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  • Writer's pictureMark Watson-Mitchell

HAT (up 24.2% in just 13 days) as well as BRCK, JNEO, CODE and FUL – all looking good

On Wednesday 6 July I initiated a profile on the UK’s largest pawnbroking business H&T Group (LON:HAT) – its has since roared away as the market began to realise just how cheap its shares are currently.

In just 13 trading days the group’s shares have advanced 24.2% from the 332.5p profile price.

That progression has convincingly beaten through my Target Price of 400p, which I suggested would be an easy aim.

I had no idea that the upward price reaction would be so quick and so strong.

What is more, I reckon that there is still a lot of upside left in the price.

The shares closed last night at 410p where they are a very firm hold.

But if you are a new buyer, after such a quick rise, it may pay to wait and watch for any cheaper opportunities to get aboard.

(Profile 06.07.22 @ 332.5p set a Target Price of 400p*)

Brickability Group (LON:BRCK) – the growth continues at a real pace

The year to end March 2022 saw the leading UK brick factor report a 187.2% rise in group revenues to £520.2m (£181.1m), while its adjusted pre-tax profits increased 131.3% to £34.7m (£15.0m), lifting its earnings 80.9% to 10.06p (5.56p) and the dividend to 3.0p (1.96p) per share.

The group is an excellent example of a buy-to-build structure and the use of its equity over the last couple of years has been well rewarded with these results.

Its acquisition strategy will, no doubt, be ongoing, however, there must now be a concentration upon the group’s organic growth.

Chairman John Richards stated with the results that

“Trading in the first quarter of FY2023 has been very encouraging and, as a result of the contribution from the group's acquisitions at and following year end, the group is well positioned to modestly exceed market expectations for the current financial year.

Whilst mindful of the broader macroeconomic uncertainties the Board believes that our diversified multi business strategy places us in a strong position to meet all stakeholder requirements moving forward.”

Analyst Kevin Cammack at the group’s brokers Cenkos Securities rates the group’s shares as a Buy looking for a ‘fair value’ of 122p a share.

Cenkos states that the shares show excellent upside from these depressed sector levels.

In my view the shares, which in October last year were up to 114p, are very capable of rising back above the 100p level just on these figures alone.

Now at 79p, after yesterday’s results, there is scope for the shares to make a quick 25% appreciation and even then continue to offer potential for a further price hike.

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

Journeo (LON:JNEO) – Trading Update due shortly, very appealling

This £10m capitalised group engages in the provision of tailored solutions for the transport community.

The company is an information systems and technical services business focussed on public transport and related infrastructure within towns, cities, airports, and local authorities.

Its two main segments are Fleet Systems Solutions and Passenger System Solutions.

They help to capture, process and display essential information to enhance journeys both in the UK and in Europe.

Its systems take in: passenger counting; on-board wi-fi; driver behaviour for buses, coaches and specialist vehicles; station information security systems; web departure boards; advertising; and time information amongst so many other useful solutions for transport operators.

The group has a very impressive list of clients including Stagecoach, Heathrow, National Express, Metroline, Arriva, Gatwick Airport, Abellio, First Bus, Chiltern Railways, London Stansted, Network Rail and NZ Bus.

Just yesterday it announced that it had won a £0.6m order for a passenger information system for a Northern Transport Partnership City Centre bus station upgrade.

That added to the company’s strong order book, giving it future revenue visibility.

Why am I telling you this?

Well, I guess that the group could be announcing its first-half Trading Update fairly shortly.

I consider that the group’s shares have yet to respond to its sales and profit prospects.

At the start of February this year Cenkos Securities took over as the group’s NOMAD and Broker.

Their analyst, Andrew Renton, has estimates out for the group to kick revenues up from £15.6m to £18.0m for the year to end December, with pre-tax profits more than doubling from £0.4m to £0.9m, with earnings leaping from 4.7p to 10.4p per share.

Reflecting the groups growing order book, for next year he sees £21.6m sales, £1.5m profits and 17.1p in earnings per share.

He rates the shares as a Buy, with a ‘fair value’ of 232p a share.

So, if the interim Trading Update is close at hand, then it might make a very good punt in the shares ahead of good news.

Last night they closed at 115p, some 40p lower than their peak last September, at this level they would only be trading on 6.7 times next year’s earnings – very appealing.

(Profile 07.04.21 @ 95.5p set a Target Price of 120p*)

Northcoders Group (LON:CODE) – demand achieving record highs

The world of software coding is far out of my technical capacity, so I am glad that I can make use of the ability of others when working by way of their software.

This £17m group, which only came on to AIM a year ago, is an independent provider of training programmes for software coding.

On Tuesday of this week, the Manchester-based company issued a Trading Update for the first half-year to end June.

By that period end the company was already at 83% of the current market expectations.

A pointer of its growth is visible from the massive demand for its programmes, showing 3,494 applications in the first half-year, which compared with 3,662 applications for the whole of last year.

Perhaps I should be applying too, the company operates Coding Bootcamps in Manchester and Leeds, as well as online.

They take just 13 weeks to train a beginner into a software developer, they have a 95% success rate, but with me that task could be the same number of years.

However, the group’s broker WH Ireland is very bullish about the it’s profit hopes for this year.

Their analyst Nick Spoliar is estimating sales revenues more than doubling to £6.5m (£3.0m) helping to take its adjusted pre-tax profits up from just £0.1m to £0.8m for the year to end December.

That should see its earnings lift up to 9.6p (3.0p) per share.

For 2023 Spoliar has estimates out for £10.5m sales, £3.2m profits and 36.6p in earnings per share.

He has a 320p ‘fair value’ estimate on the shares.

I am much more bullish because I can feel a tremendous scalability in this group.

Last night the shares closed at 245p in a wide price spread and a very tight market.

These shares are for buying and tucking away.

(Profile 28.01.22 @ 296p set a Target Price of 370p)

The Fulham Shore (LON:FUL) – even more new sites being opened

This £80m group operates 66 Franco Manca and 23 The Real Greek eateries in the UK.

It is growing fast, and another 16 sites could be added to those numbers in due course.

Its aim is to have some 120 restaurants in operation by the Spring of 2025.

Yesterday the company announced its results for the year to 27 March 2022.

They declared a 105.2% revenue increase to £82.7m (£40.3m), and a pre-tax profit £3.9m (£7.5m loss).

Executive Chairman David Page commented that:

"Fulham Shore delivered a very strong performance with revenue more than doubling against the prior year, reflecting the quality of our two restaurant businesses as well as the easing of pandemic-related trading restrictions.

Whilst the first quarter of the year has been characterised by increasing pressures on the UK consumer, our restaurants remain crowded with customers seeking a great experience, quality food, and importantly outstanding value.

We will always aim to keep our prices low, driving high customer numbers per site and making for fun, atmospheric restaurants, as well as motivated employees. These key ingredients underpin the Board's confidence in our continued growth."

Analyst Sahil Shan at Singer Capital Markets has a price objective of 24p on the shares.

For the current year to end March 2023 he has an estimate of £105.3m and £3.6m adjusted pre-tax profits, with 0.4p earnings per share.

Jumping forward into the next year he sees £120.9m sales, £6.4m profits and earnings of 0.7p per share.

Shan clearly states that

“Fulham Shore has not put a foot wrong in the last 3 years, the management team is one of the strongest in the industry and the businesses value proposition is well placed to navigate the macro headwinds.”

The shares closed at 12.50p last night, up 8.7% on the results, at that price they have strong upwards potential.

(Profile 15.12.21 @ 16p set a Target Price of 20p.)

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


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