Small Cap Catch Up: AML, CURY, RFX And FNX

6 mins. to read
Small Cap Catch Up: AML, CURY, RFX And FNX

Aston Martin Lagonda Global Holdings (LON:AML) – Getting Financed Now To Fund Future Expansion

The shares of my favourite luxury car maker have been something of a dog over the last eight months.

They have gradually slipped back from a recent High of 396.20p, achieved at the end of last July, to a Low of 154.04p which was scored on Monday of this week.

Does it concern me?

No not really – although I am sorry for investors who bought into the stock in that period and that are still holding.

However, I suggest that they should hold very tightly to their current positions.

The company announced its 2023 Final Results at the end of February, showing an 18% growth in revenues to £1.63bn, while its pre-tax loss more than halved to just £239.8m (£495.0m) for the year.

The revenues were boosted by an increase in average selling prices of their vehicles to record levels, while demand has improved by 3% across the range, with some 6,620 (6,412) units wholesaled during the year.

With more new models being introduced this year it is apparent that even greater sales are anticipated in 2024 and 2025, taking the group up towards break even and then into profitability.

It is upon that trajectory that the group announced on Monday morning that it was launching an offering of £1.14bn aggregate principal amount of senior secured notes due 2029.

At the same time certain of its existing lenders entered into a new super senior revolving credit facility agreement, pursuant to which the lenders have agreed to increase their binding commitments by circa £70m to £170m.

This exercise will see the repayment of lines of the group’s borrowings, together with all the expenses so incurred.

The group should be posting out its Annual Report & Accounts on 8th April, with its AGM being held just over a month later.

There are some very major players in this group’s equity, with the bulk having been bought in at much higher price levels than at present.

With this stack of senior notes being issued and added RCF lines being made available – the company will have made massive strides in securing its financing to cover the next five years or its inevitable expansion.

The shares closed at 167.60p valuing it at just £1.38bn – hold very tightly.

(Profile 10.05.23 @ 213.5p set a Target Price of 265p*)

(Profile 30.10.23 @ 213p set a Target Price of 275p)

Currys (LON:CURY) – Is China Calling?

After two bids from the US investment group Elliott Advisers were rejected by the Currys Board, the hedge fund bidder made multiple unsuccessful attempts to engage with the electrical goods retailer’s Board while seeking further information upon which to possibly base a third offer.

The mooted 67p a share cash offer from Elliott was rejected by Currys on the grounds that it was significantly undervaluing the group.

Just last week the company received full approval for its disposal of its Greek interests trading under the Kotsovolos name, which should be completed within the next month.

That will boost the Currys coffers by about £156m, which will be used to reduce net debt and leave the group expecting to end the current year with a good cash balance at the bank.

But what about the potential interest of

The major Chinese online retailer, advised by Goldman Sachs, has until 5pm next Monday (18th) to either announce a firm intention to make an offer for Currys or state clearly that it has no intention of bidding.

Now with Elliott out of the way and with the ability to possibly talk with Currys, is it possible that will come in with a more acceptable bid.

If so, the market and large Currys shareholders appear to be clearly valuing its shares at way above the 80p level, possibly 90p plus.

Obviously with Elliott backing away the market dropped the shares down to 56.90p before cheap buyers took price advantage.

They closed last night on something of a slight rebound, at 61.80p

Hold very tightly, it feels as though there is more fun to come.

(Profile 10.07.23 @ 49p set a Target Price of 61p*)

(Profile 18.12.23 @ 50.05p set a Target Price of 61p-65p*)

Ramsdens Holdings (LON:RFX) – Confidence Inspiring

A good positive AGM Trading Update was given on Monday by this FX, pawnbroking, precious metals and jewellery specialist.

The Middlesbrough-based group, which has 167 stores across the country, informed investors that its trading for the first five months of the current year had remained strong and up to expectations.

Having recently secured a new £15m revolving credit facility with the Bank of Scotland, the group’s Board remains highly confident in its continued growth prospects and its expectations for the current financial year.

Analysts James Allen and Nick Anderson at Liberum Capital have a Buy rating on the group’s shares, looking for 290p in due course.

For the year to end September 2024 they estimate £89m (£84m) of sales, generating £10.5m (£10.1m) profits, earnings of 24.0p (24.0p) easily covering a dividend of 11.0p (10.4p) per share.

The analysts are looking forward to the £60m valued group declaring its next Trading Update in April.

The shares, which closed at 190p, offer very strong upside potential for medium-term investors.

(Profile 07.11.19 @ 204p set a Target Price of 250p*)

Fonix Mobile (LON:FNX) – Dialling In Now

When consumers make donation payments to Comic Relief and Children in Need or ITV, Bauer Media, RTÉ and Global Media, to name a few, they are charged to their mobile phone bill.

The service that Fonix provides can be used for ticketing, content, cash deposits and donations, by way of mobile payments and messaging services for clients across media, telecoms, entertainment, enterprise and commerce.

The mobile payments and messaging provider enjoyed good trading in its first half year to end December 2023.

Yesterday morning it declared its Interim Results and they showed 25.4% up in adjusted pre-tax profits at £7.4m, with earnings 16.35 better at halfway of 5.7p per share.

CEO Rob Weisz stated that:

“”We’ve made excellent progress on our strategic priorities in the period, once again nurturing significant growth from both established clients and newly onboarded customers alike.

As we have begun to explore overseas markets we have identified territories with favourable market dynamics and exciting growth potential.

At the same time we have continued to add significant additional depth to our product offering, expanding our competitive advantage and creating the founding dimensions for growth into the future.”

This group has a highly scalable business, it obviously offers something good in its services because it has suffered minimal customer churn over the last seven years or so – which is impressive.

It also helps to create strong elements of recurring revenues.

Analysts Michael Hill and Andrew Darley at Cavendish Capital Markets have current year estimates to end June for £72.6m (£64.9m) revenues, pushing adjusted pre-tax profits to £12.7m (£11.0m), with earnings of 9.7p (8.9p) and covering a healthy dividend of 7.8p (7.3p) per share.

For the coming year they foresee £78.7m turnover, £13.5m profits, 10.2p earnings and a dividend of 8.5p per share.

They have a Price Objective on the shares at 300p.

The group’s shares, which have been as low as 177p in the last year, closed last night 15.5p up on the day at around 258p.

Hold tight for higher pricing.

(Profile 01.02.21 @ 136p set a Target Price of 170p*)

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

Comments (1)

  • Tolle says:

    Ramsdens (and h & t) have nice steady growth models. However Mr market at the moment don’t seem to want to recognise/reward this. Such is the current life of even good small caps.

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