Small-cap round-up featuring Medica Group, Lamprell, SDI Group, Fonix Mobile, and more

11 mins. to read
Small-cap round-up featuring Medica Group, Lamprell, SDI Group, Fonix Mobile, and more

Medica Group (LON:MGP) – new brokers set 200p price objective

I see that Gresham House Asset Management is still adding to its holding in the UK and Irish market leader in teleradiology services.

So, they will probably be pleased to have seen that the group has just announced a joint venture with Integral Diagnostics, the leading provider of medical imaging services across Australia and New Zealand.

The group will be declaring its finals to end December 2020 next Monday – we already know that the figures have been impacted by Covid-19 slowing services down.

However, I do understand that after instant success of the vaccines, hospitals are now beginning to see an ease up in their pandemic pressures, sufficient enough to gradually take on more non-virus procedures and testing. That will be good for Medica in 2021.

Hopefully a good outlook statement will help the shares to pick up further – they close the week a little higher, at 122.5p, following new broker Liberum Capital having just published an absolutely cracking 66-page research note on the company.

The brokers are looking for the shares to hit 200p.

(Profile 07.01.20 @ 155p set a Target Price of 215p)

RBG Holdings (LON:RBGP) – well done Nicola, almost there

I really have to take my hat off to young Nicola Foulston, the CEO of this legal services group.

Over the last few weeks, since the 28 January Trading Update, she and her team have been working the boards giving investor presentations. Then on Wednesday they capped it off with a Capital Markets Day, which went down very well.

Analyst James Bayliss at N+1 Singer, the group’s brokers, is estimating that the April announcement of the finals to end December last year, will show £25.5m of revenues and £5.4m adjusted pre-tax profits, worth 5.3p per share in earnings.

For this current year he goes for £28m of revenues and £7.7m of profits, with 7.3p of earnings. He considers that the group’s shares deserve to trade at least in line with its peers, which would create an intrinsic value of 120p a share.

They closed last night at 91.5p, edging ever closer to my price objective of three weeks ago.

(Profile 05.02.21 @ 80p set a Target Price of 100p)

Lamprell (LON:LAM) – up 29% in one month and still cheap

I was pleased to see that yet another of my profile featured stocks has performed to expectations.

This rig building group has just won a large contract from Saudi Aramco on its strategic Marjan Field in the Arabian Gulf, one of the largest oil and gas fields in the region.

Although the group, which is a leading provider of fabrication, engineering and contracting services to the offshore and onshore oil and gas and renewable energy industries, has not actually stated the size of the contract, probably because of client restrictions, it is believed to be in the $50m to $150m range.

The contract work consists of two offshore production deck modules and associated pipeline and subsea cables.

The group’s shares attained my price objective within one month – a 29% gain. They closed last night at 77.75p, after some light profit taking.

Hold tight because the group’s finals are due to be announced on 25 March.

(Profile 22.01.21 @ 67p set a Target Price of 85p*)

SDI Group (LON:SDI) – up 240% in four months

The recent price rise in the shares of this scientific digital imaging group has been very pleasing.

Just two weeks ago I sensed that there was more to come from this company.

Even more so as the strengthening price is set against BGF Investment Management slicing their holding from 9% to 6.4% in the last fortnight or so.

I have a great amount of time for the group’s Chairman, Ken Ford, especially as the company is keeping investors informed as to the group’s progress.

That Trading Update on 10 February was extremely positive, as too is my continued view of this group’s shares, now up 240% on my Profile price of four months ago.

(Profile 28.10.20 @ 76p set a Target Price of 95p*)

Fonix Mobile (LON:FNX) – up 25% in 26 days

This mobile payments and messaging group announced its interims to end December last Monday.

They were excellent, showing sales up 25% at £24.6m, with EBITDA up 27% at £4.6m, while pre-tax profits came out at £2.7m (£2.8m).

The group, which has no debt, is this year estimated to be increasing its sales to £45m (£40m) and then up to £50m next year to end June 2022.

