Small-cap mid-week round-up: featuring Braemar Shipping and more…

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Small-cap mid-week round-up: featuring Braemar Shipping and more…

In this weekly summary, Mark Watson-Mitchell updates his readers on previous company profiles and other news of interest from the exciting world of small cap stocks…

Braemar Shipping Services (LON:BMS) – finnCap aiming for a 70% uplift in share price

Yesterday’s results were not disappointing. For the year to end-February 2020 revenues were up from £117.9m to £120.8m, while pre-tax profits were fractionally better, up £0.1m to £9.5m. Earnings came in at 22.4p and there was a total dividend of 5p per share for the year.

The group’s shipbroking side did well with its operating profits up 26%, helping to cover the weaker performance in its engineering and financial divisions.

It appears that already in this current year the shipbroking business has started well and its order books are strong.

Obviously, the group has been impacted by Covid-19; however, the brokers are estimating only a £4.3m drop in revenues for the year to end-February 2021, with pre-tax profits easing to £7.7m, which would give earnings of 18p per share.

Already the brokers are seeing a recovery in sales to a recent record £122.9m for 2022. With profits of £8.9m and earnings of 20.9p per share.

For this year and next, finnCap see the earnings easily covering 5p a share of dividends.

These results were actually better than the market was anticipating.

And its shares look significantly undervalued at just 119p, which puts them on less than a third of the rating of its shipping sector peer Clarkson, which is currently on a price earnings ratio of 21.5 against 6.6x for Braemar. The brokers are going for 205p.

My very short-term objective of 150p stands very firm and easily achievable.

Profile 05.12.19 @ 185p set an end-2020 Target Price of 250p.

Profile 20.05.20 @ 99p set a Target Price of 150p within months.

Crimson Tide (LON:TIDE) – massive contract win will help

For this group’s market-leading mpro5 mobile app platform the company has just secured a £1.6m contract with one of its major retail group clients.

The app will be used in the shops to manage reactive and predictive maintenance reporting, such as temperature readings, and allowing jobs and flows scheduled automatically from its sensor data.

We should be getting a better update on current trading at the 30 June AGM.

In the meantime, the shares are now trading at 2.85p, and are almost double their end-March low of 1.58p.

Profile 08.10.19 @ 2.8p set an end-2020 Target Price of 5p.

Inland Homes (LON:INL) – sizeable plot disposal will help the finances

One of my favourite brownfield development groups yesterday announced that it has agreed to sell 94 plots at Wilton Park in Beaconsfield.

The buyer is Bewley Homes, which is paying a premium over the recent valuation, with some two-thirds in cash in September and the balance up to a year later.

Those funds will certainly boost Nish Malde’s cash coffers.

Malde is the group’s finance director and a major shareholder along with Stephen Wicks, the CEO.

The shares reacted well to the disposal news, rising 7% to 54p.

Profile 13.08.19 @ 68p set an end-2020 Target Price of 110p.

Profile 24.10.19 @ 77p set and end-2020 Target Price of 110p.

RA International (LON:RAI) – the share buybacks have started

As I was corrected by a reader last week, this services group passed the ability to buy up to 5m of the group’s shares at its AGM last year.

Well, that programme actually got underway last Friday when it acquired 100,000 shares at 41p each.

Those shares are cheap and this buyback programme will actually give them a firm price underbelly.

At last night’s closing 41.7p they offer some good upside potential. They touched 53p a year ago and could well be heading slowly back up there again.

Profile 26.03.20 @ 37p set an end-2020 Target Price of 50p.

DX (Group) (LON:DX.) – sassy share purchase by a Non-Exec

Following its end-May Trading Update and then its recent news that the delivery solutions group had launched a newly expanded centre in Ipswich, I was interested to note a director’s share purchase a week ago.

Paul Goodson, a Non-Executive, jacked up his holdings by 8.3% through the purchase of 200,000 shares at 12.4p each. That takes his holding up to 2.7m.

There will be a pre-close trading statement from the company in a month’s time.

Just nine months ago the shares were up to 14.25p, they closed last night at only 12p, but to my mind they are destined to rise again soon.

Profile 20.02.20 @ 12.5p set an end-2020 Target Price of 15p.

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