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…
CMC Markets (LON:CMCX) – really excellent results reflect attractions
A cracking set of figures from this now global online financial trading group.
Yesterday’s results showed a 93% advance in net operating income at £252m and pre-tax profits up a stunning 1,459% at £98.7m for the year to end-March 2020.
Earnings came in at 30.1p per share, up 1,405%. The dividend was raised 640% from 2.0p to 15.0p.
A staggering performance like this will be difficult to replicate and is certainly not expected in this current year, which has already started extremely well, due mainly to the massively increased trading activity that has been seen since the Covid-19 lockdown.
Further growth can be anticipated for this year to end-March 2021, but it obviously depends on frenetic spread betting gambling action by its UK and international clients.
This group has a certain resilience that makes its shares at 259p, up 59p on the news, continue to look good value.
Profile 17.10.19 @ 120p set an end-2020 Target Price of 180p*.
Angling Direct (LON:ANG) – savvy timing for additional funding
Ahead of this group, the UK’s largest specialist fishing tackle and equipment retailer, opening all its retail stores on Monday of next week, it has raised a quick £5.5m gross in fresh funds.
This is sensible and propitious timing just at the start of the coarse fishing season. It gives the group extra padding to cope with both Covid-19 hassles and the need to secure stock to meet demand.
Yesterday it placed 11m new shares @ 59p each, increasing the issued share capital by 14.5%. It saw Gresham House Asset Management increasing its stake by taking 3.51m, while BlackRock Investment Management took 1.93m of the placing shares.
That takes the number in issue up to 75.62m. The shares closed last night at 50.25p.
Profile 29.10.19 @ 58p set an end-2020 Target Price of 100p.
RA International (LON:RAI) – now even the company is buying its own shares
Last Monday this provider of services to remote locations in Africa and the Middle East declared its policy of buying back its own shares.
At its AGM on 24 June the company is seeking shareholder approval to buy back some 5m of its own shares in the second half of this year.
Not only will they be used for cancellation but also a number may be lined up for reissue as incentives for key employees and executives.
These shares, which touched 54.5p a year ago, are undervalued at the current 41.2p.
Profile 26.03.20 @ 37p set an end-2020 Target Price of 50p.
Braemar Shipping Services (LON:BMS) – finals next Tuesday
Tuesday of next week will see this shipping sector services provider declaring its results for the year to end-February 2020.
I am hoping to see a good set of figures for the last year together with some encouraging words about its prospects, even though it will have suffered some impact of Covid19 during the first quarter of the current year.
The shares, now at 123p, look cheap to me. My target for the shares leaves some good upside.
Profile 20.05.20 @ 99p set an end-2020 Target Price of 150p.
OnTheMarket (LON:OTMP) – a tricky year ensues
The effects of Covid-19 upon its business and on the majority of its shareholders must have been severe.
Mainly owned by estate agents across the country this company is now a very competitive UK residential property portal provider.
The group’s results for the year to end-January 2020 reported a 32% advance in revenue to £18.8m, while the pre-tax loss was £3m less at £11.5m.
Some 65% of the company’s shares are owned by its participating agents, who between them have over 9,000 branches.
Trading was going well until late March, before it then fell off a cliff.
With the easing of lockdown now underway the agencies have already seen a massive leap in the portal visits.
No financial guidance, understandably, has been given to brokers; however, Clive Beattie, the acting CEO, stated that the group “looks forward with confidence and a differentiated proposition that is highly valued by agents looking for sustainably fair pricing.”
After the results yesterday these shares are now just 56.5p.
Profile 24.09.19 @ 96.5p set an end-2020 Target Price of 175p.
Tremor International (LON:TRMR) – still buying its own stock
Ahead of next Thursday’s AGM I am encouraged to see that the global leader in video advertising technologies is still buying its shares as part of its $10m major share buy-back programme. The last bundle was 34,000 @ 170p each.
It has a mass of cash in its very strong balance sheet – some $76.9m. That covers eventualities of Covid-19, should there be any massive impact, while also covering its ongoing purchases of its own stock.
After falling away to a low of 85p in late March the shares have recovered convincingly to the current 160p.
I still see them easily breaking above my aimed levels and I do not rule out potential special dividends in due course.
Profile 16.01.20 @ 156p set an end-2020 Target Price of 235p.