Small Cap Catch-Up: Reading, Borrowing, Chaining And Homing
Bloomsbury Publishing (LON:BMY) – So Good To Read
It is like a never-ending fairy story – the good news keeps on coming from this leading book and media publishing group.
Last Thursday morning’s Trading Update, as the group progresses through to its Leap Year end on 29th February 2024, made glorious reading for the group’s investors.
The company reported that its sales are comfortably ahead of expectations, while its pre-tax profits are materially ahead of current market hopes.
The Consumer Division saw the strongest advance, with notable sales made in a number of titles including the Sarah J Maas 15 titles, while the Poppy O’Toole Air Fryer book is very high in the best-seller lists.
Also continuing to do well, understandably, are the Harry Potter series.
CEO Nigel Newton stated that:
“I am delighted to report a strong period of trading which is principally driven by the continued phenomenal demand for fantasy fiction.
Bloomsbury has consistently built its success on the immense talent of our authors and the exceptional hard work of our teams who support them.”
Sometime next March, the group, which remains one of my chosen elite, will provide a further trading update on its performance for the current year.
The consensus market expectation is currently for revenue of £274.2m and profit before taxation and highlighted items of £32.9m.
The group’s shares, which were down to 390p when I highlighted them again in mid-October, touched 467p last Thursday before they closed at 456.50p on Friday night.
Expect even better reading in 2024.
(Profile 28.02.19 @ 231p set a Target Price of 257p*)
(Profile 27.03.19 @ 238p set a Target Price of 270p*)
Time Finance – Absolutely Flying
Yes, just like the approach of Christmas – Time is flying.
The shares of this £36m capitalised Bath-based asset and invoice finance company have been moving impressively ahead over the last couple of weeks.
They don’t have to advance too far to score meaningful points – but the move up from 28.50p in late September to hitting 39p at one stage last Friday represented some giant steps.
And as far as I am concerned the move over the 40p level and a lot higher is just as easy and a mere step away.
But then we are looking at real value, a small company that is now totally focussed upon its timely growth over the next few years.
The group is trading ahead of market expectations for the year to end May 2024, with brokers estimates of around £5.4m (£4.2m) pre-tax profits, worth 4.4p (3.5p) per share in earnings.
Already estimates for next year suggest £6.7m profits and 5.4p a share in earnings.
Consensus Price Objectives are around 47p a share, that leaves a good chunk of upside worth playing.
(Profile 23.12.20 @ 21.5p set a Target Price of 30p*)
(Profile 07.01.22 @ 23.5p set a Target Price of 30p*)
Renold (LON:RNO) – Not A League To Go Yet
Just over a month ago, when the shares of this Wythenshawe, Manchester-based engineered products maker were down at 29p, I set a new Target Price of 36p.
The recently announced Interim Results brought about profit estimate upgrades.
Analyst David Buxton at Cavendish Capital has fixed a 38p Price Objective on the group’s shares.
He is looking for a small step back in sales for the current year to end March 2024, from £247.1m to £244.3m.
However, he is expecting an increase in adjusted pre-tax profits to £19.2m (£18.6m), with earnings rising fractionally to 6.0p (5.9p) per share.
The group’s shares, which touched 35.59p last Thursday, closed on Friday night at 34.45p.
I have absolutely no concerns about my latest Target Price being achieved very soon, possibly within days.
(Profile 04.06.19 @ 30p set a Target Price of 60p)
(Profile 08.11.23 @ 29p set a Target Price of 36p)
Ultimate Products (LON:ULTP) – Every Home Should Have Some
At the start of last month, I questioned whether the change of this Oldham-based group’s name could prove to mark a gear change?
The shares of the consumer homeware products wholesaler were then 120p.
At that time I noted that analysts Clive Black and Darren Shirley, at Shore Capital, rated the group’s shares as a Buy, looking for 210p in due course.
Well, the intervening month has seen the group’s equity move up quite substantially,
The shares peaked at 155p last Wednesday, before ending the week at 149.50p.
Could there be an announcement around the time of the group’s AGM next Friday?
The analysts are expecting the current year to end July 2024 to show a lift in sales to £177.9m (£166.3m) while adjusted pre-tax profits could improve to £18.8m (£16.8m), with earnings rising to 16.3p (15.1p) and dividends of 8.1p (7.4p) per share.
Stay with the shares – there is so much more upside yet.
(Profile 13.07.20 @ 74.8p set a Target Price of 100p*)
Frasers Group (LON:FRAS) – Fit For A Further Rise
After hitting 926p on Friday, this retail group’s shares closed the day 4.50p better at 919p.
I have been suggesting that the empire’s shares are wrongly priced and have maintained my earmark aim of 1000p a share.
So, the gradual climb upwards over the last few weeks has encouraged me to confidently stick to my view.
We are now just edging towards striking distance of achievement.
After last week’s first-half results, clearly showing margin gains and growing cash generation, analysts Adam Tomlinson and Wayne Brown at Liberum Capital continue to rate the group’s shares as a Buy.
Not a cheap share in which to deal, but its rating is certainly below value enough to encourage further investor interest.
They could hit even the mark before the year end.
(Profile 28.07.23 @ 798p set a Target Price of 1000p)
(Asterisks * denote that Target Prices have been achieved since Profile publication)
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