websites late last Friday, however its stores remained open.

Luckily the peak selling season for the group is over with the now fourth quarter of the trading year being at low trading levels.

As yet, we have no guidance on costs of the closures and what its bottom-line hit might be, no doubt we will get more updates in the near future.

The shares at 61.5p are down about 15% in reaction. Don’t be tempted to make any cheap purchases until more news is forthcoming.

(Profile 29.10.19 @ 58p set a Target Price of 100p)

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


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