PayPoint Group (LON:PAY) – Awaiting A Bullish AGM This Thursday
This coming Thursday, 1st August, will see the PayPoint Group holding its AGM, ahead of which I would expect to see the payments specialist publish its latest Trading Update.
It could be good enough to prompt some analyst upgrades to current expectations.
Currently, the £498m capitalised group’s shares are trading at around the 688p level, just a few pennies short of the 695p High over the last year, but still some way to go to hit the 744p of May 2020.
They will get there in my view, with my confidence being maintained that my 750p Target Price will be achieved.
The group’s innovative technology and services make it easier for tens of thousands of businesses and millions of consumers, through the provision of payments and banking, shopping, and e-commerce services and products in the UK.
The PayPoint Group serves a diverse range of organisations, from SME and convenience retailer partners, to local authorities, government, multinational service providers and e-commerce brands.
Its products are split across four core business divisions: Shopping; E-commerce; Payments and Banking; and Love2shop.
In mid-June the group declared its annual results to end-March, showing an 82.7% leap in revenues to £306.4m (£167.7m), while underlying pre-tax profits were 21.5% ahead at £61.7m (£50.8m), with earnings of 62.6p (60.3p) a share.
With those results CEO Nick Wiles stated that:
“This has been another year of progress for PayPoint where we have delivered a robust financial performance and made further progress towards delivering £100m EBITDA by the end of FY26.
These results reflect both the resilience of our businesses and the transformation delivered over the past three years as we unlock further opportunities and growth across our four business divisions.
In the current year, consumer behaviour across a number of our businesses remains subdued, reflecting continued tighter family budgets and a generally flat economy.
Our expectation is that the consumer outlook will improve during the course of the year.
Against this background, our streamlined organisational structure and cost base will support the delivery of our medium-term growth plans.
Strong earnings growth and cash flow generation, combined with a sustainable dividend policy provide a robust platform for the Board to propose further steps to enhance shareholder returns through a share buyback programme of at least £20 million over the next 12 months, all underpinned by the delivery of further progress in the current year.”
Analysts at Panmure Liberum rate the group’s shares as a Buy, looking for 1100p a share as their Price Objective.
Their current year estimates to end-March 2025 are for £190m sales, £67.3m profits, 69.9p earnings and a 38.7p total dividend (37.8p).
For the 2025/2026 year, they envisage £197m revenues, £72.1m profits, 77.4p of earnings and paying a 39.7p dividend per share.
At the current 688p that puts the shares out on just 9.8 times current year price-to-earnings and yielding a very attractive 5.6%.
This Thursday’s AGM Trading Update could prove to be a useful fillip for the shares, enough to get them trotting up to my Target Price.
(Profile 17.02.21 @ 598p set a Target Price at 750p)
Everyman Media Group (LON:EMAN) – Bigger Screen Presence
This group is the fourth largest cinema business in the UK by number of venues, and it is a premium, high-growth leisure brand with an emphasis on providing first-class cinema and hospitality.
Last week it announced its Interim Results for the 26 weeks ending 27 June.
It reported that cinema admissions in the period were 1.9m (1.6m), helping to boost revenues to £46.9m (£38.3m), average ticket prices were £11.76 (£11.49), while food and beverage spend per head was £10.47 (£10.25).
CEO Alex Scrimgeour stated that:
“We have once again delivered robust growth in both revenue and EBITDA during the first half, reinforcing our position as a leading player across the UK’s cinema landscape.
Our continued strong performance, driven by consumer appetite for the unique Everyman proposition, comes despite a marked reduction in film output following last year’s writer and actor strikes.
During the second half, we have an exciting slate of releases to look forward to and are confident in our ability to capitalise on the opportunity ahead.”
Analyst Mark Photiades, at Canaccord Genuity Capital Markets, rates the shares as a Buy, looking for them to quadruple in due course to his Price Objective of 200p.
His current year estimate, for the year ended 2nd January 2025, is for revenues of £108.0m (£90.9m) and with adjusted EBITDA of £19.3m (£16.2m).
That could see the group reducing its adjusted pre-tax loss very substantially, to only £0.8m (£3.4m loss).
For the coming year, his figures point to £136.0m in receipts, with £24.7m EBITDA and £2.4m profit, worth 1.83p per share in earnings.
