Small-cap update: featuring Totally and Sureserve

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Small-cap update: featuring Totally and Sureserve

Mark Watson-Mitchell updates his readers on the latest goings-on at Totally and Sureserve, both of which have Bob Holt OBE as chairman. 

Totally (LON:TLY) – The advance continues

This morning this provider of a range of healthcare services across the UK and Ireland, announced a number of contract extensions, including 12-month extensions for services provided at Urgent Treatment Centres in Greater London, along with funding to pilot additional clinical services in the North East of England.

Those extensions and the pilot are worth a total of some £7.5m.

That news was well received in the market, with the shares being chased up 1.8p to 19.8p.

Wendy Lawrence, CEO, said: “Totally is proud to be standing shoulder to shoulder with the NHS, helping it to manage fluctuating demands for patient-facing services. The company looks forward to updating the market on its first quarter activity as part of a trading update planned for release in September.”

It does look as though the market has at long last realised what a terrific job this little group is doing in supplying such needed services to the NHS and other health centre operators.

I look forward to that trading update in September. Analysts are already going for a major uplift this year to end-March 2021, aiming for a £35m increase in revenue to £141m, with pre-tax profits turning around from the £3.41m loss of last year to a pre-tax gain of £4.4m, worth nearly 2p per share in earnings.

Going forward, £155m of sales in the 2022 year could push profits up to £5.7m, if not more, and that would be worth nearly 2.6p per share in earnings.

At just 19.8p these shares look like a no-brainer. I see 25p at least in due course.

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

Sureserve (LON:SUR) – Another Holt winner?

Bob Holt OBE, the mover behind the growth of the Mears Group, is chairman of both Totally and this compliance and energy services group.

Like Totally, it has had its ups and downs prior to Holt getting hold of the reins.

Its current year-end is the end of September and following on from the very positive interims announced at the end of May, it would be fair to assume that the trend is continuing.

Despite the Covid-19 hassles it was showing ongoing growth, helped on by the base of its business in the gas, water and electrical service sectors falling under the ‘key worker’ status.

Obviously dependent upon government and local authority spending, Sureserve must be enjoying a much stronger second half year, considering just how needy its customers are for its various services, whether they are in lockdown or not.

I have followed Bob for over two decades and his attention to detail and management style has never changed. He never over-eggs his business. In fact, he always under-promises and then looks to over-deliver in performance.

Way back in mid-January, pre-Covid-19 days, I profiled the company at 36p before its interim results. They touched 51.5p subsequently, before falling back to just 31p at the end of March, since when they have recovered to rest at around the current 43p level.

For the year to end-September I am looking for the group to hold its revenues fairly steady at £205m or thereabouts, while its pre-tax profits could see a major uplift from £5.3m to over £8m, worth 4p plus in earnings per share.

And that excellent performance would have been set against a tough Covid-19 trading background.

For the coming year some £225m of revenues and £10m pre-tax would see about 5.2p in earnings per share.

With its shares at 43p, that would put them out at around 10 times current-year and just over 8 times prospective earnings. That would be too low a rating for such sales and profits potential.

(Profile 14.01.20 @ 36p set a Target Price of 50p*)

(*Denotes that Target Prices have already been achieved.)


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