Small Cap Round-Up: Information, Cybersecurity and Salt Solutions

Journeo (LON:JNEO) – Big Network Rail Contract Boosts Share Price

This transport information systems group saw its shares pick up substantially upon news of a £1.2m contract for the group from Network Rail.

The deal covers the provision of its portal software and services, together with a two-year licencing of its software.

The benefits from this contract will accrue next year and in 2024.

It further boosts the £11m capitalised group’s order book, enhancing its revenue visibility.

CEO Russ Singleton stated that:

“We are delighted to be providing Network Rail, ScotRail and British Transport Police with a fleet-wide deployment of our high security safety analytics software and data management applications within the SaaS based Journeo Portal.

Developing and licencing software is a strategic objective of Journeo which is complementary to the historic hardware-based installations undertaken.

This bonds Journeo even more closely with its growing list of customers, whilst delivering substantially higher returns for our shareholders.”

The group’s brokers Cenkos Securities have the shares as a Buy. Their analyst Andrew Renton is estimating that the trading year to end January 2023 will see revenues rise to £21.6m (£18.0m), while its adjusted pre-tax profits could increase to £1.8m (£1.2m), basic reported earnings are estimated at 17.1p (10.4p) per share.

It would be reasonable to expect good estimates for the coming year becoming evident after the January Trading Update is published.

The shares at 118.5p are looking really quite appealing and capable of a big upward push on further good news. They were up to a year’s High of 154p and could soon be there again as we go into 2023.

(Profile 07.04.21 @ 95.5p set a Target Price of 120p*)

Northcoders Group (LON:CODE) – Driving Into 2023 With Rolls Royce

Look out for this £24m software coding training group to see its turnover almost double next year to £9.5m, while its adjusted pre-tax profits could rise in parallel to £1.2m, lifting its earnings up to 16.2p per share – estimates by WH Ireland.

Over the last year the Manchester-based group has been winning new business – the latest being a contract with Rolls Royce to run a developer incubator programme.

Having raised £2.1m of fresh development cash by way of a Placing @ 300p a share in late November, the group is looking confidently into 2023.

The group’s shares, which touched 375p in September this year, are currently trading at around the 310p level.

They could so easily rise on further interest to 350p.

(Profile 28.01.22 @ 296p set a Target Price of 370p*)

Corero Network Security (LON:CNS) – Sowing Seeds of Interest

The question I would like to ask … is Caraway Group Inc, registered in Obarrio in Panama, any relation to the Washington-based consultancy services group?

I am interested because the Panamanian company has recently upped its stake from 7.12% to 9.05% in the equity of this £52m cyber security software group.

It has now amassed over the last few months a holding of over 45m shares.

The holder of 100% of Caraway’s shares is Narex International Trust, of which I can trace little, but have noted that the LSE notification of the stake increase was completed in Lugano, Switzerland.

I really do enjoy sussing out such situations – so if anyone has any information then please contact me.

The group is currently estimated by Canaccord Genuity to be enduring a negative year to the end of this month, with estimates of $1.4m EBIT loss against a previous $1.6m positive, on the back of increased sales of $22.1m ($20.9m).

The broker is positive for the coming year looking for $28.3m sales and a positive $0.5m EBIT.

It has a 20p price objective out on the Corero shares, which at 9.35p are currently close to their 2022 low bottom.

A ‘penny stock punt’ for 2023?

(Profile 14.04.20 @ 4.2p set a Target Price of 6.5p*)

Tekcapital (LON:TEK) – Very Strong Upside Expected Next Year

In a very tasty move Tekcapital has announced that it will be floating off MicroSalt in early 2023.

The company,which is the intellectual property investment group that commercialises university-developed projects, has appointed Manchester-based Zeus Capital to handle the float.

The group has built up a very interesting portfolio of discoveries from across its global network. Tekcapital’s technology transfer services help universities and other such organisations to evaluate and commercially develop the projects through acquiring, investing and enhancing the discoveries.

Under the overall strategic guidance of Dr Clifford Gross, who built up the service and created a portfolio of valuable products aimed at improving people’s lives, Tekcapital has gradually assembled a very interesting portfolio of investments ranging from innovative eyewear, remote vehicle monitoring, to respiratory medical devices.

With a 97% stake in the company, MicroSalt is one such portfolio constituent. It has developed, mechanically transformed and manufactured a low-sodium salt solution that delivers a real salt flavour, through a patented technology producing salt crystals, one hundred times smaller than table salt, that delivers a powerful saltiness in the mouth while consuming 50% less sodium.

The company declares that with 31% of all adults globally suffering from high blood pressure and cardiovascular disease, and with efforts mounting from governments across the globe to lower sodium, MicroSalt offers a truly revolutionary worldwide solution for both manufactures and consumers.

MicroSalt CEO Rick Guiney stated that:

“We are very pleased to appoint Zeus as our Nominated Adviser and Broker, to assist MicroSalt in effectuating an AIM listing and to provide capital market guidance for our global growth strategy,”

The news of an early float of the award-winning sodium reduction company will help to boost still further the value of Tekcapital’s development and investment portfolio.

With its shares at around 17.25p the group is capitalised at £31m.

Considering the very significant value of the various company stakes in its estate, Tekcapital is looking undervalued, its shares, at a deep discount to net asset value, are capable of a strong upside in 2023.

(Profile 12.09.22 @ 24.75p set a Target Price of 32p)

(Asterisks * denote that Target Price have been achieved since Profile publication)