Adjusted pre-tax profits of £8.2m (£7.3m) for this year and then £9.1m for next year.

Analysts Michael Hill and Andrew Darley at finnCap, the company’s brokers, are setting their price objective at 200p.

The shares, after hitting my own price objective set 26 days ago, closed at 162.5p. A great deal more to come.

(Profile 01.02.2021 @ 136p set a Target Price of 170p*)

Marlowe (LON:MRL) – set to double sales in three years

This property compliance, health and safety, fire safety and security, water treatment and air quality services group has performed very well in the last year since I profiled the company. And that has been despite the Covid-19 impact upon the group.

Analyst Peter Renton at the company’s brokers Cenkos Securities reckons that the shares are a ‘buy’.

His estimates for current year profitability to end March look for revenues up from £185m to £206m, with adjusted pre-tax profits rising to £15.8m (£13.2m), worth 22.7p in earnings per share.

For the coming year he sees £250m of sales and £24.5m of profits, worth 31.5p in earnings.

Recently the group has held a Capital Markets Day at which it displayed its plans to grow its sales to £500m over the next three years, while increasing its operating margins from 15% to 20%.

Brilliant stuff – and that backs up Renton’s recommendation.

The shares are trading handsomely at present, after peaking at 720p, they rest at around the 683p level. A strong hold.

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

K3 Capital (LON:K3C) – inexpensive growth stock

This multi-disciplinary professional services firm provides advisory services to small and medium sized enterprises – but I best know it for its Knightsbridge business sales operation.

The interims to end November 2020 were announced a week ago and the group subsequently held a Capital Markets Day.

Add to that bulking up of investor interest following the updated price objective set by analyst Nik Lysiuk at its brokers finnCap – he is now going for 323p. It really is looking strong.

His estimates for the year to end May suggest a massive increase in revenues to £36.8, (£15m), then looking for £47.4m next year and up to £58.1m for the year to end May 2023. The respective profits for those years are £10.1m (£6.4m), £13.5m and then £17.6m.

After having peaked at 288p earlier this month the shares are holding steady at the higher levels, currently around 262.5p, which certainly does not feel expensive to me considering Lysiuk’s growth estimates.

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

PCI-PAL (LON:PCIP) – a growing ARR

Admittedly I profiled this ‘software as a service’ solutions company a month or so after it had almost doubled in price, but I still hope that it is primed ready to show a lot more upside.

The group’s shares were down trading in the 40p to 50p range for the best part of last year. The rise from 40p at the end of December up to the 76p level, at which I featured the company earlier this month, should perhaps have put me off my researching further.

However, I do love annual recurring revenues (as I have bored regular readers about so many times previously) and that is just what this cloud-based payment solutions business is pushing forwards upon.

It has a number of major contracts in the pipeline, with ARR as a feature. With very contained costs any growth through such contracts will see a big drop to the bottom line and current losses will soon be replaced by increasing profitability.

The group is declaring its end December interim results on Monday 8 March and then holding an Investor Meet presentation on Thursday 11 March.

There is still a big upward scope for this group’s shares and my price objective remains very firm.

(Profile 11.02.21 @ 76p set a Target Price of 95p)

MPAC Group (LON:MPAC) – up 300% but not for chasing just yet

Early last month this packaging and automation solutions company announced its Trading Update that suggested that its 2020 adjusted profits would be ahead of expectations.

Paul Hill at Equity Development, who has been absolutely ‘on the button’ with this stock, reckons that the group entered 2021 in excellent shape.

The expanding equipment group’s CEO Tony Steels is confident of a positive outlook for 2021 and so too am I because I just love the whole story about this company and I rate it highly. We have had a very good run with the shares over what has proved to be an absolutely ghastly trading year for so many companies.

Next Monday the company will be announcing its final results. We shall then see what Steels has to say on the group’s ‘robust performance’ in 2020 and just what could be in store this year for this now very international packaging sector player.

The shares, in anticipation of bullish comment, close the week at around 555p. However much I like this company, I would not charge into them at this current price, certainly not until a lot more is known.