I like this company, it is showing that it has the capability to achieve its strategic aims, which in my view will lift the group’s shares in reaction.
They are now trading at 52.50p, valuing the whole group at just £48m – far too low a rating for such growth in prospect.
My Target Price confidently holds very firm.
(Profile 23.08.23 @ 59p set a Target Price of 73.5p)
Volex (LON:VLX) – AGM – Performance And Mission Critical Comment
Another group holding its AGM on Thursday is this leading integrated manufacturing specialist for performance-critical applications and supplier of power products.
The group is considered to be a driving force in integrated manufacturing for mission-critical applications and a global leader in power and data connectivity solutions.
Its diverse operations support international blue-chip customers in five key sectors: Electric Vehicles, Consumer Electricals, Medical, Complex Industrial Technology, and Off-Highway.
From its Basingstoke headquarters, it orchestrates operations across 28 advanced manufacturing facilities, uniting over 14,000 dynamic individuals from 25 different nations.
With its end-June annual results, Executive Chairman Nat Rothschild stated that:
“We have doubled our revenues in three years, while maintaining impressive operating margins within our target range of 9-10%.
This demonstrates the success of our strategy to diversify our business, increasing the share of our sales involving complex products and managing costs effectively as we grow.
The transformative acquisition of Murat Ticaret has further enhanced our capabilities and solidified our market position.
Our strategic investments in FY2024 and those planned for FY2025 will expand capacity at key locations to meet anticipated future customer demand, positioning Volex for further growth by leveraging our dominant positions in attractive sectors.
With leading positions in our end markets, strong cash flow and robust financial position, we are ideally positioned to capitalise on the significant growth opportunities available to us.
Our acquisition pipeline remains promising, alongside incremental organic initiatives, underscoring our commitment to achieving our strategic goals.
Having started the new fiscal year with strong customer demand, we are confident of making further progress in FY2025 and we are firmly on track to achieve our five-year revenue target of $1.2 billion by the end of FY2027.”
Analysts at Peel Hunt rate the group’s shares as a Buy with a Price Objective of 400p a share.
They are estimating $1,010m ($913m) revenues for the current year to end-March 2025, with adjusted pre-tax profits rising to $88.0m ($77.0m), earnings of 37.3c (33.0c) and a dividend of 5.4c (4.8c) per share
The shares, which touched 363p a couple of weeks ago, are now 348p.
I like the feel of this group and its potential, certainly enough to hope that this week’s AGM sends out some more positive signals.
(Profile 27.06.24 @ 331p set a Target Price of 400p)
STV Group (LON:STVG) – Getting Even More Tuned-In
This media group is capitalised at just £125m, which is too low a rating as far as I am concerned.
It is described as Scotland’s home of news, entertainment and drama, providing audiences with top-quality programming on air, online and on-demand.
STV’s broadcast channel reaches 3m viewers each month, with a packed schedule across the day.
STV Player, its fast-growing streaming service, offers viewers across the UK home-grown and international drama box sets and a vast array of factual entertainment series.
STV Studios, its production company is one of the UK’s leading content businesses -and has an impressive track-record of success across a wide range of broadcasters and streamers.
On Tuesday 3rd September the group will be announcing its Interim Results.
For the current year to end December, analyst Roddy Davidson at Shore Capital Markets is looking for £165.8m of revenues (£168.4m), with adjusted pre-tax profits of £18.2m (£17.0m), lifting earnings to 27.4p (26.1p), easily covering a 12.0p (11.3p) dividend per share.
For 2025 he goes for a big uplift to £229.2m in sales, £24.7m profits, 36.6p earnings and a 12.4p dividend.
Johnathan Barrett at Panmure Liberum rates the shares as a Buy, looking for 370p.
After the uplift of the Euro matches and now the Olympics, viewer numbers must be on the increase.
Awaiting the imminent H1 results and accompanying Update, I am sure that I will not be disappointed, the shares are an excellent investment at the current 275p – I retain confidence in my 425p Target Price being achieved within the short-to-medium term.
(Profile 10.12.21 @ 345p set a Target Price of 425p)
(Profile 05.02.24 @ 188.5p set a Target Price of 235p*)
(Asterisks * denote that Target Prices have been achieved since Profile publication)