Small Cap Round-Up featuring MPAC Group, Strix Group, Manolete Partners, Totally and others

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…

The 24.03.20 CV19 Market Recovery Portfolio + 40.94

This portfolio of 10 stocks continues to show an excellent performance over just six lockdown weeks. The FTSE100 Index is up 8.99% in the same time frame.

MPAC Group (LON:MPAC) –  Further opportunities for growth

This company is a global leader in high speed packaging and automation solutions. It has a strong balance sheet, is well financed, remains debt free and has access to a £10m secured committed revolving facility which is yet to be drawn down.

The AGM on Wednesday stated that cash generation in the first three months of the year was in line with management expectations prior to the pandemic.  The group has modelled and stress tested its liquidity under extreme assumptions as a result of the spread of COVID-19 and it remains well positioned to meet its liquidity requirements beyond 2020 from existing resources.

The shares closed the trading week at 255p and capable of climbing further.

Profile 07.01.20 @ 182p set an end-2020 Target Price of 235p *.

Strix Group (LON:KETL) – a long time to wait before it switches off

The global leader in the design, manufacture and supply of kettle safety controls and other complementary water temperature management components, is steaming away.

Following the strong financial performance in 2019, and having reviewed its overall financial position, current prospects and balance sheet requirements, the company has reconfirmed its recommendation of a final dividend of 5.1p per share.  That will take the full year dividend up to 7.7p per share.

The market likes that confidence and has seen the shares close the week at around 185p.

Profile 31.12.19 @ 196p set an end-2020 Target Price of 250p.

Manolete Partners (LON:MANO) – strengthening still further thanks to the virus

Steven Cooklin, boss of Manolete Partners, told shareholders earlier this week that the market leading UK insolvency litigation funding company had adapted well to the unprecedented challenges presented by the current crisis.

He suggested that this crisis is likely to lead to widespread global economic disruption and that he expects that there will be an unavoidable knock-on effect for the UK economy.

That will lead to an increase in case referrals in the months to come. The group “has the balance sheet to support the important work of the Turnaround Restructuring and Insolvency Professionals who are helping many companies navigate these challenges.”

The shares end the trading week at around the 485p level, they are sure to rise still further this year.

Profile 16.04.20 @ 39p set an end-2020 Target Price of 55p.

Totally (LON:TLY) – very sensible cost saving move by the Chairman

This leading provider of a range of healthcare services across the UK and Ireland, announces that it has written to shareholders with a registered holding of 100 ordinary shares or fewer informing them that the Chairman of Totally, Bob Holt, has expressed his willingness to acquire those certificated holdings.

This very sensible move would significantly reduce the number of registered shareholders and would achieve cost savings for the Company as it incurs printing and posting costs whenever documents are sent to shareholders.

Not only is it a good move for the company but also for Holt, because this company is doing well and is ready and capable of further expansion.

The shares close the week at around 18.75p, now strongly above my goal.

Profile 12.03.20 @ 12p set an end-2020 Target Price of 18p.

Tekmar Group (LON: TGP) – operating on all of its sites

In its Trading Update issued on Tuesday this group, which provides the supply and installation support of sub-sea protection equipment to the global offshore energy markets, stated that its results for the year to end March 2020 will be much as expected.

Revenue will be some 40% up on the previous year. Its order book is looking strong at £10m, which is up 39%. It has good net cash at £2.1m plus added liquidity from a Barclays COBIL loan of £3m.

That should help it get through any Covid-19 hassles. It has been operating across all of its sites, while its office staff are home-working. Only 8% of its staff have been furloughed. Tight financial management will also be helping the group get through the near future.

The shares at 110p are looking attractive at these lower levels.

Profile 28.01.20 @ 168p set an end-2020 Target Price of 205p.

Hotel Chocolat (LON:HOTC) – a bit of a soft centre

The chocolate retailer saw a surge in online sales prior to Easter but, unfortunately, that failed to fully offset the closing of its shops in the face of Covid-19.

Co-founder and chief executive of the company, Angus Thirlwell, said that plans are in progress to reopen its stores as and when appropriate.

Closing its stores had a material impact on trading and the company has subsequently actioned the management of its costs and cash flow.

It had also strengthened its finances having secured a new £35m loan with Lloyds Bank.

However, its shares, at 310p are looking a bit gooey and may well continue to do so until all its operations are fully functional again.

Profile 21.03.19 @ 340p set an end-2020 Target Price of 402p *.

And Finally …..

Johnson Service Group (LON:JSG) – now just have to wait and see

The leading UK textile services provider has been hit by Covid-19 across its markets.

It is sorting out its financial covers and seeking Government funding support.

I have no doubt about the longer-term prospects for this group but until offices, hotels, restaurants and bars etc are back in full function it will prove to be a ‘waiting game’ for investors.

The shares close the week at around 126p.

Profile 24.12.19 @ 196p set an end-2020 Target Price of 250p.

(* denotes that Target Prices have been attained)