Small-cap round-up: featuring CMC Markets, DX Group, K3 Capital and more…

6 mins. to read
Small-cap round-up: featuring CMC Markets, DX Group, K3 Capital 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…

CMC Markets (LON:CMCX) – More than trebled in price over the last year

Last week’s interim results to end-September showed clearly that this global online financial trading group is just ‘gunning’ it away currently.

So too are its shares.

The 369% pre-tax profits increase to a record £141.1m was very impressive, on the back of a 126% leap in operating income to £230.9m.

The group is confident that net operating income for the year will be in excess of £370m.

Especially as it continues to invest in technology and people in both its existing CFD and stockbroking businesses.

The group’s shares hit 437.5p earlier this week but end the week after some understandable profit-taking, now at around 386.5p.

Brokers Shore Capital have a ‘buy’ rating on the group’s shares.

(Profile 17.10.19 @ 120p set a Target Price of 180p*)

DX (Group) (LON:DX.) – Strong AGM statement 

Yesterday’s AGM statement from this delivery solutions group was extremely positive. 

Following on from its mid-September update, which declared that the first months of this current year had been ahead of 2019, it has seen that trend continue without interruption and despite the second lockdown. 

Its expansion continues as it invests further in supporting the group’s growth.

The group states that it remains in a strong financial position, it has high levels of liquidity and also has significant headroom within its invoice discounting facility.

The interim trading update should be published in early February, followed by the results in early March.

Even though they have well and truly exceeded my price objective over the last nine months, I still see the group’s shares, now 24.7p, going a great deal higher.

Investors should await price dips.

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

K3 Capital Group (LON:K3C) – Cracking one-month performance

Last year this business and company sales specialist group announced its interim trading update on 16 December. It could well be earlier this year, in order to give us the info on the trading to end-November. 

I rate this company and its shares highly – they have already outperformed my best expectations and quickly so. 

They close the week at 215p after hitting 223p earlier. A cracking performance in just over a month. 

(Profile 21.10.20 @ 147.5p set a Target Price of 200p*)

Forterra (LON:FORT) – Ready to build on recent gains

Is now the time to have another run up with the shares of this UK brick maker?

On Tuesday of this week the group published a trading update for the first four months of this current year to end-October.

Trading in September and October was well ahead of management expectations and that continued into this month too.

It appears that the group has seen no let-up in the demand for its products, with housebuilders encouraged to continue both the building and selling of homes, and builders’ merchants remaining open to support tradesmen who are permitted to work on customers’ properties. 

Production at the group’s facilities is now running at pre-pandemic levels.

These pieces of bullish news are topped off by the company now upping market EBITDA expectations from £30m to at least £34m. 

Estimates now suggest that revenue for the year to end-December will be down £100m at £280m, while pre-tax profits will have been slashed some 80% to just £13m, worth 5p per share in earnings. Not unexpected estimates in the light of the massive Covid-19 hassles that persisted for the group.

Jumping forward to next year, suggestions are that sales will rise to about £315m, with pre-tax profits almost trebling to £36m, worth about 14p per share in earnings.

Brokers Peel Hunt rate the shares as a ‘buy’, Jefferies say ‘hold’, while Deutsche Bank have raised their ‘buy’ objective from 234p to 259p after the update.

We had a very good run after I profiled the shares last year, hitting my price aim.

Since then they have reacted to the virus and bottomed out at 144p before edging back up to the current 233p. 

I have a gut feeling that we could well be in for another upwards price run for this £540m capitalised group.

(Profile 30.05.19 @ 286p set a Target Price of 350p*)

Wincanton (LON:WIN) – Really trucking now

Despite this third-party logistics group reporting its end-September interims with a 2.4% fall in revenues to £578.7m and a 27.1% fall in underlying pre-tax profits at £19.1m, its shares are in the ascendant.

The half-timers were published on Guy Fawkes Day and obviously displayed some fireworks of potential.

CEO James Wroath stated with the interims that, “I am greatly encouraged by the new contracts we have secured so far this year to become a key partner for some of Britain’s biggest brands and public bodies, and we continue to see a healthy pipeline of new opportunities coming to market. Performance has been resilient in the first half, we expect the good momentum with which we end the period to continue and consequently expect results for current year to be materially ahead of market expectations.”

Analysts at Liberum suggest that the group can continue to win even more business, giving hope of higher growth and margin potential. They say the shares are a ‘buy’ and are looking for 350p.

The shares were just 201p at this time last month. Last night they closed at 252.5p after hitting 257p during the day.

(Profile 07.05.19 @ 247p set a Target Price of 350p)

And finally… ‘On The Move’

MPAC Group (LON:MPAC) – In the middle of January, this global packaging and automation solutions specialist should announce its trading update for the year to end-December. And what a year it has been – Covid-19, Chinese production, lockdowns and then a mega-acquisition of a mirror-like US operator. The statement just has to be bullish. Well, that is what the share price, now at 427p, is telling us. (19.12.19 @ 182p TP 235p*)

Ten Entertainment Group (LON:TEG) – Well, these shares have performed exceptionally well in just under two months. Now up 50% on my early October profile price, they close the week encouraged by the easing of lockdown measures trading at 200.5p. (02.10.20 @ 135p TP 170p*)

Portmeirion Group (LON:PMP) – AB Traction of Sweden has increased its stake recently. Its finals trading update is due mid-January. This world-famous pottery group has seen its shares nudge higher of late, closing the week at 495p. (28.08.20 @ 376p TP 480p*)

Robinson (LON:RBN) – Perhaps a bullish finals trading update is just a few days away. Is that why this Chesterfield-based custom manufacturer of plastic and paperboard packaging sees its shares now trading at 160p, after hitting 169p a few days ago. This has been a wonderful performer during the lockdown periods. (02.04.20 @ 55.5p TP 80p*)

International Personal Finance (LON:IPF) – this group specialises in providing unsecured consumer credit to around 1.7m customers across 10 markets. It also operates the world’s largest home credit business and its IPF Digital subsidiary is a leading fintech businessSince its 18 November trading update, the group’s shares have fallen back from their recent 98p high to just 91.25p. At that level they could well act like a magnet pulling them over that magic 100p level, and soon methinks. (24.08.20 @ 64p TP 80p*)

(*denotes that Target Prices have been attained subsequent to Profile)

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