Small Cap Catch-Up: Data, Castings, Cybersecurity and Domains

Made Tech Group (LON:MTEC) – Looking for 76p

Analysts Harold Evans and Kevin Ashton at Singer Capital Markets have a strong Buy out on this group’s shares, with a price objective of 76p, which is three times higher than the current market price.

They were impressed by the news from the technology and data services group of the £10m Home Office contract win.

Their estimates for the current year to end May 2023 are for sales uplifting from £29.3m to £43.0m, with the adjusted pre-tax profits gaining from £2.3m to £3.4m, raising earnings from 1.6p to 2.3p per share.

For the coming year their figures are for £50.0m sales, £4.1m profits and 2.6p earnings.

Furthermore, the brokers are reckoning that a lot more contracts could be in the offing, which backs up their 76p price aim.

At only 24.5p the shares offer significant upside.

(Profile 24.08.22 @ 34p set a Target Price of 45p)

Chamberlain Group (LON:CMH) – Do not cast this one aside

The specialist castings and engineering group is due to hold its AGM in Walsall on Wednesday 30 November.

The group’s brokers, Cenkos Securities, rate the shares as a Buy, clearly stating that the journey to full recovery continues.

They have estimated that current year revenues to end May 2023 will increase to £19.2m (£16.8m), with only a £0.3m pre-tax loss compared to £0.5m last year and a massive £8.9m negative in 2021.

For the coming year the brokers go for £22.2m sales, with a £0.3m profit, which is very encouraging.

It is always worth taking note of what the ‘insiders’ have been doing – with Chamberlin directors paying up to 5.1p per share to add their already significant holdings.

There have been some fairly chunky dealings in the last week, with 2.4m traded on Tuesday alone

Last night they closed at just 4.6p, at which level they offer good shorter-term investor attractions.

(Profile 29.07.22 @ 4.7p set a Target Price of 7p)

SysGroup (LON:SYS) – A 58p per share valuation

Next Monday morning will see the announcement of the end September interim results from this internet and media services company.

The sub-£15m capitalised SysGroup is a leading provider of managed IT services, cloud hosting, cyber security and expert IT consultancy.

It delivers solutions that enable clients to benefit from industry leading technologies and delivers managed solutions with security, compliance and governance from the core.

The company focuses on a customer’s strategic and operational requirements – enabling its clients to free up resources, to grow their core business and avoid the distractions and complexity of managing IT services.

The indications from the company, at the end of October, were to expect halfway revenues of £11.32m (£7.58m).

Analysts Bob Liao and Carl Smith at Zeus Capital have a 58p valuation out on the company’s shares, which closed last night at just 28p.

Rating the shares as undervalued the analysts are estimating revenues to have increased from £14.7m to £20.5m by the year end in March 2023.

They see pre-tax profits of £2.4m (£2.0m), with earnings coming in at 3.7p (3.4p) per share.

In the longer-term the analysts believe that the group could reach £50m revenues, with 30% EBITDA margins and taking its enterprise value up to £100m.

The shares are still a very good buy, especially so with increased Government-inspired contracts looming.

(Profile 22.06.22 @ 26.5p set a Target Price of 34p)

And finally…..

Watch out for the Q3 results from one of my favourite companies – the CentralNic Group (LON:CNIC) – to be announced next Tuesday morning.

The group is a global internet platform that derives recurring revenue from marketplaces for online presence and online marketing services.

The company drives the growth of the global digital economy by developing and managing online marketplaces allowing businesses globally to buy subscriptions to domain names for websites and email, monetise their websites, and acquire customers online.

Its core growth strategy is identifying and acquiring cash-generative businesses in its industry with annuity revenue streams and exposure to growth markets and migrating them onto the CentralNic software and operating platforms. 

For the current year to the end of next month we are now looking for revenues to reflect recent acquisitions rising 73% to $709.6m ($410.5m) with its adjusted pre-tax profits more than doubling to $68.7m ($31.9m) and lifting earnings to 20.9c (11.8c) per share.

That growth is what investors really need to be paying for by piling into the shares now at last night’s closing price of 127p.

They have been up to 153.77p earlier in the year and I see them hitting at least 180p in the short-term, whilst expecting to see 200p to 250p being a trading band in 2023.

(Profile 12.07.21 @ 89p set a Target Price of 110p*)

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