Small-cap round-up: featuring Lamprell, Smiths News, McBride and more…

4 mins. to read
Small-cap round-up: featuring Lamprell, Smiths News, McBride and more…

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…

Lamprell (LON:LAM) – operating losses are fast reducing, with big contracts now on hand

On Tuesday 18 May this onshore and offshore oil and gas fabrication and installation group will announce its final results for the year to end-December 2020.

Estimates from Daniel Slater, analyst at Arden Partners, suggest that revenues will have increased from $260m to $340m for the year, with adjusted pre-tax losses down massively from the 2019 figure of $105m loss, to only $33m.

Recent news of a new contract award from Saudi Aramco should help to jack sales up to $470m this year with pre-tax losses halving to just $17m.

These finals should be accompanied by a good statement on current year progress and future prospects. 

I particularly rate its chances of major business increases in its renewables side.

The group’s shares are currently looking somewhat depressed at only 61.5p, now below the 67p profile price at which I first featured the company in late January this year. They peaked at 88.5p a month later, before falling back to the current level.

I really do feel that the shares are undervalued, despite the losses, which are very fast reducing, so much so that if they stay this low for too much longer an overseas competitor may well be tempted to take the company out. 

They could well repeat their recent top quite soon.

Arden Partners currently has a ‘buy’ tag on the group’s shares, looking for 100p!

(Profile 22.01.21 @ 67p set a Target Price of 85p*)

Smiths News (LON:SNWS) – resilient trading and hopes of an attractive dividend

On Monday of next week (10 May) the UK’s largest newspaper and magazine wholesale distributor will hold an investor presentation through investor meet.

Last Wednesday’s interim results announcement for the 26 weeks to 27 February showed only an 11.5% fall in revenues to £551.6m and an 11.7% easing in adjusted pre-tax profits at £14.4m.

Highlighting just how cheap this group’s shares are currently, its interim earnings were 4.6p per share, compared with the current share price of 42.5p, which was up 8% yesterday.

But the big news is that dividends will be resumed later this year, with many market observers suggesting that it could prove to be a generous payment.

These shares are for holding, even well worth ‘topping up’ on any poor market days.

(Profile 24.07.20 @ 20.25p set a Target Price of 27p*)

P.S. Don’t forget that Worsley Investors (LON:WINV) holds some 10m shares (4.01%) in the SNWS equity, purchased at around the sub-20p price level. So, the current price rise in SNWS will help to boost still further the WINV net asset value. (P – 19.03.21 @ 25.5p TP 32p)

McBride (LON:MCB) –  higher raw costs but group still buying own shares

On Wednesday morning this private label and contract manufactured products group surprised the market with a trading update, declaring that it had been hit by sudden, unexpected, raw material price hikes.

It went on to suggest that the current financial year to end-June will come in at around 15% lower than its 2019/20 results.

That instantly swiped the share price down to a 67p low on the day before recovering on ‘cheap’ buying, closing at 78p, down from 94p.

I was pleased to see that the group, which has a ‘blanket authority’ to buy in its own shares currently, paid between 69p and 78.8p to add to its ‘treasury’ holding that day.

I have a gut feel that this is the right thing to do.

They closed at 79.7p last night after very significant trading volume.

(Profile 10.03.21 @ 79.5p set a Target Price of 99.5p)

Vertu Motor (LON:VTU) – finals due next week

The big question is – will the results announcement next Wednesday (11 May) help to justify this motor dealership’s current share price?

After having recently peaked at 46.60p, its shares are now back at 43.50p.

The group declared in its early March trading update that the year to end-February 2021 is likely to have made an ‘in line’ adjusted pre-tax profit of some £23m (£23.5m). 

Taking benefit from acquisitions the group’s turnover is expected to have grown by 4.1% during the last year. 

Two brokers follow the company closely – Zeus Capital and Liberum Capital – and both rate the shares as a ‘buy’, with the latter having fixed a 60p a share price objective, subsequent to the trading update news.

We have seen a good rise in the shares to date, but I am not tempted to see readers chase them until a lot more is known until post-lockdown trading is reported.

(Profile 12.10.20 @ 30.5p set a Target Price of 40p*)

(Asterisk* denotes that Target Prices have been achieved since profile publication)

Profile company results, meetings and updates expected within the next two weeks:

Tue 11Air Partner (AIR)Fins
 Angling Direct (ANG)Fins
 Capita (CPI)AGM
 Macfarlane GrpAGM
 Smiths News (SNWS)Inv Pres
 The Gym Grp (GYM)AGM
 Zytronic (ZYT)Ints
Wed 12Bigblu Broadband (BBB)AGM
 Centaur Media (CAU)AGM
 Secure Trust Bank (STB)AGM
 Vertu Motors (VTU)Fins
Fri 14Futura Medical (FUM)Fins
Mon 17Hollywood Bowl Grp (BOWL)Ints
Tue 18Forterra (FORT)AGM/TU
 Lamprell (LAM)Fins
 Sureserve Grp (SUR)Ints
 Topps Tiles (TPT)Ints
 Watkin Jones (WJG)Ints
Wed 19Keller Grp (KLR)AGM
 Medica Grp (MGP)AGM
 Premier Foods (PFD)Fins
 Safestyle UK (SFE)AGM
Thu 20McColl’s Retail Grp (MCLS)AGM
 Wincanton (WIN)Fins
Fri 21Circassia Grp (CIR)AGM

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