Small Cap round up – Pots and Scans

Totally (LON:TLY) – looking fit, well and very healthy

This provider of frontline healthcare services, corporate fitness and wellbeing services progressed very well in the year to end March 2022.

The results announced on Tuesday of this week showed revenues up 12% to £127.4m, helping to generate a thirteen-fold improvement in its pre-tax profits to £1.30m (£0.10m).

That revenue uplift was driven mostly by the group’s insourcing services.

The group showed good cash generation, ending the period with £15.3m net cash (£14.8m) which was after having spent some £7.4m on acquisitions during the year.

Totally supported 2.5m patients, handling 1.4m NHS111 calls, with 800,000 patients being seen in urgent treatment centres, while some 180,000 patients being supported out of hours.

It handled 55,000 community dermatology appointments, 30,000 physiotherapy appointments, as well as some 28,000 appointments helping patients get access to elective procedures more quickly through insourcing and outsourcing.

Those figures show quite clearly what Totally does in its support services.

Analyst Ian Jermin, at the group’s NOMAD and joint broker Allenby Capital, is looking for the group to push ahead its revenues in the current year to end March 2023, with £140.0m his prediction.

His estimate for the adjusted pre-tax profits for the group this year is for £5.7m (£3.7m), with earnings rising over 50% to 3.00p (1.92p) and an unchanged 1.0p per share dividend.

After this year’s record results, he forecasts further advances in this current year to end March 2023, then in 2024 and 2025.

Allenby compute a ‘fair value’ for the group’s shares of 75p, compared to the current 42.25p.

The shares have been up to 49.19p within the last year and I see them rising well above that level within the next year or so.

Hold very tight.

(Profile 12.03.20 @ 12p set a Target Price of 18p*)

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

AdEPT Technology Group (LON:ADT) – significantly undervalued

This group, which is one of the UK’s providers of managed services for IT, unified communications, connectivity and voice solutions, bounced back in its year to end March 2022.

On £68.1m (£57.9m) of revenues its adjusted pre-tax profits were climbing back to £7.9m (£6.4m), with earnings recovering to 27.5p (22.3p), while reinstating its dividend at 1.0p per share.

The group is looking to accelerate its organic growth, while also lowering its net debt.

It will also seek to boost its current 74% ARR.

For this year Singer Capital sees £73.3m of revenues and profits of £8.1m, worth 28.5p per share in earnings and easily covering a 3p dividend per share.

Singer has a 350p price objective on the company’s shares.

At the current 142p the group’s shares look to be significantly undervalued.

(Profile 22.02.21 @ 260p set a Target Price of 325p*)

FRP Advisory Group (LON:FRP) – current economic environment is highly conducive to its business

On Friday of next week, this business advisory group will be announcing its results for the year to end April 2022.

And looking at the way the group’s shares have been moving ahead recently, it seems that investors have been chasing the shares in anticipation of good news.

With the way the economy appears to be kicking a number of the country’s larger companies this group could well prove to be a major beneficiary of the current uncertainties.

It offers amongst its multitude of services, debt advisory, corporate finance, mergers and acquisitions, restructuring, forensics and even pensions advisory.

The market is looking for revenues for the last trading year to have risen 21% to £95.2m, upon which the group could have made some £23.3m (£21.2m) of pre-tax profits, lifting earnings to 7.8p (7.1p) and dividends up to 4.3p (4.1p) per share.

For the current year analyst Peter Renton, at the group’s brokers Cenkos Securities, is perhaps being too cautious in looking for only £100.0m in revenues, £24.0m profits, 8.0p earnings and a 4.7p dividend per share.

He sees its net cash rising to £27.8m (£20.7m) by the March 2023 year end.

Even so he rates the group’s shares as a ‘Buy’ stating that the company has the appealing characteristic of being able to grow throughout economic cycles.

The shares at the current 157.5p are 5p below their recent 162p peak, I feel that the group is really catching market attention now and they remain a very good hold.

(Profile 15.02.21 @ 104p set a Target Price of 130p*)

MJ Gleeson (LON:GLE) – significant growth prospects and totally affordable at this price

Last Monday’s Trading Update for the year to end June 2022 by this housebuilding and construction group has prompted analysts to up their estimates for the current and the following years.

It appears that the company enjoyed a strong performance as it progressed through its last year, certainly enough to give the market guidance that their expectations will be beaten.

We will have to wait until Thursday 15 September to see the full picture for the last year.

