Small Cap Catch-Up: Pledges, Travelling, Designing And The Internet

H&T Group (LON:HAT) – now is the time for a very profitable pledge 

In just over a month’s time, we should be seeing the Trading Update for the year to end December 2023 being issued by the UK’s largest pawnbroking business. 

The group, which also is a leading retailer of quality new and pre-owned jewellery and watches, has been increasing its pledge book over the last year, so the recently agreed £10m additional facility from Allica Bank will be very useful for both its loan book and also helping the company investing in its store portfolio. 

Analyst Gary Greenwood at Shore Capital is very positive in his estimates for the group. 

For this current year he is looking for the group’s adjusted pre-tax profits to rise from £19.0m to £29.5m, lifting earnings up to 53.7p (37.2p), easily covering the dividend of 21.5p (15.0p) per share. 

He goes for £39.7m profits next year, 69.8p earnings and a 27.9p per share dividend. 

The company’s shares, which topped at 506p exactly a year ago, dipped to a year’s low at 373.52p in early August this year. 

They have since been gradually moving a lot better and yesterday touched 474p on low dealing activity. 

Regular readers will know just how keen I am on the investment attractions of this group, which I have been following for nearly four decades in its various forms. 

I consider that its shares, which closed at 460p, are totally undervalued and will very easily break back above the 500p level within weeks and slowly climb over 2024 towards the 600p earmark. 

(Profile 06.07.22 @ 332.5p set a Target Price of 400p*) 

Journeo (LON:JNEO) – Shares Ready To Edge Over 300p 

I make no apologies for making further mentions of shares that are the move – such as this leading provider of information systems and technical services to transport operators and local authorities. 

The latest Trading Update, for the current year to the end of this month, issued a week ago, was extremely positive. 

The group is doing better than market expectations and its management is confident of future growth. 

Analyst Andrew Renton at Cavendish Capital has a 385p Price Objective on the group’s shares. 

He is estimating that sales this year will have more than doubled to £46.0m (£21.1m) while its adjusted pre-tax profits could well have almost quadrupled to £3.9m (£1.0m), which would jack its earnings up to 20.6p (10.3p) per share. 

I have no doubt that further contract extensions and wins in the New Year will help to jump its shares way over the 300p mark and into a 280p to 350p trading range in the first half of 2024. 

They hit 280p at one stage yesterday before closing at 269p. 

(Profile 07.04.21 @ 95.5p set a Target Price of 120p*)     

Sanderson Design Group (LON:SDG) – Close Doubling Holding 

This group designs, manufactures, markets and distributes interior furnishings, fabrics and wallpapers on a global basis. 

It has several top names in its own portfolio and has major contracts with a number of top retailers like Sainsburys and Next. 

Apart from selling its products, it also derives licence income from such retailers and brand owners all over the world. 

On the face of it many would say that its shares look totally uninteresting, but I would beg to differ in opinion. 

It is a ‘class’ company with a massive global marketplace, making profits while also holding nearly 20% of its £86m market value in cash. 

So, I am not at all surprised to see that Close Asset Management has recently increased its stake quite significantly, almost doubling its holding to 10.03% (5.20%) representing some 7,191,015 shares. 

The average analyst consensus price forecast for the group’s shares is just over 200p, compared to the current 123p. 

These shares are for buying and holding. 

(Profile 24.04.23 @ 135p set a Target Price of 168p) 

Team Internet Group (LON:TIG) – Bidding Up In Buybacks 

Over the last few months, the global internet services group has been fastidiously buying back its shares as part of a £35m programme.  

Recently it has dropped to a spend of about £100,000 a day, however I did note earlier this week that it had increased its daily expenditure to around £125,000.  

The shares, which were up to 156p at one stage this year, have subsequently been a pathetic performer, with such inactivity only serving to bore many investors out of their holdings. 

And considering that the current share buyback programme could well continue to February/March next year, I believe that the group’s shares could well slip into the ‘beige portfolio’. 

The shares closed last night at 123.60p. 

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

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