Small cap round up featuring Keller Group, Van Elle, Restore/Marlowe, Audioboom and Augean

7 mins. to read
Small cap round up featuring Keller Group, Van Elle, Restore/Marlowe, Audioboom and Augean

Keller Group (LON:KLR) – earth to space

Its business is below the ground while its shares are heading well above the surface.

The world’s largest geotechnical specialist contractor published its interims to 27 June on Tuesday. They showed that, despite a 5% fall in revenue at £984.1m, it made a 41% improvement in its pre-tax profits at £29.2m. Earnings were up 104% at 28.2p, with a 12.6p per share dividend at the halfway stage.

It appears that the £700m group’s global order book was up 11% at £1.2bn. The full year is expected to be materially ahead of previous estimates.

The group’s shares are now at 964p and looking perky. Hold tight.

(Profile 10.08.20 @ 643.5p set a Target Price of 750p*)

Van Elle Holdings (LON:VANL) – finals in a fortnight

At the other end of the scale to Keller, this group must not be dismissed due to its significantly smaller size.

Van Elle is the UK’s largest specialist geotechnical engineering contractor, split into three main divisions – general piling, specialist piling and ground engineering.

Its business is aimed at the residential and housing, infrastructure and regional construction markets. The £47m group will be announcing its final results for the year to end April on Tuesday 17 August.

I have to say that I feel confident that this group will be positive about its recovery progress from the Covid-19 dumps.

The March and April months showed some strong performances, so let us hope that the Statement with the results will signify even more upside for the current year and further ahead.

Having been up to 51.5p in late April, the shares have subsequently eased back to the current 46p level.

I see them rising to 55p, then going a lot higher still.

(Profile 29.03.21 @ 37.5p set a Target Price of 47p*)

Restore (LON:RST) – rejections against the bid approach from Marlowe (LON:MRL) with a possible offer at 530p a share

Over 33.3% of the shareholders in the document management and relocation group are totally against the muted offer from Marlowe. They appear to consider the value being suggested is far off the true worth to the Restore equity holders.

The Board of the company is against it too, having rejected two approaches. Will it now succumb to ‘round the table’ discussions to prise out an agreeable offer? I think that there is no rush for Restore to do so just yet.

Marlowe has some proving of its corporate strategy and just what could be created by a merger of the two groups.

Meanwhile, I would expect the Restore shares to trade in a narrow 485p to 520p price band, until Marlowe backs out or ups its ante.

It is well worth noting that two of Marlowe’s senior management were part of the Restore crew, so one assumes that they know exactly what it is worth inside the Marlowe framework.

(RST Profile 16.09.20 @ 335p set a Target Price of 420p*)

(MRL Profile 30.01.20 @ 468p set a Target Price of 550p*)

Audioboom Group (LON:BOOM) – smoke and mirrors?

Elsewhere on the bid scene, the battle for this podcasting group continues.

As far as I can see the company making the bid approach has next to nothing to offer. What is more, I hear little whispers that a number of participants are involved on both sides of the contest.

There is even a suggestion that it is a smoke and mirrors job but, of course, I could not comment.

Holders could well be better off just selling their shares, now around 940p, in the market and reinvesting elsewhere as quickly as possible.

(Profile 09.07.19 @ 210p set no Target Price)

Augean (LON:AUG) – another bid on its way?

I have to say that I will be disappointed if another party does not come in and make an offer for this waste management group.

I know that the Morgan Stanley Infrastructure company has achieved a recommendation from Augean for its 280p a share cash bid, together with the bonus of a 20p Loan Note of value if the outstanding tax claims are successful.

However, I understand that Gresham House Strategic, a sizeable holder, is not too happy. Investment manager Laurence Hulse has stated that:

Given the attraction of the operating model, the level of wider private equity bid activity and the valuation Augean trades on, it would not be surprising to see other interest.”