What is more the company stated very clearly that it is confident in its future prospects.

Although significant material and labour cost increases were experienced across the sector, they were largely countered by stronger selling prices, while labour and materials shortages eased in the six months to end June.

The average selling price of its homes sold during the year increased by 14.7% to £167,300.

An interesting fact was that the time taken from plot release to reservation reduced significantly during the year to 34 days (49 days), reflecting the ongoing shortage of high-quality affordable homes available to young, first-time buyers.

The group’s portfolio at the year-end comprised some 71 sites, with the potential to deliver 20,241 plots, as well as 25 acres of commercial land.

On the Land side of the group, it has still been suffering planning delays, with the number of sites awaiting a planning decision increased to 16 sites with the potential to deliver 3,559 plots for housing development (15 sites and 3,020 plots awaiting a planning decision).

End-year cash balances showed out at £33.8m and no debt.

James Thomson, CEO, stated that:

“We have started the new financial year in a strong position. Notwithstanding the ongoing congestion in the planning system and the wider macro-economic environment, the Board believes that the scale of pent-up demand for low-cost homes will continue to drive significant growth into 2023 and beyond.”

Analysts James Tetley and Greg Poulton at joint broker Singer Capital Markets are looking for 2022 to come through with £379.6m (£288.6m) of sales and £53.0m (£41.7m) of adjusted pre-tax profits, worth 73.2p (58.1p) in earnings, enough to easily cover a dividend of 18.0p (15.0p) per share.

For the current year they see £428.4m sales, £57.0m profits, 74.8p earnings and a 21.00p dividend per share.

Singer rates the shares as a ‘Buy’ looking for 825p a share as its price objective.

The group’s other broker, Liberum Capital, also rates the shares as a ‘Buy’ but with an increased aim of 900p (835p).

The group’s shares look like a ‘stand-out’ bargain, now priced at only 510p, which is substantially below my earmarked price.

(Profile 11.04.22 @ 613p set a Target Price of 750p)

TClarke (LON:CTO) – record first half

This building services group has declared a great set of half-time figures to end June.

Revenues in H1 were £206.2m (£138.2m) while pre-tax profits were £5.5m (£1.9m), jacking interim earnings up to 10.24p (3.58p), with a 1.25p interim dividend (0.75p).

What looked very strong was the increase in its forward order book to a record £586m (£503m) as net cash increased to £7.2m (£2.0m).

The group is getting ever closer to breaking the £500m sales barrier, with £450m (£327.1m) being the full-year guided estimate.

Kevin Cammack, analyst at the group’s broker Cenkos Securities, rates the shares as a ‘Buy’, with a 185p ‘fair value’.

He is looking for the company to make £11.5m (£7.8m) in adjusted pre-tax profits, taking earnings up to 21.4p (15.0p) and lifting the dividend to 5.3p (4.8p) per share.

In my view, the shares at around the 157.5p level still offer significant upside.

(Profile 10.12.19 @ 120p set a Target Price of 165p*)

Renewi (LON:RWI) – certainly not rubbish

The first quarter to end June, for this international waste-to-product company, showed that it is trading in line with expectations.

This group is a ‘class act’ as far as I am concerned.

What is more, it is still not being properly valued by investors.

Analyst Colin Smith at Arden Partners has a price objective out on the shares of 950p, against the current price of 753p.

Smith has compared the group’s value against that take-out price being whispered for rival Biffa – which on the same terms would boost Renewi’s shares up to £15.0 each.

I remain totally convinced of the group’s prospects for both the short and long-term.

Hold very tight.

(Profile 09.10.20 @ 240p set a Target Price of 350p*)

(Profile 25.03.22 @ 684p set a Target Price of 850p)

Portmeirion Group (LON:PMP) – a new Target Price of 460p

The sales for the first half to end June, for this homewares group, will be at least £45m (£43.1m), some 5% ahead.

This company is another ‘class act’ that is well worth following.

Analyst Sahill Shan at Singer Capital Markets, the group’s joint broker, is looking for sales for the full year to rise to £110.2m (£106.0m) while adjusted pre-tax profits could move ahead strongly from £7.2m to £10.0m, lifting earnings up to 56.0p (38.7p) and easily covering a dividend of 18.66p (13.00p) per share.

With the group’s shares currently trading at 370p, down some 40p after yesterday’s results announcement, I am now putting them out with a new Target Price of 460p.

(Profile 28.08.20 @ 376p set a Target Price of 480p*)

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