(Profile 19.12.19 @ 182p set a Target Price of 235p*)

Angling Direct (LON:ANG) – well hooked sales growth online

Well, it seems that nothing deters the enthusiasm of this country’s anglers.
Announcing a very impressive Trading Update last Wednesday, Andy Torrance, the CEO, stated that he was “pleased with the performance that we have delivered through FY21, with good progress made on all fronts, both operationally and strategically, and look forward to reopening our stores in April”.

On 11 May he will be issuing the finals to end January this year, showing sales up 27% at £67.6m. The strong growth came through from its online sales which were up a very impressive 40% at £35.3m.

Analyst Matthew McEachran at N+1 Singer is looking for £2.3m of adjusted pre-tax profits (loss of £1.5m). The shares at 76p still have upside potential.

(Profile 29.10.19 @ 58p set a Target Price of 100p)

Surface Transforms (LON:SCE) – starting to build up

Analyst Robin Byde, at Zeus Capital, the company’s broker and NOMAD, is very positive about the prospects for this developing group as it starts to ramp up its various production projects.

He sees sales rising from £2m last year to £7.3m this year, £12.5m next year and £16.8m for 2023. In the same period frame, he sees a decrease of losses from £2.5m last year to just £1m loss this year and then up to £1.85m profit next year and £4.3m for 2023 – now that really is some growth.

The recent oversubscribed £20m fundraising will bolster the group’s balance sheet as it drives forward. A week ago the shares peaked at 81p but close the week nearer to 69p.

(Profile 19.09.19 @ 17p set a Target Price of 30p*)

(Profile 08.01.21 @ 50p set a Target Price of 65p*)

Begbies Traynor Group (LON:BEG) – is going bust good business

Companies going into or trading through difficulties, and even going out of business is the fodder for this group.

And it is going great guns currently – its Q3 Trading Update to end January, issued last Tuesday, reported a strong trading performance, with its management suggesting that the full year figures to end April this year should be up to, if not better than the expectation of around £10.5m adjusted pre-tax profits.

Boss Ric Traynor stated that the business recovery and financial advisory group was well positioned to deliver the anticipated material growth in earnings in the coming year.

The group’s shares are trading well too, having touched 117p a couple of weeks ago, they are ending the week at a steady 107.25p. Still more to go for.

(Profile 26.11.19 @ 85p set a Target Price of 110p*)

(Profile 21.04.20 @ 93p set a Target Price of 110p*)

Shearwater Group (LON:SWG) – set a new Target Price of 165p

A year ago I profiled this software and computer services company because I like what I could see and felt that its range of services would have natural demand. Its shares touched 298p, just 12p short of my price objective.

However, the effects of Covid-19 and the group’s fund raising to boost its finances, stymied its progress.

But in just over a month we should be getting the Pre-Close Trading Update for the year to end March – the figures will not be good. On the other hand the outlook statement could well prove positive for the coming year.

Admittedly it is a gamble until more is known, even so I am now putting out a new Target Price of 165p for this group’s shares, which are currently just 144p.

(Profile 14.04.20 @ 245p set a Target Price of 310p)

GetBusy (LON:GETB) – looking for comforting words

I am enjoying looking at the way the shares of this document management and task management software group are performing currently. They have been up to 108p this week and close the week at around the 106p level.

Next Wednesday will see the company announcing its finals to end December last. They should be quite positive showing a strong revenue growth for the last year, however it is this year’s outlook that interests me.

I feel that the group’s shares seem to have a strong wind pushing them higher, so let us hope that next week’s results and statement help to justify the price push.

(Profile 05.05.20 @ 60p set a Target Price of 75p*)

International Personal Finance (LON:IPF) – hold tight pre-figures

The world’s largest home credit business will be announcing its finals for 2020 next Wednesday. They should be good and more than help to bolster the shares at the current 83.5p. Hold tight in anticipation of further price growth, is my view.

(Profile 24.08.220 @ 64p set a Target Price of 80p*)

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