Small Cap Catch-Up: RF, Processes, Ports And Building Products
Filtronic (LON:FTC) – Driving Stronger Profits And Margins
Yesterday’s results from this advanced radio frequency components, antennas and communications equipment manufacturer pleased the market.
The company designs and makes sub-systems for the aerospace, defence, telecoms, infrastructure, space and critical communications markets.
The £64m capitalised Sedgefield-based group, which announced £7.8m of new contract orders on Monday, reported almost unchanged revenues for the six months to end November 2023 at £8.5m (£8.4m) contributing to a first half adjusted EBITDA of £0.2m (£1.0m).
Analysts Kimberley Carstens and Edward Stacey at Cavendish Capital Markets are now looking for the current year to end May to show £23.5m sales (£16.3m), helping to shoot adjusted pre-tax profits up to a very healthy £2.5m (£0.1m), taking earnings up to 1.1p (0.1p) per share.
The analysts have a 37.5p Price Objective on the shares, which closed last night up 4.10p on the day at 29.60p, a useful 16.08% gain on the back of some 1.96m shares traded, over six times the daily average.
Analyst Katherine Thompson at Edison Investment Research is also sounding very bullish about the group’s prospects,
She is looking for current year sales of £23.6m, pre-tax profits of £2.3m, with 1.07p per share in earnings.
I can see why the analysts have fixed their price aim, however, after this recent climb it is sensible to allow for some profit-taking to clip them back a bit, before their next push higher ahead of further contract news and the June Trading Update.
(Profile 04.02.22 @ 11.6p set a Target Price of 14.5p*)
(Profile 04.01.24 @ 21p set a Target Price of over 24p*)
MPAC Group (LON:MPAC) – Processing Well
In my mention on this packaging equipment group on 17th January I noted that, following its latest Update and subsequent broker’s comments, the group’s shares were a strong Hold for existing shareholders and were a bargain at 345p for new investors.
House broker Shore Capital Markets was very positive about the group’s potential and put out a valuation on the shares of over 400p.
On Monday morning this week the group’s shares responded well to a tip from Lucy Tobin in The Mail on Sunday, closing up 8.6% better on the day at 410p, showing a useful 32.50p gain on the back of more than four times the average daily dealing volume, with 254,776 shares traded.
The £84m capitalised company, which should be declaring its results for the year to end December 2023 in the week starting 18th March, has already started this current year with an increased order book and a strong balance sheet, helping to push it forward.
Expect the shares, which closed up another 15p at 425p, to ease off a bit on the back of profit-taking, before moving ahead again.
That was the highest at which the shares have changed hands for two years.
(Profile 19.12.19 @ 182p set a Target Price of 235p*)
Global Ports Holding (LON:GPH) – Cruising Ahead
Apparently, there is a global push in the cruising sector, with bookings being reported by cruise line operators as growing at some pace.
In response, analyst Greg Johnson at Shore Capital Markets, on Monday of this week, upped his estimates for the world’s largest independent cruise port group.
He is now looking for this group’s revenues for the year to end March 2025 of some $182.6m (est. 2024 $160.4m), whilst the adjusted pre-tax profits could leap to $28.4m (est. 2024 $5.7m), which could see earnings of 15.9c (est. loss 8.8c) per share.
The broker is viewing that the group’s shares will be worth 400p in due course.
The shares, which touched 290p last November, closed last night at around 240p, valuing the group at £163.3m.
Hold very tight for further share price rises to come in 2024.
(Profile 11.11.22 @ 81.5p set a Target Price at 100p*)
(Profile 19.06.23 @ 196.5p set a Target Price of 220p*)
Porvair (LON:PRV) – Exuding Confidence
Two months ago, ahead of Monday’s final results announcement from this specialist filtration, laboratory and environmental technology group, I commented that the company’s shares could well be heading back up to break the 700p level that they peaked at in February last year.
The shares were then 610p, they subsequently eased back to 592p before gradually climbing back up to 678p late last week.
The latest results were very good and reported that despite only a 2% increase in revenues at £176.0m (£172.6m) the group saw a 10% rise in its adjusted pre-tax profits at £21.4m (£19.4m), which generated a 12% improvement in earnings to 37.2p (33.2p), enabling a well-covered 6.0p (5.7p) per share dividend.
The company is optimistic for the current year and beyond, with CEO Ben Stocks exuding confidence in extending its consistent longer-term trading record.
The shares closed last night at 650p, with my latest Target Price still being a very close prospect.
(Profile 05.10.20 @ 510p set a Target Price of 600p*)
(Profile 17.08.23 @ 605p set a Target Price of 700p)
AG Barr (LON:BAG) – Time To Slice Off A Few?
I get the feeling that quite a few market watchers are not too keen on the appointment of Euan Sutherland as the IRN-BRU maker’s new CEO.
Sutherland, who has previously been involved in the management of Superdry, Saga and the Co-op Group, also has Mars, Coca-Cola and Britvic episodes to his name.
However, it appears that he has some close connections to the Barr family and its factory was built on part of his grandmother’s farm!
Whether those elements of his CV will pay off for Barr’s shareholders will be seen in due course.
The £620m capitalised group, saw its shares hit 581p last Thursday after the latest strong Trading Update, before being sold down to 542p over the last few days.
The final results to 28th January this year will be revealed on 26th March.
Analysts Clive Black and Darren Shirley at Shore Capital Markets upgraded their estimates for the last year to go for revenues of £401m (£318m), adjusted pre-tax profits of £49.5m (£43.5m), earnings of 33.1p (29.4p) and a dividend of 13.7p (13.1p) per share.
For the year now underway they see £420m turnover, £52.0m profits, 34.8p earnings and a 15.3p dividend.
My gut feeling is that the group’s shares could well ease off as they take a breather – after all they have risen from 475p in the last two months.
(Profile 31.07.20 @ 444.5p set a Target Price of 525p*)
Alumasc Group (LON:ALU) – Further To Climb In Price
Following yesterday’s Interim Results announcement from this ‘roof to drain’ building products supplier, analyst David Buxton at Cavendish Capital Markets maintained his Price Objective on the group’s shares.
Revenues for the six months to end December 2023 were 6.4% ahead at £47.8m, while the group’s adjusted pre-tax profits were 12.4% better at £6.3m.
However, earnings per share at the halfway stage were only 6.2% better at 13.0p, which reflected the higher tax charge.
For the full year to end June Buxton is going for £101.5m (£89.1m) sales, £12.1m (£11.2m) profits and earnings of 25.1p (24.7p) but with an increased dividend of 10.8p (10.3p) per share.
For the 2025 year he estimates £110.5m takings, £13.1m profits, 27.1p earnings and 11.0p in dividend.
His Price Objective of 315p compares with last night’s closing price of just 178.50p.
I stand firm with my latest price aim.
(Profile 13.02.20 @ 116p set a Target Price of 145p*)
(Profile 08.06.20 @ 80p set a Target Price of 105p*)
(Profile 10.01.24 @ 183p set a Target Price of 222p)
(Asterisks * denote that Target Prices have been achieved since Profile publication)
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