The pawnbroker, the cyber king, a chocolatier, a brick and a horseman

4 mins. to read
The pawnbroker, the cyber king, a chocolatier, a brick and a horseman

The pawnbroker – Ramsdens Holdings (LON:RFX)

When reporting his group’s results for the year to end September last CEO Peter Kenyon, showing a 90% fall in profits from £5.7m to just £0.6m, he was pleased that his group had shown a resilient performance in the period.

The Middlesbrough-based group has some 155 stores across the UK and a growing online activity.
It is into four main businesses – pawnbroking loans, foreign currency exchange, selling and retailing second-hand and new jewellery, and finally buying of precious metals.

Despite last year’s Covid-hit poor showing a bounce-back could be in store for the current year.

Estimates suggest that sales revenues may well jump from £40.7m to £58.4m returning profits to around the £5m level, worth 12.4p in earnings (1.2p) and easily covering a dividend of 6.2p (1.2p).

The next year to end September 2023 could see even greater returns, with £7.5m of profits and 18.5p of earnings.
Shailesh Raikundia at Liberum Capital concludes that the group’s shares are a ‘buy’ and has upgraded his price objective from 166.5p to 196p.

The group’s shares are now at 169.5p – a very good recovery stock.

(Profile 07.11.19 @ 204p set a Target Price of 250p)

The cyber king – Kape Technologies (LON:KAPE)

Teddy has been out buying again.

Unikmind Holdings, based in the Isle of Man, controlled by Cypriot-Israeli billionaire entrepreneur Teddy Sagi, has added another 2m shares to his company’s controlling stake in the digital security software provider.

His holding is now up to 351.06m shares, some 54.3% of Kape’s equity.

That followed on from the group’s Trading Update for the 2021 year, which indicated $230.5m ($122.2m) of revenues and more than doubling adjusted pre-tax profits to around $66.4m ($30.8m), worth almost 26c a share in earnings.

This group is growing superbly and despite the build-up in its bank debt, around $420m, it will be able to rapidly reduce that figure within a couple of years cashflow.

Tuesday 22 March will be the date of this group’s final figures being published. The accompanying statement should be very positive.

Although the company’s market capitalisation is now well outside my viewing remit, I will continue to be a big fan.

Its shares, now 364p, are a portfolio stalwart in anticipation of excellent growth to come.

(Profile 21.12.20 @ 172p set a Target Price of 215p)

A chocolatier – Hotel Chocolat (LON:HOTC)

Getting frothy with it – this chocolatier group’s ‘Velvetiser’ in-home drinks system has proved a very strong performer in the first half year.

Angus Thirlwell, the group’s co-founder and CEO, stated that: “Trading throughout the period has been encouraging and the Board now expects trading to be marginally ahead of management’s expectations for the current financial year.”

Analyst Wayne Brown at Liberum Capital is looking for the current year to end June to report sales up from £165m to £212m, with pre-tax profits more than doubling from £10.1m to £21.0m and earnings of 11.8p (6.4p) per share.

Already for next year his figures show £288m of sales, £34.2m of profits and 18.2p of earnings.

Understandably he is rating the shares as a ‘buy’ looking for 620p.

Although expensively-rated the shares, now 526p, are a hold.

(Profile 21.03.19 @ 340p set a Target Price of 402p)

A brick – Brickability Group (LON:BRCK)

This ‘buy-to-build’ group is going great guns currently.

Ahead of the financial year ending on 31 March it has issued an Update stating that despite various hassles it is upping its guidance for the market covering this year.

It is going to be well ahead of expectations.

The UK’s leading brick factor is estimated to be on for £470m sales this year (£181.1m) and almost doubled pre-tax profits of £28.6m (£15.0m), increasing earnings from 5.6p to 8.3p per share and covering a 2.15p dividend (2p).

Kevin Cammack at Cenkos Securities rates the shares as a ‘buy’ citing a 131p ‘fair value’ per share.

I really admire this expanding group and its shares, now 99.5p, remain as an excellent hold.

(Profile 16.04.20 @ 39p set a Target Price of 55p)

And a horseman – Centaur Media (LON:CAU)

Although quite a long way away from Greek mythology, this business information group is now showing strong legs.
Ahead of its 2021 results being announced on 16 March, the company issued a Trading Update indicating an upgrade of its guidance for last year.

Revenues of £38.5m plus on a margin better by some 15% above consensus.

A very strong set of legs powered the group’s performance in the final quarter.

Analyst Caspar Erskine at Singer Capital Markets rates the shares as a ‘buy’.

His estimate for last year’s pre-tax profits is £2.4m, worth1.4p in earnings and covering a 1p dividend.

For 2022 he sees £42.2m revenues and £4.3m profits, generating2.4p of earnings and giving a 1.03p dividend.

Further out Erskine goes for £46.3m sales, £6.9m profits, 3.7p earnings and a 1.58p dividend per share for 2023.

He has fixed a price objective of 85p.

They closed last night at 57p – another strong hold.

(Profile 03.03.21 @ 33p set a Target Price of 41p*)

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

Comments (1)

  • Tolle says:

    The interesting but about Ramsdens is that it was the online offering of watches and jewellery which kept it going during lockdowns. It not only has physical shops but a fine online presence (multi channel as they like to say).

    With travel restrictions being lifted , the foreign exchange / currency offering will bounce back.

    And finally, for some reason which escapes me, sales of gold to Ramsdens rise when customers buy currency.

    The other quoted pawn broker, announced recently that it’s loan book was increasing nicely. I have no reason to suspect that a similar market rise is not being experienced by Ramsdens.

    So in 2022 should be back firing on all cylinders. The exact opposite of Netflix for whom the lockdown party has evaporated …

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