Small cap round up: featuring Rank, Chemring, Finsbury Food and more…

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Small cap round up: featuring Rank, Chemring, Finsbury Food and more…
Master Investor Magazine

Master Investor Magazine Issue 58

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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…

Rank Group (LON:RNK) – top rankin’ profits

Well, this gaming venues and multi-channel operator is performing well.

It appears that trading in both its Grosvenor and International venues, as well as in its Digital business, has been very positive.

Also, its transformation strategy is working well.

The group is now expecting to boost its end-June 2020 year’s results above current market expectations. The previous estimates were for underlying operating profit in the £93m to £103m range. But now the company gives its guidance out at between £105m to £115m.

We will see exactly how the first half to end-December progressed when the company reports its results on Thursday 30 January.

The shares reacted well to Thursday’s trading update, closing 13p better at 280p. They end the week at around the 284p level, with Peel Hunt rating them as a ’buy’ up to 320p.

Profile 13.06.19 @ 157p set an early TP of 200p and an end-2020 Target Price of 220p.

Chemring Group (LON:CHG) – Barclays say go ‘overweight’

The group’s AGM is on 4 March, when we should get a useful pointer just to how well the company is trading in the current year to end-October 2020. So, a first-half update would be helpful.

Last year, on a 13% increase in sales to £335.2m, the company increased its pre-tax profits 58% to £39.4m, with earnings up an even more impressive 62% to 11.2p per share.

It is apparent that Barclays Capital are bullish enough to jack up their recommendation to ‘overweight’ and increase their target from 175p to 290p.

The shares end the week at 269.5p.

Profile 20.06.19 @ 177p set an end-2020 Target Price of 300p.

Frontier Developments (LON:FDEV) – top pick

Berenberg Capital has made this games developer one of its Top Picks for 2020, suggesting that the shares are a ‘buy’ up to 1,600p.

The shares closed the week strongly better at 1,330p.

Profile 01.10.19 @ 1000p set an end-2020 Target Price of 1500p.

Codemasters Group (LON:CDM) – another top pick

This is another games developer selected as one of Berenberg Capital’s Top Picks for 2020.

The shares, which are rated as a ‘buy’ up to 380p, are closing the week at 269p and looking strong.

My outer price range price at 350p looks very achievable.

Profile 25.06.19 @ 225p set an early 278p TP and an end-2020 Target Price of 350p.

The Gym Group (LON:GYM) – another bumper year

A cracking update from this low-cost gym group on Friday morning.

Revenue was up 23.6% to £153.1m in what was an excellent year.

Final figures are due on 19 March.

The shares close the week at 307p, after hitting 325p.

Profile 11.04.19 @ 220p set an end-2020 Target Price of 300p.

Augean (LON:AUG) – get stuck in

There is real money in muck! The hazardous waste management group was very positive in its December year-end trading update announced last Monday.

Profits will be ‘at least’ in line with recently upgraded market expectations.

After falling back to 206p at one stage, the shares close the week at around 222.5p level.

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Master Investor Magazine Issue 58

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These look to be going a lot higher yet.

Profile 31.10.19 @ 158.5p set an end-2020 Target Price of 200p.

Finsbury Food Group (LON:FIF) – sales and profits advance

Thursdays trading update revealed that the first half to 28 December 2019 saw sales up 4.7% at £159.4m, driven strongly by the 5.8% advance by the bakery side, while overseas sales were up 3.5%.

On Monday 24 February the UK’s leading speciality bakery manufacturer of cake, bread and morning goods should declare its full-year figures in line with market expectations.

My profile estimates were for £325m sales and £15.8m profits, with 10p in earnings and a 3.8p dividend per share.

So, the fall back in the shares on the update news to 96p gives investors a further buying opportunity.

Profile 12.12.19 @ 84.5p set an end-2020 Target Price of 110p.

Helical (LON:HLCL) – fully let at last

I was pleased to see that this property development and investment group has now fully let the Tower office and retail site in the Bower, Old Street.

The 3.12-acre site covers 333,500 sq. ft. of space and has been let at an average £73.55 per sq. ft. That really is very impressive.

No doubt JP Morgan Cazenove feel similar as they have increased their target for the shares from 450p to 475p.

They close the week at 459p.

Profile 11.06.19 @ 389p set an end-2020 Target Price range of 489p to 500p.

MPAC Group (LON:MPAC) – twice as good

Last Monday witnessed a good rise in the shares of this food processing equipment group, touching 297p at best.

The recent second profits upgrade has been very well received in the market, with analysts currently upgrading their 2019 and 2020 profit estimates.

The results should be declared in early March.

The shares close the week at around the 291p level.

Profile 19.12.19 @ 182p set an end-2020 Target Price of 235p.

CMC Markets (LON:CMCX) – looking cheap ahead of update

The third-quarter trading update for this leading online financial trading business will be declared next Thursday.

At the half-way stage, net operating income was up 45% at £102m while pre-tax profits were 318% better at £30.1m, and earnings up 252% at 9.5p per share.

The shares close the week at 155p and still look cheap.

Profile 17.10.19 @ 120p set an end-2020 Target Price of 180p.

SimplyBiz Group (LON:SBIZ) – trading update next week

On Tuesday 28 January I expect to see this fintech and support services provider for the retail financial services marketplace announce its trading update for its full year to end-December 2019.

The shares close the week at 234p, after touching 238p on Tuesday. I am not worried about my Target Prices.

Profile 04.04.19 @208.5p set an early TP of 250p and an end-2020 Target Price of 300p.

And finally….

STV Group (LON:STVG) – Crystal Amber finally almost out!

Earlier this week, it was announced that the Guernsey-based Crystal Amber Fund had reduced its stake in the media group from 4.99% to just 1.35%.

Considering that, over the last year, it has been reducing its holding from over 19%, the fact that the shares have ended the week at 452p, around a two-year high, is impressive.

This one seems poised to go higher.

Profile 25.04.19 @ 370p with no Target Price set.

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