In this weekly summary, Mark Watson-Mitchell updates his readers on previous company profiles and other news of interest from the exciting world of small-cap shares…
Amino Technologies (LON:AMO) – getting tuned-in globally
This global media tech company, which delivers modern TV and video experiences, is due to be announcing its first-half results on Tuesday 3 August. That is when we should get various upgrades to current year and prospective years’ 2022/2023 figures.
In the meantime, the company is beginning to pump out details, albeit scant, of new deals that it is tying up across the world.
They follow the recently issued first-half results which showed some strong trading.
The shares, now trading at around 169p, are just a few pennies short of their recent peak but have the look of a charge up to the 200p level in due course.
(Profile 09.12.20 @ 121p set a Target Price of 155p*)
Anexo Group (LON:ANX) – claims to be better
The pre-AGM statement from this specialist integrated credit hire and legal services provider detailed that overall trading is in line with management expectations.
That is despite travel restrictions and a massive build-up of cases awaiting court.
Arden Partners analyst Andrew Simms rates the shares as a ‘buy’ with a price objective of 280p.
For the current year to end-December he is looking for sales to rise from £86.8m to £94.1m, with adjusted pre-tax profits rising from £16.1m to £20.6m, worth 14.2p in earnings.
For 2022 his estimates are £104.3m sales and £24.7m profits, with 17p of earnings.
The shares at 140p are expected to pick up as lockdowns end.
My price objective remains the same.
(Profile 23.04.20 @ 134p set a Target Price of 175p)
Avingtrans (LON:AVG) – a good slice of PIE
There should be a full-year trading update issued on Thursday 1 July by this group.
The company has a number of business units involved in various sectors. It designs, manufactures and supplies original equipment, systems and associated aftermarket services to the energy, medical and industrial markets worldwide.
Richard Hickinbotham, at N+1 Singer, has estimated that for the year to end-May the group saw revenues lower at £98.5m (£113.9m) but with adjusted pre-tax profits up from £6.0m to £7.4m. He sees earnings at 20.0p per share (16.9p), capable of covering a 4.0p dividend (nil).
Remember that the strategy of this group is PIE – pinpoint, invest and exit.
I like that strategy and consider that the company really works hard at identifying opportunities in which to invest its time and management efforts as they improve before selling off.
So, watch out for the subsequent share price boost as disposals are enacted.
The shares at 380p are sure to rise a lot further, so hold tight.
(Profile 04.11.20 @ 260p set a Target Price of 325p*)
D4T4 Solutions (LON:D4T4) – it is all about the DATA
On Tuesday 29 June we shall get this company’s end-March 2021 results. Will they be good enough to maintain the currently strong share price, now at 368p?
Analyst Lorne Daniel at the software and computer services group’s brokers, finnCap, is positive about the company, having recently upped his price objective to 400p.
He sees last year as having increased sales from £21.7m to £22.8m but with a profit falling back to just £4.2m from £5.0m, earnings much lower at 8.4p per share against 11.2p.
Furthermore, he sees £24.0m of revenues in the current year and just £3.8m pre-tax, worth 8.0p per share.
We have enjoyed a good run with this group’s shares in the last year, so some ‘top-slicing’ would be sensible.
(Profile 09.04.20 @ 170p set a Target Price of 215p*)
Dekel Agri-Vision (LON:DKL) – nuts and palm oil
This West African focused agriculture company is really progressing with losses being soon turned into annual profits and sales looking to have doubled within two years.
Its operations are currently centred around its sustainable palm oil and cashew processing projects.
Theo Bache at brokers Arden Partners is estimating €35.3m (€21.9m) of sales to end-December this year. That should help to turn the €1.8m adjusted pre-tax loss around to €0.6m profits.
Next year he estimates €44.3m of sales and €2.5m profits, worth 0.4c per share in earnings.
After hitting 6p in mid-January the group’s shares have gone into some limbo action at around the current 4.75p.
If they get any cheaper holders may do well out of an upwards averaging.
(Profile 23.09.20 @ 2p set a Target Price of 3.5p*)
discoverIE Group (LON:DSCV) – bank some profits
This group is a leading international designer, manufacturer and supplier of customised electronics to industry.
It employs some 4,400 people and its principal operating units are located in Continental Europe, the UK, China, Sri Lanka, India and North America.
The company will be holding its AGM on Thursday 29 July, at which time it will announce its first-quarter results update.
Katherine Thompson, an analyst at Edison Investment Research, is going for an uplift in current year sales from £454.3m to £498.0m for the year to end-March 2022.
She computes profits will rise from £32.6m to £35.3m, with earnings lifting fractionally from 27.0p to 28.6p per share.
For 2023 she goes for £513m and £37.2m respectively, worth 29.7p in earnings.
The shares at 880p each are trading on a very high price earnings multiple of over 30 times.
No doubt that will decrease as more profits are scored. Even so, I could not dissuade holders from banking some of their gains.
(Profile 08.08.19 @ 438p set a Target Price of 550p*)
Driver Group (LON:DRV) – still boring
Oh my goodness, this global consultancy group has been such a dismal and boring performer.
I am afraid that I cannot see there being any chance of my price objective ever being achieved.
And that is despite there obviously being some signs of corporate recovery within the group.
The shares are currently trading at around 56p.
Would I set the same objective again today? Absolutely no way – sorry readers.
(Profile 23.04.19 @ 59p set a Target Price of 85p)
Elixirr International Group (LON:ELIX) – challenging upgrades
Boring is certainly not how I would describe this challenger consultancy group.
On Wednesday of this week the group issued its AGM statement, which I feel was very encouraging.
It appears that the first five months of the current year to end-December, saw strong revenues increase by 76%, certainly sufficient to get broker’s analysts upgrading their forecasts for the year.
