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  • Writer's pictureMark Watson-Mitchell

Small Cap catch-up – FRP, TLY and GFRD

FRP Advisory Group (LON:FRP) – broker’s aim of 185p

On Thursday 15 September this leading specialist business advisory group will be holding its AGM to sign off its last trading year to end April.

The period saw revenues rise from £79.0m to £95.2m, with adjusted pre-tax profits increasing from £21.2m to £23.1m, pushing earnings up to 7.6p (7.1p) and covering its dividend of 4.3p (4.1p) per share.

On the face of it the group’s shares may look expensively rated, with its shares closing at 164p on Friday night, after having hit 169p at their peak.

The group, whose strategic business advisers help clients create, preserve and recover value, is valued at some £408m.

Operating from 26 different locations in the UK, it has over 500 team members and 80 Partners worldwide.

It specialises in forensics, corporate finance, debt, restructuring and pensions, delivering strategic solutions for its clients across a broad range of situations.

Analyst Peter Renton at the group’s NOMAD and broker Cenkos Securities, rates the company’s shares as a Buy.

He is going for the current year to end April 2023 to show £100.0m in revenues, £24.0m profits, 7.8p earnings and an increased dividend of 4.6p per share.

He has already pencilled in £105.0m revenues for 2024, with £25.2m of profits and just 7.6p earnings, but with a 4.9p dividend per share.

Over at Liberum Capital, their analyst James Allen also has a Buy out on the shares, with a price objective of 185p.

He states that the company is set to benefit from the withdrawal of government support for UK businesses.

He is quoted as saying that

“FRP has beaten on guidance in each of the last two financial years since coming to market, despite less-than-ideal market conditions.

We are excited to see what the business can deliver now that the government life support has been turned off for UK companies.”

With the group declaring that it has seen an increase in the level of enquiries for its restructuring services in recent months, Liberum consider that FRP could see its business double.

I look for a positive AGM Statement in a few weeks.

(15.02.21 @ 104p set a Target Price of 130p*)

Totally (LON:TLY) – this group gets fitter and fitter

This £80m group, which is a leading provider of frontline healthcare services, corporate fitness and wellbeing services across the UK and Ireland, will be holding its AGM on Monday 5 September.

It has been winning new contracts with regularity over the last nine months and looks certain to continue that trend going forward.

Analyst Ian Jermin at Allenby Capital is very positive about the group and its prospects.

For the year to end March 2023 he is estimating revenues of £140.0m (£127.4m), with adjusted pre-tax profits leaping up 54% to £5.7m (£3.7m), while earnings lift up to 3.00p (1.92p) and with a held dividend of 1.0p per share.

For 2024 he goes for £160.0m revenues, £7.9m profits, 4.16p earnings and 1.1p dividend per share.

In the 2025 year, Jermin has estimates for £174.4, sales, £8.3m profits, 4.35p earnings and a 1.2p dividend per share.

Understandably, he has a ‘fair value‘ of 75p on the shares, which closed on Friday night at only 42p.

At that level, ahead of a positive AGM Statement, I do think that they could now be ready for another run up to over the 50p hurdle.

(Profile 12.03.20 @ 12p set a Target Price of 18p*)

(Profile 25.06.21 @ 38.5p set a Target Price of 50p)

Galliford Try Holdings (LON:GFRD) – good figures to come this time next month

This UK construction group will be reporting its annual results, for the year to end 30 June, on Wednesday 21 September.

Considering the recently announced strength of its peer Balfour Beatty shown in its Interim results, it would appear that the sector is doing very well and Galliford should be a beneficiary.

Over a month ago the group declared in its Trading Update that it had seen continued strong performance across its operations resulting in increased revenue, pre-exceptional profit and operating margin.

Clearly it stated that full year pre-exceptional profit before tax is expected to be at the upper end of current analyst forecasts.

Furthermore, it was continuing to see encouraging progress against its group margin improvement targets.

As far as the current year’s trading the group is actively maintaining close engagement with its supply chain and clients.

Through careful management it has mitigated the risks of material shortages and inflation, without any overall impact on its financial performance.

The group’s strategy and continuing investment in modern construction practices, digitalisation and off-site build, should help to ensure a high-quality service for its customers, as well as helping further improve its operational performance.

With a £3.4bn order book and a strong pipeline of future orders it is already some 90% of revenue booked for the current year.

With its shares at 166p, the group is valued at around £182m, yet it has an average cash position of £170m, some £48m of Public/Private Partnership assets and no pension liabilities – this group looks very strong indeed.

I also consider that its shares are significantly undervalued trading on less than 10 times current year estimated earnings.

In the last year the shares have been up to 213p and my current Target Price is even higher than that. Hold very tight.

(Profile 02.02.22 @ 178p set a Target Price of 220p)

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


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