Small-cap round-up: featuring Braemar Shipping, Rosslyn Data, Manolete 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 (LON:BMS) – strategic push in its shipbroking side produces good H1 results

A very encouraging set of interim figures from this marine services group. They showed resilience in the first half to end-August.

It appears that the shipbroking side has helped to drive a stronger performance from the group.

Revenues were just 2% lower at £56.3m, while the underlying pre-tax profits were 63% better at £5.7m. That pushed earnings some 47% better to 16.3p per share at the halfway stage.

Net debt at the end of H1 was £19.3m against £18.8m previously.

The growth of this group centres around the future of its shipbroking division, which is expanding globally, with the current head of shipbroking taking on the group Chief Executive role as from 1 January.

The shares, which were just 123p a week ago, peaked at 155p on Wednesday’s results announcement before easing back on profit-taking to 136p. They close the week at 142p and look capable of sustaining a further rise back up to the 170p level of early October, and even higher still.

Brokers to the company, finnCap, have a 205p price objective on the shares, stating that they expect the valuation difference between Braemar and Clarkson, its much bigger peer, to gradually close.

(Profile 05.12.19 @185p set a Target Price of 250p)

(Profile 20.05.20 @ 99p set a Target Price of 150p*)

Rosslyn Data Technologies (LON:RDT) – more good contract news this week

Yet another big contract win was announced by this data technology company.

The three-year order is from a major multinational grocery and general merchandise retailer based in the UK and with a significant presence in the Republic of Ireland.

The shares were down to just 5p a week ago but touched 6.3p on Thursday and close the week at that level.

The group’s interims are due in mid-January, but we should see a H1 trading update in the next month.

My price objective remains very firm.

(Profile 12.08.20 @ 5.75p set a Target Price of 7.5p)

Renewi (LON:RWI) – cutting costs in H1 created savings and lower debt levels

Last Tuesday saw this leading international waste-to-product business reveal its interim results to end-September.

They showed a 3% dip in revenues to €821.4m and a pre-tax profit of €4.4m against a loss of €17.8m previously.

It seems that strong action on the group’s costs has been impactive, resulting in cash savings, a reduction in net debt and leverage.

The management is staying sensibly cautious with regard to its second-half prospects; however, the full year could well show a performance well ahead of previous market guidance.

The shares hit almost 27p on the results before easing back to rest at around the 24.3p level. I am convinced that they will advance a lot further in the near future.

(Profile 09.10.20 @ 24p set a Target Price of 35p)

Manolete Partners (LON:MANO) – the cases keep increasing

This insolvency litigation financing company showed tremendous strength in its first half to end-September.

Revenues were up a stunning 153% to £19m, while its pre-tax profits were 49% better at £6.4m, pushing earnings up 49% to 11.8p per share. That significantly covered the 134% hike in interim dividend to 1.17p per share.

The number of new cases continues to advance, some 69% higher at 110, which was very close to the 141 for the whole of last year.

That momentum has carried over into this half year so that bodes well for the finals, but those are some way off yet.

In the meantime, the group’s shares at 304p are still less than half of last year’s 617p peak. Considering the ‘short selling’ furore around competitor Burford Capital last year that peak may remain a distant goal.

For the time being I will be quite happy seeing the shares back up trading the 400p/500p price range, which still offers investors a significant upside.

(Profile 12.02.19 @ 230p set a Target Price of 300p*)

(Profile 26.02.19 @ 330p, subsequently peaked at 617p)

Brickability (LON:BRCK) – a ‘v’ trend will advance the shares further in price

Yesterday’s announcement of the end-September interims showed that a poor April and May led into much better trading in the following four months, and profitably so.

Revenues in the first half were down £22.6m at £75.3m, while pre-tax profits eased from £6.5m to £5.4m.

This leading construction materials distributor has seen that ‘v’ shaped recovery trend continue in the last month or so.

That will do no harm to the group’s share price, which is at 49p at time of writing, with its brokers Cenkos Securities calling the shares a ‘buy’ and looking for £13.2m pre-tax profits to end-March 2021, worth 4.6p in earnings and covering a 2p dividend per share.

For the prospective year they go for £212m revenues kicking in £17.8m of profits, worth 6.2p in earnings and modest dividend of 2.1p per share.

I am confident of my price objective being achieved.

(Profile 16.04.20 @ 39p set a Target Price of 55p)

Premier Foods (LON:PFD) – debt falling and higher sales and profits

Rising and falling like a piece of dough, the shares of this food brands group were all over the place on Monday after it declared its half-year results to 26 September.

They showed a 15% jump in sales to £421.5m and an adjusted pre-tax profit of £47.7m, up 50.2%. Earnings rose 49.6% to 4.5p at interim stage. Net debt fell £87.9m to £382.8m.

The benefit from the 49% stake in Hovis for a net £37.3m was only completed last week so does not show up in these results.

The shares touched 109.8p at one point after the announcement, more than topping my price objective, but later fell back to a low point of 90p. They close the week at around the 95p level.

I would like to think that during Lockdown 2 they will climb back over the 100p barrier.

(Profile 29.06.20 @ 67.5p set a Target Price of 101p*)

(* denotes that Target Prices have been subsequently achieved)