Small Cap Catch-Up: Consultancy, Transport And Finance
Elixirr International (LON:ELIX) – A Watching Brief
Just a few weeks ago the shares of this challenger management consultancy group were winging away at their highest level for the last two years.
Having touched 665p at the start of this month, they have since drifted back to a 522.50p lower level, before closing fractionally higher at 535p on Friday night.
The 8th January Trading Update, hinting that the 2023 results will be in line with expectations, may well have taken the froth off the share price.
Also, it may not have helped that a Non-Executive Director of the company has sold off nearly 70,000 shares at 575p each, taking her holding down to 300,439 shares.
The March results announcement of the end December 2023 finals could well show the group’s continued growth.
Analyst Guy Hewett at Cavendish Capital Markets has estimates out for revenues to have risen to £87.5m (£70.7m), while adjusted pre-tax profits could come in at £23.9m (£19.3m), increasing earnings to 34.8p (30.5p) and increasing the dividend to 12.3p (10.8p) per share.
For the current year he sees £108.0m sales, £28.5m profits, 39.6p earnings and a 14.0p dividend per share.
The analyst compares Elixirr with its closest peer Accenture and suggests that the shares offer significant upside, setting a Price Objective of 998p a share.
I would consider that the shares may well ease back still more, before edging higher ahead of its March results.
(Profile 21.09.20 @ 227p set a Target Price of 285p*)
(Profile 06.02.23 @ 517.5p set a Target Price of 650p*)
Journeo (LON:JNEO) – Institutional Holders Dealing Away
Always sell into strength, is a well-known Stock Exchange maxim.
So, I cannot blame the Manager of the Downing Strategic Micro-Cap Investment Trust from taking advantage of this transport solutions recent share price upwards push.
Premier Miton Group reduced their holding, to 4.91% of the equity, in early November, when the shares were trading at around 210p.
Downing started to sell down some of their 6.62% holding in late December when they were 267p, with more shares going out at around 270p on 12th January, reducing the position to 4.58%.
More went out at about 280p a week later, down to 3.79%. some 625,000 shares.
Canaccord Genuity Group are currently the largest shareholder in the group, with 1,615,000 shares, representing 10.0% of the equity.
Mark Slater’s Slater Investments announced on the 10th of this month that it had also reduced its holding to 981,750 shares (5.96%).
At the end of last November, the information systems and technical services provider declared a bullish Trading Update ahead of the close of its year at end December.
Guiding profits to be ahead of expectations, CEO Russ Singleton stated that:
“Our continued strong performance in FY 2023 is reflective of a carefully laid strategy to work closely with our customers to develop leading technology products and services that encourage the use of public transport, while reducing emissions and traffic congestion.
Journeo’s acquisitions in 2023 are supporting domestic and international growth while creating more opportunities to integrate systems across transport modes.
We have an increasingly compelling offering, which combined with continued government support and investment in the sector is delivering our growth plans together with ever more advanced solutions for our customers.”
Analyst Andrew Renton at Cavendish Capital Markets has a 385p Price Objective out on the group’s shares.
His upgraded estimates show £46.0m (£21.1m) revenues for 2023, almost quadrupling its adjusted pre-tax profits to £3.9m (£1.0m), jacking earnings up to 20.6p (10.3p) per share.
Last year the group issued a Trading Update on 9th February, but I do not know whether there will be another Update before its finals are announced in late March this year.
The shares have been a strong market of late, closing at 292p on Friday night after 294p during the day.
This group’s shares have proved to have been an excellent growth stock for Master Investor subscribers.
We will have to wait to see whether there will be another Update shortly or, instead, just have to hold on until the March results to see whether we are going to expect even further growth this year.
(Profile 07.04.21 @ 95.5p set a Target Price of 120p*)
(Profile 24.03.23 @ 147.5p set a Target Price of 175p*)
(Profile 24.07.23 @ 183p set a Target Price of 200p+*)
Luceco (LON:LUCE) – Seeing The Light
On Tuesday morning we are expecting to see the latest Trading Update from this
supplier of wiring accessories, EV chargers, LED lighting, and portable power products.
Early last November the Q3 Trading Update noted that the group had been trading in line with expectations.
CEO John Hornby stated that:
“The Group continues to perform in line with our expectations.
Whilst demand from energy saving professional projects continues its positive path; we are seeing some impact of reduced demand in certain of our end markets as the UK consumer continues to experience economic headwinds.
Luceco’s strong cash generation in the quarter was particularly encouraging, and with our low levels of net debt, the Group is well placed to invest in growth and enhance earnings in line with strategic priorities.”
Analysts Charlie Campbel and Edward Prest at Liberum Capital rate the group’s shares as a Buy with a Price Objective of just 155p.
Their estimates suggest that sales to end December 2023 could have held fairly steady at £207m (£206m), with pre-tax profits of £19.9m (£19.4m), dropping earnings to 10.4p (11.0p) while maintaining its dividend at 4.6p per share.
For 2024 they go for £224m sales, £22.8m profits, 11.7p earnings and a 4.8p dividend.
It seems that the fund managers at BlackRock are hopeful of good times, having significantly increased stake to 16.10m shares (10.0%) in this month alone.
The shares closed at 158.70p on Friday night.
Hold tight.
(Profile 15.06.20 @ 96.1p set a Target Price of 125p*)
Time Finance (LON:TIME) – Ready To Travel Higher
With its lending book standing at record levels after ten quarters of consecutive growth, this specialist finance provider is reflecting continued strong demand for its alternative finance products.
The Interim Results to end November reported revenues up 19% at £15.7m (£13.2m), while its pre-tax profits were up 35% at £2.7m (£2.0m), lifting interim earnings to 2.33p (1.73p) per share.
Non-Executive Chair Tanya Raynes stated that:
“These results show that our focus on own-book lending continues to deliver a strong trading performance.
This is particularly encouraging given the wider economic headwinds and demonstrates UK SMEs’ robust demand for funding from a truly customer-focussed, multi-product provider of finance like ourselves.
The strategic positioning of the Group within the market has enabled it to generate increasing levels of demand whilst also maintaining control of credit and spread risk.
As a result, the Group is well positioned to deliver further growth and increased value to our shareholders.
We look forward to being able to report on further progress at the year-end.”
Analyst Andrew Renton at Cavendish Capital Markets is looking for the full year to end May 2024 to show revenues up to £30.8m (£27.6m), adjusted pre-tax profits of £5.7m (£4.4m), hoisting earnings up to 4.6p (3.7p) per share.
The shares, which touched 39.80p in the middle of last month, did not quite break through the 40p level that I sought in my mention on 20th November last.
Having eased back to 32p by 16th January, they are now looking a lot firmer, closing on Friday night at 39.70p.
I really like this £37m capitalised group and see its shares going considerably higher yet.
(Profile 23.12.20 @ 21.5p set a Target Price of 30p*)
(Profile 07.01.22 @ 23.5p set a Target Price of 30p*)
(Asterisks * denote that Target Prices have been achieved since Profile publication)
Out of your chosen companies I prefer elixirr and time. The declared profit with time from own book lending compounds over the loan length . Journeo , I just don’t get where the recurring revenue comes from once they have completed a contract, say they did west coast line to Glasgow. Once machines etc installed where is the recurring revenue ?