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  • Writer's pictureMark Watson-Mitchell

Braemar Shipping Services, Brickability, Bloomsbury Publishing, RBG Holdings

4th June 2021

Braemar Shipping Services (LON:BMS) – broker ups its price objective from 281p to 444p

Yesterday’s results announcement from this shipbroking group indicated a significant strength in its year to end February.

And what is more, it appears that the improving global trade climate is continuing to generate in this current year.

Broker’s analysts Guy Hewett and Michael Clifton at finnCap are impressed by the group’s focus on its broking side coupled with its recent restructuring and reduction of its debt following disposals.

They go for £122.4m of revenues and £11.3m of adjusted pre-tax profits, worth 24.1p per share in earnings, with a 5.7p dividend.

Upon the basis of valuing the group at 17 times those estimates that would underline their new price objective of 444p (281p) for its shares, which is still a 33% discount to that of its larger, long-standing peer Clarkson.

The shares close the week at around 250p, but obviously heading higher, in my view.

(Profile 05.12.19 @ 185p set a Target Price of 250p*)

(Profile 20.05.20 @ 99p set a Target Price of 150p*)

Brickability Group (LON:BRCK) – what an excellent deal

Wednesday’s announcement that this ‘buy to build’ group is paying £63m for the Taylor Maxwell Group was a major step forward in the group’s acquisition programme.

Taylor Maxwell is one of the UK’s leading suppliers of timber and non-combustible cladding for the construction industry.

To fund the deal the group issued nearly 58m new shares at 95p each by way of a Placing, while its also sold 40m new shares by way of a secondary Placing.

A great deal in one swipe and taking advantage of a firm share price to fund its way ahead.

The shares at 102p, after 105p, look to me to be great value – heading for 125p soon methinks.

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

Bloomsbury Publishing (LON:BMY) – thank goodness for Covid-19

Boss Nigel Newton is playing a set of fine cards presently.

I first met Nigel way back in the mid-1990’s when he floated his publishing group. I even enjoyed a bottle or two of Newton’s Vineyard Cabernet Sauvignon wine, from the Napa Valley in California.

But I digress.

Top authors within his coterie include Sarah J. Maas and Harry Potter’s Jo Rowling – the latter has been an incredible boost to the group’s fortunes over the last couple of decades.

But the group is concentrating upon building up its digital offerings and is gently snapping up smaller publishing companies to fit into its growing library.

This week it has just paid £7.35m for Head of Zeus, whose names include Dan Jones, Cixin Liu, Elodie Harper and Victoria Hislop.

A few weeks ago it paid Macmillan Education £3.7m for its Red Globe Press

Newton stated that his group’s 31% profit surge to £17.3m was a result as people discovered reading again during the pandemic’s lockdowns. He said that "The popularity of reading has been a ray of sunshine in an otherwise very dark year.”

I have a lot of time for the way Newton does his business and was obviously pleased to see his group’s shares put on 40p on this week’s results and acquisition news closing the week at around the 342p level, after hitting 366p.

Bloomsbury is an excellent story in itself and its shares are going higher.

(Profile 28.02.19 @ 231p set a Target Price of 257p*)

(Profile 27.03.19 @ 238p set a Target Price of 270p*)

RBG Holdings (LON:RBGP) – 160p a share price value

Following the recent acquisition of the Memery Crystal legal services group brokers are now increasing their current year revenues and profits for Nicola Foulston’s expanding law outfit.

Estimates by N+1 Singer’s analyst James Bayliss suggest that revenues to end December 2021 will be £45.5m (£5.6m) and that adjusted pre-tax profits will be around £9.1m (£5.8m), worth 7.9p in earnings and 4.75p dividend per share.

For next year Bayliss goes for £56.2m of revenues and £13.0m profits, worth 11p in earnings and covering a 6.58p per share dividend.

He considers that the shares at 135p are trading 25p lower than Bayliss’ intrinsic value of 160p per share.

Hold very tight, the group’s AGM is due on Thursday 17 June so more to be told, I hope.

(Profile 05.02.21 @ 80p set a Target Price of 100p*)

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


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