Small-cap round up featuring Kape Technologies, SThree and MP Evans

6 mins. to read
Small-cap round up featuring Kape Technologies, SThree and MP Evans

Kape Technologies (LON:KAPE) – is it Superman’s rocket?

Wow – this group is taking off like a rocket.

Controlled by Teddy Sagi, the Israeli online gambling tycoon, the company is moving at quite a pace.

Earlier this week it announced a stunning £675m acquisition, in a cash and shares deal. of one of its rivals, the virtual private network operator ExpressVPN.

That doubles its subscriber base to 6m and takes the enlarged group into the premium end of its market.

For the full year to end December 2022, revenues are estimated to more than treble to $617.8m ($198.9m est.), while pre-tax profits should rise even faster from $63.4m est. to $151m, earnings increasing from 24.4c 40.6c per share.

That clearly shows the potential that the deal offers the growing group.

Even though it now falls out of my Small Cap remit (being above £500m market capitalisation) I suggest that holders should stay for the ride – it is sure to be exciting.

The shares are now trading at an All Time High of 400p.

(Profile 21.12.20 @ 172p set a Target Price of 215p*)

SThree (LON:STEM) – going higher still

Science, technology, engineering and mathematics are the three sectors that this specialist staffing business focusses upon in its business.

On Monday it declared a Q3 Trading Update covering June to end August. It appears that the group experienced very strong growth in its markets in Germany, the US and in the Netherlands.

Accordingly, the group is now expecting to show profits far higher than anticipated.

Sanjay Vidyarthi, an analyst at Liberum Capital, increased his estimates for the current year to end November – now looking for revenues to rise from £1.21bn to £1.35bn, with profits doubling from £28.3m to £60m, earnings leaping from 12.15p to 30.42p per share, double covering a 10.14p dividend against 5p last time.

He has lifted his price objective to 650p per share, which compares with last night’s closing of 576p.

That is now 22% up on my profile price of less than two months ago.

It also gives my own aim a ‘comfort cushion’ as the share price improves further.

(Profile 23.07.21 @ 473p set a Target Price of 560p*)

M.P. Evans Group (LON:MPE) – sustaining a further price rise to come

This Indonesian producer of sustainable palm oil, in its first six months to end June, raised its revenues from $75.89m to $128m while its pre-tax profits were up over 900% at $40.09m ($4.42m), with earnings rising from 5.7p to 38.3p per share.

That was a very impressive set of half-timers from this group.

The full year to end December could see revenues rise to $252.8m ($174.5m), while profits could much more than double from $28.8m to $77m, with earnings increasing from 38.1c to 102c per share, enabling dividends of 42c (29.7c).

Broker to the company, finnCap, has a 1000p price objective on the shares, which touched 810p in response to the results before closing last night at 780p.

They look like a very strong hold on that performance.

(Profile 07.04.20 @ 540p set a Target Price of 700p*)

Springfield Properties (LON:SPR) – 200p is a good price at which to aim

The year to end May, for this leading Scottish housebuilding group, reported a 51% improvement in sales to £216.7m and an impressive 81.4% increase in pre-tax profits at £18.5m. Earnings came out at 14.41p, up 73%, and the dividend was raised 187.5% to 5.75p per share.

This is a cracking set of figures that reflected the group’s strong build and sales activity throughout the year, with high demand having been experienced across the business resulting in significant growth in revenue in private and affordable housing.

Analyst Alastair Stewart at Progressive Equity Research sees the group’s revenues rising gradually over the next three years to £283.1m by end May 2024, and profits rising to £25.2m in the same period. That would be worth 18.7p per share in earnings.

Such quality growth will see the shares continue to rise in price, with 200p being an easy objective.

They closed last night at 151p, offering a very good upside potential.

(Profile 05.03.19 @ 114p with no Target Price having been set)

Henry Boot (LON:BOOT) – a ‘classy’ company with massive but steady upside

A first half increase in revenues at this property to construction group, from £108.7m to £129m, reflected rising demand in its three key markets.

A 220.8% improvement in pre-tax profits to £23.1m, helped the company’s net asset value to grow by 8.9% to 256p a share.

It has so much on hand currently that it makes me realise that its shares will soon reflect its potential.

Now at 287p, they are so close to their recent 295p High.

Hold tight.

(Profile 24.05.21 @ 276p set a Target Price of 340p)

Anexo Group (LON:ANX) – it would be good if this one comes right

The interims to end June showed revenues, for this credit hire and legal services provider, were up 31.9% at £48.3m, while pre-tax profits were 40.5% better at £8.9m, generating interim earnings of 6.1p (4.5p) per share.

Analyst Andrew Simms at Arden Partners, states that the figures were stronger than expected. He sees £97m full year sales and £21.5m profits, worth 14.8p in earnings and very capably covering a 2p dividend. Simms rates the shares as a ‘buy’ fixing a 280p price objective.

The group certainly has growth in its strategy and its shares at 146p are better on the results.

Hold tight.

(Profile 23.04.20 @ 134p set a Target Price of 175p)

The Mission Group (LON:TMG) – this company has higher hopes

On Wednesday of next week (22) this agency group will be declaring its interim results to end June.

It is now apparent that trading in the first half of 2021 was ahead of expectations. Despite severe lockdown restrictions in its trading markets, the group continued to see a marked recovery in both revenue and profitability.

Revenues for the period to end June of £31.6m (£ 29.1m) with an operating profit of £2.0m (£1.8m loss). Expect a second half weighting in profitability to be on track with full year expectations.

Estimates are for £71.1m (£61.5m) sales, adjusted pre-tax profits up from £1.2m to £7.1m and earnings up from 1.2p to 6p per share, amply covering a 2.3p (nil) dividend.

The group’s brokers Shore Capital have a value estimate on the shares of 157p.

In May this year the group’s shares were up to 91.75p but they have since eased back to 79p, perhaps a bullish Interim Statement will help to create some much-needed upward impetus.

A firm hold.

(Profile 04.02.20 @ 88.5p set a Target Price of 125p)

1Spatial (LON:SPA) – knowing where the holes are

I expect this location master data management software solutions group to declare its interim results on Wednesday 29 September.

Perhaps then we may get an update on all of the group’s contracts in the current year to date.

The latest, announced on Monday, is a deal to support Atkins to deliver a National Underground Asset Register competitive tender for the UK’s Geospatial Commission.

The NUAR is a new digital map which will revolutionise construction and development across the country, mapping the UK’s underground pipes and cables.

Over 4m holes are dug in the UK each year, many in the wrong place. The economic cost of accidental utility damage is around £2.4bn each year. Unforeseen ground conditions are a major obstacle to all construction and housing projects, especially on previously developed land.

The new digital map of underground pipes and cables will help improve efficiencies in construction and development, reduce disruption and improve workers’ safety.

This looks absolutely ideal work for 1Spatial, whose global clients include national mapping and land management agencies, utility companies, transportation organisations, government and defence departments.

Analyst Ciaran Donnelly at Liberum Capital has a price objective of 70p for the group’s shares. His estimates for the full year to end December show a £1.2m increase in sales to £24.6m, while pre-tax profits could ease slightly from £1.3m to £0.9m.

He does, however, see sales and profits improving in 2022 and 2023.

The shares are steady around the 41p level, but I have no worries about them hitting my predicted level.

(Profile 12.05.21 @ 41.5p set a Target Price of 52.5p)

(Asterisks * denote that Target Prices have been achieved subsequent to profile publication)

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