Small Cap Catch-Up: Fans More Than Hot Air

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Small Cap Catch-Up: Fans More Than Hot Air

Volution Group (LON:FAN) – Trading Update Due Thursday Morning

Thursday (20th) should see a positive announcement from this international air quality solutions group.

The interims out in early March pointed the way for a good full year advance, we should get confirmation of that happening in this Trading Update for the full year to end July.

This group has to be fairly unique on the M&A front, it has completed more than 20 acquisitions since it floated in 2014, the latest earnings enhancing deals in Slovenia and France.

Analyst Charlie Campbell at Liberum Capital rates the group shares as a Buy, looking for 460p a share against the current 361.20p.

His estimates are for the year to end on £324m of sales (£308m), while pre-tax profits could have increased from £60.9m to £62.9m, listing earnings fractionally higher to 24.5p (24.0p) and more than triple covering the 7.5p (7.3p) dividend per share.

For the coming year to end July 2024 his figures suggest £347m sales, £66.8m profits, 25.7p earnings and a 7.8p dividend.

Looking forward Campbell’s forecast are for £366m turnover in 2025, creating £72.0m profits,27.6p of earnings and a healthy 8.4p dividend.

The Trading Update will, hopefully, be even more positive in nature and underline the attractions of this global operating group’s prospects.

The group is capitalised at £750m with its shares at 361.20p – I see them climbing back up to the 450p level at which they peaked in mid-May this year.

(Profile 23.05.19 @ 174p set a Target Price of 250p*)

Futura Medical (LON:FUM) – Getting Het Up Again

The news of this group’s latest distribution agreement, with Haleon to commercialise MED3000 in the US, has sparked some life into the company’s shares.

The pharmaceutical company, which is developing a portfolio of innovative sexual health products based on its proprietary, transdermal DermaSys® drug delivery technology, has entered into a ground-breaking licensing agreement with Haleon, a world leading consumer healthcare company for the USA rights to exclusively commercialise Futura’s innovative topical, gel-based Erectile Dysfunction treatment MED3000.

CEO James Barder stated that: 

“This agreement, with one of the world’s leading global consumer healthcare companies represents a major milestone for Futura, following on from our recent US FDA approval for MED3000 as the first OTC topical gel approved for ED. The USA is the largest ED market in the world and we believe Haleon, with its strong capabilities in brand-building and marketing through an unrivalled breadth of channels, as well as its connections and market reach makes it the ideal partner to introduce MED3000 to the millions of ED suffers in the USA who will soon be able to buy MED3000 in US pharmacies, without the need for a doctor’s prescription.”

Just a month ago this group’s shares had really perked up, hitting 67p, before succumbing to some profit taking, which clipped them back to 50p last Thursday.

Last night they closed at a little firmer at 54p, with analyst Seb Jantet at Liberum Capital rating them as a Buy, looking for an upgraded 152p a share.

Investors can anticipate an even greater rise in due course.

(Profile 14.03.19 @ 15p set not Target Price)

ECO Animal Health Group (LON:EAH) – Cautious Optimism

Five years ago this group’s shares were trading at 520p, last night they were just 106p, having been as low as 81p last August.

The £74m capitalised company, which develops, registers and markets pharmaceutical products for animals on a worldwide basis, had suffered difficult market conditions and obstacles.

However, the recently announced results for the year to end March 2023 which showed an encouraging growth in group revenues and profitability after having suffered quite a hit over the last few years.

But now recovery is on the cards and its momentum is returning.

I will be speaking to new CEO David Hallas early next week and will report back to you with my views.

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

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