Small-cap round up: featuring Alumasc, Angling Direct, DX (Group) and more…

5 mins. to read
Small-cap round up: featuring Alumasc, Angling Direct, DX (Group) 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 shares…

Alumasc (LON:ALU) – excellent trading update yesterday

This premium building products group informed its shareholders yesterday that the company’s trading for the ten months to the end of April has been extremely strong.

It had already reported at the halfway stage a very good advance, but it now appears that the trend has continued into the second half of the year.

David Buxton, analyst at the company’s brokers, has upped his full-year forecasts and is now looking for the year to end-June to show £90m of sales (£76m), with adjusted pre-tax profits almost trebling from £3.7m to £9.7m, while earnings leap from 8.2p to 21.7p and dividends more than treble from 2p to 7.5p per share.

Furthermore, he is looking for the coming year to do £97m revenue, £10.6m profits, 23.8p in earnings and 8p dividend.

Accordingly, Buxton has raised his firm’s price objective from 190p to 262p.

I think that he may well need to up those figures again before 2021 is over.

Responding to such positive news the group’s shares touched 237p, up 19p at one stage, before easing back to close the day at around the 219p level.

(Profile 13.02.20 @ 116p set a Target Price of 145p*)

(Profile 08.06.20 @ 80p set a Target Price of 105p*)

Angling Direct (LON:ANG) – broker suggests 125p for its shares

The fishing tackle and equipment retailer and online specialist saw sales for the year to end-January rise 27.1% to £67.6m, with adjusted profits showing through very well at £2.6m pre-tax compared against the previous loss of £1.5m.

There has been a laudable push by the group’s online sales side last year, up 39.9% at £35.3m, of which international sales were some 12.4% of that total.

The cash rich group is still looking to expand further into its growth territories of Austria, Germany, the Netherlands, France and Belgium.

Analyst Matthew McEachran at corporate brokers N+1 Singer forecasts that the current year to end-January 2022 will show sales of £72.5m then the next year will see £80m of sales.

He sees the sales mix changing slightly this year, estimating £2.5m profits, then going up to £2.8m in the 2022/2023 year.

He suggests that a ‘fair value basis’ would be 125p for the shares, now steady at 84p, but edging ever closer to my price aim.

(Profile 29.10.19 @ 58p set a Target Price of 100p)

DX (Group) (LON:DX.) – delivering very well

Yesterday morning this delivery solutions group put out a very positive trading update on just how the 53 weeks to 3 July 2021 are progressing.

Parcels, freight, secure courier and logistics services have all been in good demand during the lockdowns.

We had a strong pointer a few weeks ago when the company told the market that it had expanded its fleet with over 300 new vehicles, taking it up to 900 in total.

Trading has been a lot stronger than even the group’s management expected.

We should be getting a further update in mid-July. 

However, both of its corporate brokers, Liberum Capital and finnCap, are bullish about the group’s shares, with the former rating them as a ‘buy’ looking for 40p, and the latter raising its objective from 42p to 51p.

After touching 38p, up over 10% on the overnight 34.25p, the shares closed the day at 36p.

In my view they still have a lot further to climb.

(Profile 20.02.20 @ 12.5p set a Target Price of 15p*) 

Hotel Chocolat Group (LON:HOTC) – they are not cheap, but people still want them

I could be talking about the wonderful range of chocolates that this group retails, but instead I am referring to the group’s shares.

Mother’s Day and Easter are both magnificent selling opportunities for purveyors of superbly packaged and exquisitely presented chocolate delights.

And so it proved to be for this company this year. 

Last year it suffered physical retail outlets being closed due to Covid-19.

This year its revenues were 60% better compared to the 2020 period.

The year to end-June could well see sales up from £136m to £160m, with pre-tax profits rising from £2.4m to £5.8m, worth 3.9p per share in earnings (3p).

Estimates for the next year suggest £177m of sales and £13m profits, worth 8.7p EPS.

To end-June 2023 sales of £192m are possible, with profits running up to £18.9m, and 12.6p of earnings.

On the back of those estimates the group’s corporate broker Liberum rates the shares as a ‘buy’ looking for 600p, they are now 383p.

They touched 555p at their best in 2020 and could well be above that this year.

(Profile 21.03.19 @ 340p set a Target Price of 402p*)

Kromek Group (LON:KMK) – still hoping

As a worldwide supplier of detection technology focusing upon the medical, security screening and nuclear markets this company has a mass of potential.

It is expected to see its trading losses fall by 63% from £18.3m to end-April 2020 to just £6.7m debit for the 2020/2021 year.

Analyst Simon Strong at Cenkos Securities sees the shares, now 15.2p, as a ‘buy’ so for the time being I am going with his view, despite a poor performance since I profiled the company three months ago – obviously I was too early.

Even so, I’d stick with it.

(Profile 22.02.21 @ 19p set a Target Price of 23.5p)

(Asterisk* denotes that Target Prices have been achieved since profile publication)

Profile company results, meetings and updates expected within the next two weeks:

Mon 17Hollywood Bowl Grp (BOWL)Ints
Tue 18Forterra (FORT)AGM/TU
 Sureserve Grp (SUR)Ints
 Topps Tiles (TPT)Ints
 Watkin Jones (WJG)Ints
Wed 19Keller Grp (KLR)AGM
 Medica Grp (MGP)AGM
 Premier Foods (PFD)Fins
 Safestyle UK (SFE)AGM
Thu 20Kape Technologies (KAPE)AGM
 McColl’s Retail Grp (MCLS)AGM
 Wincanton (WIN)Fins
Fri 21Circassia Grp (CIR)AGM
Mon 24Randall & Quilter Inv Hldgs (RQIH)Fins
Tue 25Avon Rubber (AVON)Ints
 Epwin GrpAGM
 Harworth GrpAGM
 Helical (HLCL)Fins
 Marlowe (MRL)AGM
 Speedy Hire (SDY)Fins
Wed 26Anglo Pacific Grp (APF)AGM
 U & I Grp (UAI)Fins
 Zotefoams (ZTF)AGM
Fri 28Ebiquity (EBQ)AGM

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