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  • Writer's pictureMark Watson-Mitchell


Marlowe (LON:MRL) – doubled profits

Specialising in business-critical services and software is doing well for this group. The interims to end September show revenues up 61% at £134.5, pre-tax profits 127% better at £15.2m and earnings 50% better at 16p per share.

We have an indication of a good result for this year to March 2022, with the group’s brokers estimating sales up to £297m (£192m) and more than doubled pre-tax profits at £36.2m (£17.1m).

Earnings are expected to jump from 24.6p to 36.3p per share for this year.

Analyst Peter Renton at brokers Cenkos Securities rates the shares as a ‘buy’ and gives them a ‘sum of the parts’ value of 1016p.

His estimates for next year see £340m sales, £46.4m profits, with earnings of 44.8p per share.

Now at 925p each they have been excellent constituents in the profile list and should continue to be so.

(Profile 30.01.20 @ 468p set a Target Price of 550*)

Town Centre Securities (LON:TOWN) – going higher

This group is involved in property investment, development and car parking, with interests in Leeds, Manchester, Scotland and London.

Its net tangible assets figure is 284p a share compared with the current share price of 134.25p.

Against the backdrop of a challenging year to end June revenues came in at £22.5m (£29.0m) while the previous £2.1m pre-tax profit came out at a £1.8m loss.

However, Tom Musson, analyst at Liberum Capital rates the group’s shares as a ‘buy’ looking for current year sales lifting to £27.2m and a pre-tax profit of £3.1m, worth 6.9p in earnings per share and covering the REIT’s 6.3p dividend per share.

He was impressed by the last year’s fall in its loan to value from 56% to just 51%, dropping to 48.2% being possible this year.

His price objective is a mighty 190p a share, which offers some appealing upside to the shares.

(Profile 17.11.21 @ 130p set a Target Price of 165p)

Circle Property (LON:CRC) – broker’s ‘buy’

Its net asset value is 274p, while its shares stand at 204p. The group’s balance sheet is a lot stronger after two sales, some 29% loan to value.

Impressively its rent collection in the first half to end September was some 92%.

Selwyn Jones, an analyst at Cenkos Securities, suggests that the shares are a ‘buy’ and is looking for £2.9m pre-tax profits for the year to end March 2022, worth 9p per share in earnings and covering a 7p dividend.

The shares touched 229p way back in February last year but later fell back.

I remain hopeful that my price aim will be met within the next year or so.

(Profile 19.11.19 @ 206p set a Target Price of 235p)

Eqtec (LON:EQT) – great connection

The collaboration agreement with the Wood group looks to be a very strong step by this world-leading gasification solutions company.

Brokers Arden Partners analyst Theo Bache sees the group making a small profit of £0.5m in the year to the end of this month, on the back of £15.8m of revenues, against £1.8m sales and a £4.3m loss previously.

For the coming year he anticipates a very big bounce in sales at £62.4m and a £13.3m profit, worth 0.1p per share in earnings.

Rating the shares, now 1.4p each, as a ‘buy’ his forecast is 5p a share.

Still some way to go yet.

(Profile 08.02.21 @ 2.2p set a Target Price of 3p)

One Media iP Group (LON:OMIP) – tuning in

Well, earlier this year, in mid-July, the shares of this digital music rights acquirer, publisher and distributor got within a whisker of my price aim, touching 9.5p at one stage.

The easing back to 7.5p now puts the shares on a big discount to its broker’s implied 12.9p ‘conservative’ rating.

The latest Trading Update for the year to end October brings about estimates of £4.5m of revenues for the year (£4m) and pre-tax profits of £1.0m (£0.8m).

For this year analyst Peter Renton at Cenkos Securities rates the shares as a ‘buy’ going for £5.2m sales and £1.1m profits for this year, worth 0.4p per share in earnings.

I remain hopeful that my objective will be attained in the shorter term.

(Profile 21.02.19 @ 5.75p set a Target Price of 10p)

Secure Trust Bank (LON:STB) – almost half ‘fair value’

This Solihull-based consumer and commercial banking specialist is expecting to see the next year slashing its pre-tax profits from an estimated £52.7m for the year to the end of this month, to just £36.3m.

That is due to loan impairments and provisioning.

Earnings are expected to be around 226.5p this year and falling back to 156.6p per share next year, while the dividend could fall severely from 56.6p to 39.1p per share.

Even so, analysts Pedro Fonseca and Andrew Mitchell at Edison Investment Research estimate that the group’s shares have a fair value is 2234p against the current 1330p.

The shares touched 1420p in early August this year, so we may not have to wait too long for my price objective to be scored.

The Q4 Trading Update is due next month.

(Profile 12.04.21 @ 1210p set a Target Price of 1500p)

Springfield Properties (LON:SPR) – building upwards

Upon a £56.4m takeover of the Inverness-based Tulloch Homes, a private Highlands developer, Scotland’s only quoted housebuilder has just raised £22m by way of a Placing of 15.7m new shares at 140p each.

There is a strong Scottish market currently which leads analyst Alastair Stewart at Progressive Equity Research to estimate revenues for the year to end May 2022 to rise to £259.8m (£216.7m).

He sees pre-tax profits coming in at £22.0m against £18.5m, with earnings of 15.9p (14.2p) and an increased dividend of 6.50p (5.75p) per share.

For 20223 and 2024 his estimates are £309m sale then £340m, then £28.4m of profits and £32.9m respectively, lifting earnings up to 19.2p then 20.6p per share.

Those that have participated in the Placing, which was at 6% above the pro-forma net asset value, could do very well with their new holdings over the next year or so.

Still cheap at 146p.

(Profile 05.03.19 @ 114p set no Target Price)

Topps Tiles (LONTPT) – robust trading so far

The UK’s largest tile specialist declared record revenues for the 53 weeks to 2 October, up 18.3% from £192.8m to £228.0m. Compared to last year’s £9.8m loss the group made a £14.3m pre-tax profit, worth 5.59p per share in earnings and covering a 3.1p dividend.

Liberum Capital analyst Adam Tomlinson continues to rate the shares as a ‘buy’ looking for 110p a share as his price objective.

He estimates current year sales to end September 2022 of £230m and £14.9m of profits, worth 6.1p per share in earnings double covering a 3.1p dividend per share.

The CEO Rob Parker stated that "Trading in the initial weeks of the new financial year has been robust with two-year Retail like-for-like sales growth of 18.4%. While trading headwinds are likely to continue over the short term, we are confident in our strategy and our ability to deliver sustainable long-term growth."

In August this group’s shares were trading at 81p, still 20% below my aim.

However, trading now at 63.4p it seems as though it could take a while before they get up above that August price.

Let us hope that the company can manage to keep its veteran staff, despite stroppy customers – last week’s case cost the company.

(Profile 09.05.19 @ 75p set a Target Price of 100p)

And finally ……

After the market gyrations of the last week or so, I am attracted by the number of ‘wrongly priced value stocks’ around currently, such as …

Mothercare (LON:MTC) – the recent interims to 10 October showed £44.4m of sales (£41.7m) and an adjusted pre-tax profit of £3.6m (£4.4m loss), taking earnings at half time up to 0.6p per share.

However, in the last week the shares have been a firm market in response to the current year hopes, up to 20p at one stage before easing back to the current 19.5p.

Hold tight.

(Profile 30.08.21 @ 15p set a Target Price of 18p*)

(Asterisks * denote that Target Prices have been attained subsequent to profile publication)


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