The Augean Board have well under 5% of its 105m shares, while investment professionals including Harwood Capital, Canaccord Genuity, Chelverton, Gresham House, Close Brothers, Schroder, Artemis and Unicorn control some 65% of the equity.

Remember that the market chased the shares up to 315p on the initial pre-bid buzz – so is that what they are worth? I like Augean and rate its shares higher than the MSI offer. Trading at around the 285p level the group’s shares may still see a lot more action.

(Profile 31.10.19 @ 158.5p set a Target Price of 200p*)

(Profile 10.06.20 @ 185p set a Target Price of 235p*)

Belvoir (LON:BLV) – going well in this market

The residential property market really has seen a big pick-up in the last year.

Again, that fact is witnessed by the latest Pre-Close Trading Update from this leading UK property franchise and financial services group.

Ahead of its interims being declared, on Monday 6 September, the group on Tuesday of this week was in very confident mood.

First half trading has been very strong and well ahead of its management expectations at the start of 2021.

Analyst Guy Hewett at brokers finnCap is estimating current year revenues to end December rising from £21.7m to £27.2m, while adjusted pre-tax profits are expected to improve from £7.5m to £9.3m, with earnings jumping from 16.7p to 20.6p per share, almost triple covering a 7.4p dividend.

The group’s shares, which recently peaked at 313.5p close the week at 298.5p.

My view is that they will be going even higher soon, while finnCap has raised its aim from 334p to 359p. Still some action left in the property market and in Belvoir’s shares.

(Profile 09.01.20 @ 141p set a Target Price of 175p*)

Henry Boot Group (LON:BOOT) – a quality operation

The Sheffield-based property investment, development, land promotion and construction companies group recently stated its trading had been strong in its first half year. Its interim results will be declared on Monday 13 September.

On Monday its new joint company, with tech campus developer Factory, called HBD X Factory, announced that it had been selected as the preferred bidder to work on a new development next to the GCHQ at Cheltenham. This could be the start of an important new activity for the group.

Then on Tuesday it declared the acquisition of a 20-acre industrial development site in Rainham, London, operating in partnership with Barings. The £100m redevelopment project will be 80% Barings and 20% HBD.

I like the feel of this group and its shares, currently 273p after having been up to 290p recently, could have some forward momentum before the interims.

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

Share stake changes of note …..

Tremor International (LON:TRMR) – US float and then reduce

I see that Schroders have lightened considerably their holding in the global advertising media software platform business from 14.953% to just 10.679%. The shares were as high as 870p a few weeks ago but are now around 782p.

Luceco (LON:LUCE) – is it a clear sign?

JP Morgan Asset Management has ‘top-sliced’ its holdings in the lighting and wiring products group’s equity – from 5.229% to just 4.969%. The recent market update was for profits ahead of expectations. After sitting at 451p a month or so ago, the shares are now at 400p.

(Profile 15.06.20 @ 96.1p set a Target Price of 125p*)

Totally (LON:TLY) – an emergency procedure

It was good to note that the Board and Senior Management at this healthcare services provider have been topping up their holdings. It was a good signal even though it may not have been by too many shares with five of them taking out a total of 168,500 shares at 41p each. That was straight after the group announced a 3-year £4m a year contract for its Urgent Care Division. Its AGM is on Monday 6 September and its shares are now just 38.5p – cheap.

(Profile12.03.20 @ 12p set a Target Price of 18p*)

(Profile 25.06.21 @ 38.5p set a Target Price of 50p)

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

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

Sun 8Lamprell (LAM)AGM
Tue 10S&U Stores (SUS)T/U

Zotefoams (ZTF)Ints
Wed 11Block Energy (BLOE)AGM

RPS Group (RPS)Ints
Thu 12Tribal Group (TRB)Ints

Vitec Group (VTC)
Tue 17Eqtec(EQT)AGM

Gattaca (GATC)T/U

Van Elle Holdings (VANL)Fins
Thu 19Capital Limited (CAPD)Ints

Rank Group (RNK)Fins

Tremor International (TRMR)Ints

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