Just what connects two dollars, a nut, a brownfield, a pier and then a sausage skin – that is the question?
The answer is – absolutely nothing other than Monday morning.
Enigmatic? Not really, especially if you follow the UK small-cap market section as closely as I do when looking down the results announcements.
Monday morning saw me reading through the latest company results from six of my previous Profile stocks – and I liked what I scoured!
Dollar one – CentralNic Group (LON:CNIC)
This global internet platform group declared its Q4 Trading Update for 2021, showing an organic revenues growth of 37% for the full year to end December.
The consensus was previously for $383m, so the 5% uplift in its guidance was impressive.
Now the group is expecting to report some $410m for last year, whilst raising its EBITDA expectation to $45m, previously $42.9m.
We will have to wait until Monday 28 February for full publication of its finals.
In the meantime, analyst Bob Liao at Zeus Capital is impressed with the strength of the group’s Online Marketing side. He is looking for the year to end December last to show turnover up from $241.2m to $385.2m and adjusted pre-tax profits rising from $19.8m to $30.1m.
The group’s shares have since risen to 137.75p.
There is so much more to expect from this expansive and acquisitive group.
(Profile 12.07.21 @ 89p set a Target Price of 110p)
Dollar two – Iofina (LON:IOF)
Following the Trading Update, for the final three months to end December from this iodine producer, its broker upped its price objective for the group’s shares from 25p to 29p.
Demand had been strong for iodine and iodine derivatives against a rising iodine spot price, which increased over 25% in last quarter.
Analyst Jonathan Wright at finnCap is estimating that 2021 saw revenue rise from $29.7m to $36.7m, more than trebling adjusted pre-tax profits to $4.5m ($1.3m), generating 2.3c (0.7c) in earnings per share.
Dr Tom Becker, CEO, commented that: “with production stabilised, our specialty chemical business performing well, and the iodine market fundamentals turning increasingly favourable, the outlook for 2022 is certainly encouraging.”
However, the group’s shares fell back on the Update, perhaps upon profit-taking – slipping 2p to 17p, they touched 20.5p early last week.
Give them some time and I see that recent peak being achieved again before the results are published in May.
(Profile 29.07.20 @ 13.5p set a Target Price of 18p)
A nut – MP Evans (LON:MPE)
I am sure that the 2021 crop and production statement from this producer of sustainable Indonesian palm oil was well received by my Master Investor colleague Simon Cawkwell (the inimitable Evil Knievel).
No doubt he was even more pleased with the announcement of a special dividend of 5p a share.
A very resilient CPO price in 2021 proved very beneficial to the £450m capitalised group.
Analysts Raymond Greaves and Michael Clifton at brokers finnCap were impressed enough to raise their price objective for the group’s shares to 1050p.
They also raised their estimating for last year’s figures to $276.2m revenues ($174.5m) and adjusted pre-tax profits of $90.8m ($28.8m), catapulting earnings up to 119.9c per share (38.1c), enabling a jacking up of its dividend from 29.7c to 47.3c for the year.
Chairman Peter Hadsley-Chaplin, commented: “The group has achieved a significant increase in crop processed which, in conjunction with the strong palm-oil market, will form the basis for an excellent result for the year.
We anticipate further crop increases from the group’s first-class estates and, with current CPO sales at prices approximately US$200 per tonne above the 2021 average, 2022 is already off to a very encouraging start.“
The full 2021 results will be out in March, until then we can expect further strength in the share price, now 837p.
(Profile 07.04.20 @ 540p set a Target Price of 700p)
A brownfield – Inland Homes (LON:INL)
This ‘capital light’ specialist housebuilder, regenerator and ‘brownfield’ developer has a growing side of its business – asset management.
On behalf of investors, it puts together projects and manages them from identifying likely sites through the often-laborious process of getting planning permissions then on to the construction and eventual marketing.
It currently has six such projects on hand, with a combined potential of some 3,300 homes.
Obviously along the way it comes up against objections from local residents, from local councils and authorities, even from local Mayor’s offices.
But Inland does its work professionally and stands by its request for permissions. The Borough of Hillingdon sought a Judicial Review to overturn the planning permissions granted in September 2020.
However Inland has won through yet again. Over the last twenty years it has achieved a 100% success rate in securing permissions on brownfield sites.
On Monday morning the company announced that the High Court had quashed the Hillingdon request – it had tried to put down the project in so many ways, all of which are now firmly closed against the Borough.
Stephen Wicks,. the boss of Inland, stated that: “The former Master Brewer site is a brownfield site that has been vacant for 11 years and is exactly the type of scheme where we can make a meaningful contribution to housing delivery in a sustainable way.
We are very pleased that this scheme has cleared the final obstacle to its development. This consent has taken over three years to be validated and has been extremely difficult to achieve. It is very disappointing that it should be such a long and torturous process to develop on an allocated brownfield site in a highly sustainable location.
The Hillingdon Gardens site is part of our asset management division, where we are seeing increasing demand for our experience and skill in navigating the planning system. This will be an area of primary focus in the coming year and we are excited about the opportunities in this growing area of the business.“
Upon this piece of news, the group’s shares went to 59.9p (within a whisker of my recent price aim), before easing back on much more than double the average dealing volumes.
They closed last night at 54p, a bargain price in my view.
Hold very tight, the 2021 September year end final results are due within days.
(Profile 13.08.19 @ 68p set a Target Price of 110p)
(Profile 24.10.19 @ 77p set a Target Price of 110p)
(Profile 29.10.21 @ 46.5p set a Target Price of 60p)
A pier – The Brighton Pier Group (LON:PIER)
Despite Covid-19 and its Omicron and other variants this diversified entertainment group has done fairly well in its first half year to the end of December.
In fact, the group, which operates the Brighton Palace Pier, the Lightwater Valley theme park, premium bars and min-golf centres, put in a good report upon its activities.
Against 2019 comparative period figures – the Pier saw sales up 15%, golf up 33%, the bars up 27%, and with the June 2021 acquired theme park, trading ahead of expectations.
A cracking performance in very difficult trading conditions.
However, the good first half still points to a very big uplift in the year to end June 2022. Estimates are for £37m of revenues (£13.5m) and adjusted pre-tax profits of £5.5m (£1.5m), worth 11.9p in earnings against 5.7p per share last time.
Analyst Peter Renton at brokers Cenkos Securities rates the group’s shares, as a ‘buy’, seeing them as ‘significantly undervalued’ – I totally agree!
Last night they closed at 83p after touching 89p earlier in the day. Hold very tight.
(Profile 30.06.21 @ 61p set a Target Price of 75p)
And a sausage skin – Devro (LON:DVO)
This company is big in sausage skins. It is in fact one of the world’s leading suppliers of collagen casing for food, used by over 1,000 producers of a wide range of sausages and other meat products.
With manufacturing sites in the US, the Netherlands, China, the Czech Republic, Australia and the UK, it operates in over 100 countries globally.
I am expecting the £340m capitalised company to be shortly issuing a Trading Update for the year to end December 2021.
Despite supply hassles I am hoping that it will be positive.
Expectations are for sales last year to have increased by just £4m to £252m, but with pre-tax profits increasing from £29.4m to £37.4m, earnings of 18p a share (14p) and a 9p (9p) dividend.
Its shares have been edging gently ahead over the last few days, now 203p.
(Profile 28.04.20 @ 149p set a Target Price of 180p*)
(Asterisks * denote that Target Prices have been attained since Profile publication)