Small-cap round-up: featuring Character, Worsley Investors, REACT and more…

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Small-cap round-up: featuring Character, Worsley Investors, REACT 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…

The Character Group (LON:CCT) – certainly not toying around

Yesterday’s half yearly financial report from this designer, developer and international distributor of toys, games and giftware pleased the market.

For the interim period to end-February revenue was up 44% at £74.5m. Underlying pre-tax profits were up from £2.5m to £6.1m, with earnings leaping from 9.58p to 22.93p per share. Even the dividend was well up, tripled to 6p at interim stage. Cash more than doubled to £34.9m (£16.8m).

That certainly was a strong set of figures, well deserving the 100p a share price rise to close at 572p last night after the news had been digested. That was a 21.19% rise yesterday alone.

I have known this group for over two decades and particularly rate its Joint Managing Director and Group Finance Director, Kiran Shah.

A firm hold.

(Profile 14.12.20 @ 395p set a Target Price of 500p*)

Worsley Investors (LON:WINV) – reserve your seats

A week ago this Guernsey-based investment company announced that it has now received the full rental due from 1 January to 30 April 2021 in respect of the cinema lease to UCI Italia S.p.A..

The group’s Italian multiplex cinema complex, which is located in Curno, on the outskirts of Bergamo, has been closed for six months.

The fact that UCI has actually paid up its rents due for the period is impressive, especially in these Covid-19 hit times.

It certainly will not harm the impression of the tenant for any potential purchaser of the €9.6m valued property when the estate agent’s books open up again.

I continue to rate this little company’s shares as an undervalued bargain at the current 29.5p, some 39% below estimated net asset value.

(Profile 19.03.21 @ 25.5p set a Target Price of 32p)

REACT Group (LON:REAT) – cleaning up

This leading specialist cleaning, hygiene and decontamination company has recently been awarded a new twelve-month facilities management contract with a national highways sector client. 

Then earlier this week it was awarded a new three-year contract to supply a full range of reactive cleaning and decontamination services to yet another FM client.

It will be very interesting to hear just what boss Shaun Doak has to say next Thursday when the company announces its latest trading update.

The company’s shares, now at 3.1p, have performed well to date and have that 5p look about them, especially if the good news keeps on rolling in.

(Profile 28.01.21 @ 1.5p set a Target Price of 2.5p*)

Smiths News (LON:SNWS) – a good delivery coming?

With a 55% market share this group is the UK’s largest newspaper and magazine wholesaling business. 

On Wednesday of next week, the company should declare its interim results for the 26-week period to 27 February this year. We already know that both profit and cash generation were in line with market expectations.

In fact, CEO Jonathan Bunting told shareholders early last month that he was looking forward to providing a further update on the group’s financial performance and wider progress in these interims.

Since last November the group’s shares have moved up well from 25p to a recent peak of 41p. Now at 38.85p I do believe that they offer some good upside potential, with 50p being an aim within the next six months.

So let us see what the company has to say next week.

(Profile 24.07.20 @ 20.25p set a Target Price of 27p*)

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

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

Wed 05TClarke (CTO)AGM
 Johnson Service Grp (JSG)AGM
 MPAC Grp (MPAC)AGM
 Smiths News (SNWS)Ints
 Ten Entertainment (TEG)AGM
Thu 06Costain Grp (COST)AGM
 Eleco (ELCO)AGM
 Morgan Sindall Grp (MGNS)T/U
 REACT Grp (REAT)T/U
 Vitec Grp (VTC)AGM
 Superdry (SDRY)T/U
Fri 7Numis Corp (NUM)Ints
Tue 11Angling DirectFins
 Capita (CPI)AGM
 Macfarlane GrpAGM
 The Gym Grp (GYM)AGM
Wed 12Bigblu Broadband (BBB)AGM
 Centaur Media (CAU)AGM
 Vertu Motors (VTU)Fins
Fri 14Futura Medical (FUM)Fins


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