Guy Hewett at the group’s brokers, finnCap, estimates revenues will rise from £30.3m to £45.5m for this year, while profits could improve from £8.7m to £12.2m, lifting earnings to 19.7p per share against 16.0p previously.
He has increased his price objective from 507p to 662p, compared to the current 550p at which the shares trade currently.
This relative newcomer has proved to be a little cracker, with even more upside still on offer.
(Profile 21.09.20 @ 227p set a Target Price of 285p*)
Epwin Group (LON:EPWN) – building up again
It is hardly surprising, you might say, that the near ending of the lockdowns and the sudden boom in the property market has brought this group more business.
The group is a leading manufacturer of low maintenance building products. It supplies the repair, maintenance and improvement sector, as well as the new build and housing sectors.
This current year to end-December has got off to a flying start, continuing the recovery that was being experienced at the end of the company’s last trading year.
Analyst Toby Thorrington at Edison Investment Research reckons that sales could rise 25% this year to £301.7m, with pre-tax profits doubling to £10.0m and earnings increasing to 5.6p (4.0p) per share and more than doubly covering an estimated 2.5p per share dividend.
For next year he has already pencilled in £306.8m of sales, £13.3m of profits, 7.5p of earnings and a 3.4p per share dividend.
The group’s shares, now 109.5p, have performed extremely well of late and are now on an ambitious price-earnings ratio for the sector.
(Profile 22.08.19 @ 73.5p set a Target Price of 100p*)
MP Evans (LON:MPE) – little Covid-19 impact
The Indonesian-based sustainable palm oil producer gave a bullish AGM statement last week.
The first five months of this year, to end-May, have shown very strong production levels and crop prices.
The group’s brokers are going for current year revenues rising from $174.5m to $219.1m, while pre-tax profits should leap to $44.7m ($28.8m), taking earnings up to 59c per share against 38.1c previously.
By the end of 2023 the brokers estimate $224m revenues will generate $60.8m pre-tax profits, worth 80.3c per share in earnings.
Now you can understand why the company has been such a massive buyer of its own shares. Brokers finnCap have a price objective on the shares at 1,000p each, compared to the current 715p – so still more to go for in my opinion.
(Profile 07.04.20 @ 540p set a Target Price of 700p*)
IDOX (LON:IDOX) – see for yourself
The interim results from this UK public sector and global engineering software solutions business highlighted a strong performance and advancing strategy for the six months to end-April.
On a 4% revenue increase to £31.1m the company raised its adjusted pre-tax profits by 45% to £6.4m, while earnings leapt ahead by 98% to 1.13p per share.
Those were just the half-timers. For the year to end-October analysts Gareth Evans and Ian Poulter at Progressive Equity Research have estimated revenues coming in at £65.7m and profits of £12.0m (£10.5m), with earnings of 2.2p per share.
For the coming year they go for £67.2m of revenues, £14.8m of profits and 2.7p of earnings.
However, before that all comes about, we could well see the group expand through a strategic acquisition or two.
Despite a higher price-earnings ratio I am still very keen on these shares, now 65p.
The group is holding a webinar at 4pm next Tuesday afternoon through Progressive.
(Profile 30.04.20 @ 38.5p set a Target Price of 50p*)
Johnson Service Group (LON:JSG) – clean recovery
My timing was awful in profiling this company when I did, just as Covid-19 was about to decimate its business.
But second guessing and reacting accordingly is what this market is all about.
So, could now be the time to take a good recovery punt on the shares of this UK textile services provider?
Certainly, the fund managers of BlackRock seem to think so – last month they topped up their holdings to 5.73% of the JSG equity.
We already know, and understand, that the last fifteen months have been disastrous for the business, and this week’s extension of the lockdown cannot have been of any help either.
But jumping the virus and into next year it is more than likely that we will see the group really bounce back sales and profits-wise.
Analyst Andrew Gibb at Arden Partners forecasts that this year to end-December will see sales up from £229.8m to £253.6m, with adjusted pre-tax profits of £5.4m replacing last year’s ghastly £17.0m loss.
Then for next year Gibb goes for a big sales uplift to £352.4m, then a nine-fold increase in profits to £46.9m, worth 8.6p per share in earnings.
For the 2023 year he is already stabbing at a £371.8m turnover producing £52.8m in profits, worth 9.7p in earnings.
The shares close the week at around the 170p level – at which they could prove to be an excellent ‘recovery’ purchase, but my price objective could well be way off, so I now adjust it down to 215p.
(Profile 24.12.19 @ 196p set a Target Price of 250p)
(Asterisk* denotes that Target Prices have been achieved since profile publication)
Profile company results, meetings and updates expected within the next two weeks:
|Mon 21||Randall & Quilter Inv Hldgs (RQIH)||AGM|
|Tue 22||Idox (IDOX)||Webinar|
|Palace Capital (PCA)||Webinar|
|Trackwise Designs (TWD)||Fins|
|Wed 23||Angling Direct (ANG)||AGM|
|Joules Group (JOUL)||T/U|
|Manolete Partners (MANO)||Fins|
|Vertu Motors (VTU)||AGM|
|Thu 24||Redcentric (RCN)||Fins|
|STM Group (STM)||AGM|
|Westminster Group (WSG)||AGM|
|Fri 28||Futura Medical (FUM)||AGM|
|Tue 29||Crimson Tide (TIDE)||AGM|
|D4T4 Solutions (D4T4)||Fins|
|Wed 30||Block Energy (BLOE)||AGM|
|National World (NWOR)||AGM|
|Stagecoach Group (SGC)||Fins|
|Studio Retail Group (STU)||AGM|
|Topps Tiles (TPT)||T/U|
|Thu 1||Polar Capital Holdings (POLR)||Fins|