Small Cap Catch-Up – Windward, CML and Sylvania

6 mins. to read
Small Cap Catch-Up – Windward, CML and Sylvania

Windward Ltd (LON:WNWD) – With Interims Due Next Thursday, The Shares Continue To Be A Buy

On Tuesday morning this leading Maritime AI company announced that it had secured a contract with Peninsula Petroleum.

Peninsula is a global leader in the supply of marine fuels, with an international nexus and operations in all major world ports.

They deliver marine energy solutions from an integrated supply chain via a comprehensive global trading network.

Peninsula performs more than 25,000 deliveries per annum and is a trusted partner to over 2,000 customers in every corner of the globe. 

Their reputation for transparency, combined with a low risk tolerance, has garnered support from a wide range of stakeholders who collectively acknowledge Peninsula as a marine energy market leader.

Windward’s Maritime AI insights will be integrated directly into Peninsula’s compliance processes via API, providing legal and risk functions with a bottom-line risk score and flagged risk indicators for all vessels with which they are associated.

Embracing technology is one of Peninsula’s core pillars and in the world of bunker trading and supply, when decisions need to be made within minutes, Windward provides dynamic compliance feedback, which has a significant impact on decision making processes.

These valuable insights enable users to make go/no-go decisions with fewer false positives, allowing them to maximise efficiency and conduct more business.

CEO Ami Daniel stated that:

“As global regulations and sanctions become increasingly complex, it is essential for stakeholders to stay ahead of the curve so they can conduct business with greater confidence.

In line with this trend, we are seeing a growing number of companies across the industry turning to our Maritime AI to make better, faster and more informed decisions, and help them mitigate risk effectively.

With our Maritime AI solution, Peninsula’s legal and risk teams will be able to bolster their existing compliance programs with unparalleled insights into vessel activity, ownership structures, and company risks in real-time, providing them a holistic and accurate view of maritime risk, and enabling them to navigate the turbulent trade environment with ease.

This will enhance their day-to-day operations.”

Windward’s AI-powered solution allows stakeholders including banks, commodity traders, insurers, and major energy and shipping companies to make real-time, predictive intelligence-driven decisions, providing a 360° view of the maritime ecosystem and its broader impact on safety, security, finance, and business. 

The sector analysts at Canaccord Genuity rate the group’s shares as a Buy, looking for them to reach 115p within the next couple of years.

They are impressed by the expected first half to end June double digit organic growth, while the group’s cash burn has been halved.

The brokers noted that the 17% year on year revenue growth should accelerate in the second half helped by the growing 23% rate of annual recurring revenues.

It is still very early days in the development of this advanced technology group, however, I remain convinced that its shares will start to reflect its true potential for growth and attractive profitability.

The group will be announcing its Interim results on Thursday of next week (17th), when I look forward to a good descriptive comment on this year’s trading outlook to end December.

The shares, which touched 88p at this time last year, are currently trading at around 47p, which values the group at only £40.26m.

I see them rising well over the 75p mark quite soon.

(Profile 03.04.23 @ 37.5p set a Target Price of 47p*)

CML Microsystems (LON:CML) – These Shares Are An Even Better Purchase Now

The AGM Statement from this global communications market products developer reported a positive start to the current year to end March 2024.

CML develops mixed-signal, RF and microwave semiconductors for global communications markets.

The group utilises a combination of outsourced manufacturing and in-house testing with trading operations in the UK, Asia and USA.

CML targets sub-segments within Communication markets with strong growth profiles and high barriers to entry.

It has secured a diverse, blue chip customer base, including some of the world’s leading commercial and industrial product manufacturers.

Over the last three years, the group’s Board has successfully steered the business through a number of significant events.

It has delivered a return in excess of £24m to shareholders through a combination of dividends, capital repayments and share buybacks.

The AGM Trading Update noted that the Board is pleased with the progress being made by the business as it continues to successfully execute its strategic plan and remains excited by the growth that a combination of organic and acquisitive growth can deliver.

Analyst Martin Sullivan at Shore Capital stated that the new year has commenced positively, with the group remaining on course to achieve a year of further growth and improvements in revenues and operating profit in FY24F.

He has estimates for the year to end March 2024 for sales to rise to £23.1m (£20.6m), taking adjusted pre-tax profits up to £4.4m (£3.6m), with earnings of 27.3p (22.1p) and easily covering a 13.2p (11.0p) dividend per share.

Ian Robertson at Progressive Equity Research considers that the group is remains well placed to deliver strong revenue and profit growth over coming years as its next-generation wireless strategy plays out.

He says that CML is firmly on course with its strategy to exploit the opportunities in mixed signal, RF and microwave in the next generation of wireless technologies (5G, satellite, industrial internet of things, etc.), and he notes that the current forecasts extending to FY24 scarcely reflect this opportunity or the proposed Microwave Technology acquisition.

His figures are for £23.3m revenues this current year, with £4.2m profits, 19.8p earnings and paying a 13.5p dividend per share.

The group’s shares, now 432p, are well down on my late February Profile piece, however I have absolutely no worries about sticking my neck out now and saying that these shares are very much a good Buy.

(Profile 27.02.2023 @ 560p set a Target Price of 650p)

Sylvania Platinum – Significant ‘Tailings’ Joint Venture Makes The Shares Look Cheap

On Wednesday morning the platinum group metals producer and developer Sylvania Platinum (LON:SLP) announced a very significant agreement with Limberg Mining, the South African mining group.

The two companies are setting up a Joint Venture to process platinum group metals and chrome ores from historical tailings, dumps and current arisings from Limberg’s Chrome Mine in the Northern part of the Western Limb of the Bushveld Complex in South Africa.

The JV, to be named the Thaba JV, is a major step in delivery of Sylvania’s growth strategy and is a significant step forward for Sylvania Metals in expanding its operations and leveraging its expertise in the recovery of chrome and PGM concentrates.

The group has budgeted $32m for the project, which comes from the $125m cash balance as at its June year-end.

It is expected to take between 18 to 24 months to get into first production, estimated in H2 in 2025.

With its operations located in South Africa, Sylvania Platinum is a lower-cost producer of platinum group metals.

The Sylvania Dump Operations comprises six chrome beneficiation and PGM processing plants focusing on the retreatment of PGM-rich chrome tailings materials from mines in the Bushveld Igneous Complex.

The SDO is the largest PGM producer from chrome tailings re-treatment in the industry.

The £197m capitalised group is due to announce its final results for the year to end June on Thursday 7th September.

Upon this JV announcement analyst Ben Davis at Liberum Capital has upped his Target Price for the Sylvania shares from 110p to 122p.

The shares are currently trading at around the 72p level, at which the group is capitalised at £213.82m.

For buying and holding, that is my view on this group’s shares.

(Profile 22.02.23 @ 105p, set a Target Price of 130p)

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

Comments (0)

Leave a Reply

Your email address will not be published. Required fields are marked *