Small Cap Catch-Up: Alternative Finance, Radio Frequency And Social Housing

3 mins. to read
Small Cap Catch-Up: Alternative Finance, Radio Frequency And Social Housing

Time Finance (LON:TIME) – Excellent Interims Due Within Days 

After publishing a bullish Trading Update three weeks ago, this £32.88m valued independent specialist finance provider is now looking towards its Interim Results being declared on Thursday 25th January. 

The Update declared that it had experienced ten consecutive quarters in the growth of its lending book, which has been reflected in significant increases in both its revenues and its profits. 

The group offers flexible funding facilities to small and medium-sized enterprises through asset, loan and invoice financing. 

Analyst Andrew Renton at Cavendish Capital Markets has a Price Objective of 47p out on the group’s shares currently. 

He is estimating that the revenues for the year to end May 2024 will be around £30.8m (£27.6m), taking adjusted pre-tax profits up to £5.7m (£4.4m), while generating earnings of 4.6p (3.7p) per share. 

For the coming year, he is going for £33.1m of revenues to help to push up profits to £6.7m, worth 5.4p per share in earnings. 

After having touched 39.80p in the second week of December, the group’s shares were down to 31p ten days later. 

However, they have since been edging back up again and closed last night at 35.50p. 

At that level I consider that these shares are offering capital gains for short, medium and longer-term investors. 

(Profile 23.12.20 @ 21.5p set a Target Price of 30p*) 

Filtronic (LON:FTC) – Interims Also Coming Soon 

Another set of Interim Results to look out for over the next few weeks are those due from this advanced radio frequency communications equipment group. 

Analyst estimates suggest that, on a 25% hike in current year sales to £20.5m, the group could well see profits leap over 800% to £0.8m. 

Recent order intake gives investor confidence going forward with expectations of an increase in both sales and profits in the year to end May 2025 – to £22.6m sales and £1.4m profits respectively. 

The £44.7m capitalised group’s shares are now trading at around the 21p level after having hit 24p a few days before Christmas. 

In my view, they will soon be up there again and heading even higher.  

(Profile 04.02.22 @ 11.6p set a Target Price of 14.5p*) 

Mears Group (LON:MER) – Miles Away And Shares Lifting 

I would like to wish David Miles, the former Chief Executive of this housing and social care sector services provider, the very best of luck as he settles into retirement away from the group that he helped Bob Holt to build up over the last three decades. 

A very pleasant and unassuming character, I always enjoyed his presence at various Mears Group presentations, lunches, dinners and company jaunts. 

Having stepped down from the role on 31st December, I am sure that he has left the group in firm hands and with a healthy corporate ability ahead of it. 

Employing over 5,500 people and managing and maintaining some 450,000 homes, the group is a leader in its sector. 

The company completed its second share buyback programme just before Christmas, seeing some 4.9m shares (4.7%) purchased at an average price of 270.9p per share. 

Combined with the first buyback that saw a total of 11% of the group’s equity, a total of 12.2m shares, being taken off the market, at an average 272.7p per share. 

We already know that the group is anticipating revenues for the full 2023 year of at least £1bn, helping to create an adjusted pre-tax profit of at least £40m. 

Over the last few weeks, the £308m capitalised group’s shares have been moving up, at one time touching 313.50p, before closing last night at 310p. 

Across four analysts who follow the group, the average Price Objective is 322.5p, whilst the highest aim is for 382p. 

However, the shares are getting even closer to hitting my Target Price, of which I remain ever confident. 

The big question, though, is just how well the group expects to do in the current year, with some estimates suggesting quite a fallback in both revenues and pre-tax earnings. 

We will have to await guidance from the company when it declares an end 2023 Trading Update, the date for which is as yet unknown. 

(Profile 21.06.23 @ 285p set a Target Price of 320p) 

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

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