Some small-cap quickies: WIN, TRI, FNX, LUCE and i3E

Wincanton (LON:WIN) – confidently setting a new Target Price

This group is one of the UK’s leading logistics businesses. It supplies services to masses of the country’s top-name companies.

Those services include storage, handling and distribution, e-fulfilment, ‘dark stores’, two-person home delivery, fleet and transport management, and network optimisation.

The group employs over 20,000 people, operating from over 200 sites and utilising 3,500 vehicles – as we drive anywhere in the country, we will have seen its lorries and probably not known it.

The company is active across a number of sectors – building materials, fuels, food and consumer goods, defence, e-commerce, the public sector and also major infrastructure.

Its clients are numerous, but includes some of the top British companies, like ASDA, British Sugar, Lucozade, ScrewFix, Waitrose, Weetabix, BAE Systems, Primark, Wickes, RoperRhodes, Dobbies Garden Centres and Aggregate Industries.

In my view this really is a ‘quality company’ – its shares are totally under-rated, closing last night at around the 412p level, having risen 9p on the day after it announced its Q4 Trading Update.

Analyst Gerald Khoo at Liberum Capital has rated the shares as a ‘buy’ with a 520p price objective.

Ahead of the finals to end March being announced on 20 May, he is estimating that the group will have seen revenues up from £1.22bn to £1.41bn for the last year, with adjusted pre-tax profits of £56.5m (£47.2m), driving 38.2p (32.0p) in earnings and paying 12.0p (10.3p) in dividends per share.

For the coming year he sees almost £1.5bn revenues, £62.6m profits, 41.3p earnings and a 13.9p dividend per share.

That makes the shares at the current price still offering useful, capital appreciation over the next year or so and making my new Target Price of 500p a very easy goal.

(Profile 07.05.19 @ 247p set a Target Price of 350p*)

Trifast (LON:TRI) – I set a new Target Price

Ahead of publishing its annual results to end March on 21 June, this supplier of high-quality industrial fastenings, declared a pre-close Trading Update yesterday.

The group enjoyed a continuation into Q4 of its strong trading. It has been passing on its own higher costs to its customers and it is looking for high growth to come from a number of exciting opportunities.

Analyst Colin Smith at Arden Partners is rating the group’s shares as a ’buy’ with a price objective of 190p.

For the last year to end March he estimates that the group saw sales of £216.5m (£188.2m) and adjusted pre-tax profits of £13.3m (£11.0m), generating 7.8p (6.6p) earnings and covering a 1.8p (1.6p) dividend per share.

The coming year could see £232.1m revenues, £16.8m profits, 9.4p earnings and a 2.3p per share dividend.

The group is likely to see both organic and acquired growth this coming year.

Its shares now at 100p, look to me to have some worthwhile upside.

I now set a new Target Price of 125p.

(Profile 26.05.20 @ 113.5p set a Target Price of 175p)

Fonix Mobile (LON:FNX) – I set a new Target Price

Simon Beresford, Director of Fundraising and Marketing of the Disasters Emergency Committee, stated that:

“We’re thankful to Fonix for enabling mobile donations so quickly and to the generous UK public whose donations will go on to make such a difference. As humanitarian needs continue to grow, the money raised will help to provide vital support to families caught up in this devastating conflict.”

Fonix has been the mobile donation partner for the Disasters Emergency Committee (DEC) Ukraine Humanitarian Appeal.

Over £6.8m has been made in mobile donations since the beginning of March.

This is a wonderful example of how Fonix can work. It provides mobile payments and messaging services for clients across media, telecoms, entertainment, enterprise and commerce.

When donors or consumers make payments, they are charged to their mobile phone bill. This service is primarily used for ticketing, digital services, memberships and also for charity and other donations.

Over the last few years this £150m capitalised group has been gradually building up its revenues and its profitability.

From £31.1m revenue in 2019, £40.1m in 2020, last year to end June it saw £47.7m total.

Its adjusted pre-tax profits, in the same time period, have grown from £5.2m, to £7.3m then £8.3m last year.

Analysts Michael Hill and Andrew Darley at brokers finnCap are estimatin, g that this year, to the end of next month, the group will report £53m revenues and £9.6m profits, earnings of 7.9p (6.9p), covering a 6.0p per share dividend (5.2p).

The analysts suggest that the group’s shares have a lot further to climb. They see current year figures of £58.4m sales, £10.6m profits, 8.8p earnings and 6.6p dividend per share. Their price objective is 230p.

Last night the group’s shares, which last May peaked at 179.95p and fell to a Ukraine conflict low of 118p, were looking much stronger at 15op.

I now set a new Target Price of 180p.

(Profile 01.02.21 @ 136p set a Target Price of 170p*)

Luceco (LON:LUCE) – poor Q1 sees shares collapse

this LED lights and wiring products maker has disappointed investors this week. The company reported an update on its first quarter’s trading to end March.

It has suffered from its customers last year ‘over-ordering’ stock when supply shortages were predicted.

That has meant that Q1 sales were 3% lower, however the hope is that rising prices will help to offset the fall going forward.

This market guidance brought about reduced full-year expectations.

Analyst Christian Hinderaker at Liberum Capital still rates the group’s shares as a ‘buy’ but he dropped his price objective markedly from 400p to just 260p a share.

His estimates for the year to end December are for sales of £225m (£228m) and pre-tax profits down from £37.4m to only £25.2m, easing earnings from 19.8p to 12.9p, and slicing the 8.1p dividend per share last year to around 5.2p.

The group’s shares have collapsed from 194p before the Q1 Update to 131.50p by last night.

At around this level the shares, which touched 513p last August, could well attract ‘recovery buyers’ hoping for a bounce next year.

(Profile 15.06.20 @ 96.1p set a Target Price of 125p*)

And finally ….

i3 Energy (LON:i3E) – excellent stake dealing

I tip my hat to Stifel Nicolaus Europe and Tennyson Securities, who yesterday handled the Secondary Placing of 60m shares @ 27p each on behalf of Bybrook Capital and Cairn Capital.

The shares of this UK and Canadian oil and gas operator had been a gently firmer market in the last seven days, up from 27p to 31.5p, ahead of the Placing.

Professionally handled the deal leaves the vendors with 21% of the i3 Energy issued capital.

The group will be holding its AGM at WH Ireland’s St Martin’s Lane offices on 30 June.

We have had a good run to date in the exploration and development group’s shares, since my Profile on the company late last year, following which they had almost trebled in price before Wednesday’s dealings.

However, its rise is nowhere near over, as far as I see it, because the Placing of such bulk was handled very easily, with others anticipating further good news and price advancement.

The shares closed last night at 28.25p down 3.25p on the news.

A strong hold at this price.

(Profile 13.12.2021 @ 11p set a Target Price of 14p*)

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