Small Cap catch-up: TLY, ALU, BRCK, STVG, JNEO, SCE and BLV
Totally (LON:TLY) – we will see you now
"We are pleased with the Group's performance over the past year as healthcare services continue to respond to increasing pressure,”
stated Chairman Bob Holt at last Monday’s AGM for frontline healthcare services group Totally. He went on to comment that:
"We continue to support the NHS with the management of significant levels of demand for urgent and elective care and are now preparing for a further busy winter period. Looking ahead, we see opportunities for growth but also face the same challenging operating environment as the NHS and other businesses in relation to staffing, recruitment and increasing costs.”
The market apparently took his comments on the bearish tack and marked the shares down 6.35p, a near 16% fall to 34.15p at one stage in reaction, on the back of a massive burst of trading volume.
They closed that night at 37.25p after nearly 5.0m shares were traded, which was easily the biggest turnover in the last year.
We are looking for £5.5m to £6.0m in the current year to end March 2023, worth around 3.3p per share in earnings, while paying a 1p dividend.
Going into next year a £15m leap to £141m in revenues could see £8.0m profits, worth 4.4p in earnings, but still paying a 1.0p dividend per share.
Holt is a very canny market player, insomuch as he underplays market hopes and generally over delivers in results.
I remain strongly in favour of the company, what it offers the NHS and others in the medical sector, while reckoning that its shares have a lot further to climb as investors begin to realise its growth potential.
Yesterday the dealing activity was lowered to just over 1.9m traded, with the shares closing at 37p after touching 38p during the day.
A very strong hold.
(Profile 12.03.20 @ 12p set a Target Price of 18p*)
(Profile 25.06.21 @ 38.5p set a Target Price of 50p)
The Alumasc Group (LON:ALU) – was ABC really that easy?
The finals to end June showed revenues up 14.9% at £89.4m and adjusted pre-tax profits up 27% at £12.7m, lifting earnings up to 28.6p (22.5p) and the dividend 5.3% higher at 10.0p per share.
The building materials company states that it is repositioned to focus on its strong brands, long-term customer relationships across diverse markets and organic and inorganic growth opportunities, supported by cost efficiencies.
And that despite the current uncertain macroeconomic outlook, the simplified business model, clear brands strategy and robust start to the current year, provides the group’s management with confidence in the future.
For the current year to end June 2023, analyst David Buxton at brokers finnCap estimates £91.0m sales and lower profits at £11.3m, worth 24.2p in earnings and paying 10.3p a share in dividend.
He has a maintained price objective on the shares at 315p each.
Well, the group does look slimmer now that the loss-making Levolux is out of the way.
The whole building materials sector remains tricky, but the business is still out there.
The shares closed last night at 165p, up 13p on the day.
Was it as simple as ABC as I predicted a couple of weeks ago when they were 134p?
(Profile 13.02.20 @ 116p set a Target Price of 145p*)
(Profile 08.06.20 @ 80p set a Target Price of 110p*)
Brickability Group (LON:BRCK) – offering upside
Yesterday’s AGM Statement was cautiously positive going forward.
Current year expectations to end March 2023 remain steady after strong trading during the summer, with hoped for EBITDA of £43m staying intact.
Chairman John Richards stated that:
"FY23 has seen the Group continue to execute on its growth strategy, with the acquisition of Modular Clay Products increasing the Group's presence in the specification sector and bringing new access to a range of European manufacturers, further boosting Brickability's brick import capabilities.
"Whilst the macro-economic conditions in the UK and Europe of high energy prices and inflation have been well publicised, the UK housebuilding market continues to be in structural deficit and housebuilding activity continues to be resilient. With that in mind the Group looks to the near future with cautious optimism.”
The group’s shares were fairly immobile at 83p, but still looking cheap for a run to 100p.
(Profile 16.04.20 @ 39p set a Target Price of 55p*)
STV Group (LON:STVG) – great viewing to further profits
The half-timers to end June from this ‘North of the Border’ media group showed revenues up 3% at £62.1m while interim profits were 6% better at £11.2m, earnings were 4% higher at 20.0p, even the dividend was 5% improved at 3.9p per share.
Analyst Roddy Davidson at brokers Shore Capital sees £153.3m (£144.5m) sales for the full year, £25.0m (£23.7m) pre-tax profits, earnings of 42.1p (41.0p) and a 12.5p (11.0p) dividend per share.
The growth will continue into 2023 and 2024, which I think helps to make the shares extremely attractive at the current lowly 287.5p, despite the 10.5p rise yesterday on its results.
(Profile 25.04.19 @ 370p set no Target Price)
(Profile 10.12.21 @ 345p set a Target Price of 425p)
Journeo (LON:JNEO) – see it, say it, then get sorted
This group, which provides tailored solutions for the transport community, is rated as a Buy by its brokers Cenkos Securities.
Their analyst Andrew Renton is looking for the current year to end December to see revenues increase from £15.6m to £18.0m, with pre-tax profits more than doubling to £0.9m (£0.4m) and earnings of 10.4p per share.
Next year sales of £21.6m are possible, while its pre-tax profits could improve to £1.5m, lifting earnings to a very impressive 17.1p per share.
After Monday’s Interim results to end June, the shares eased back in reaction.
The first half saw a record order intake of £12.9m, while the second half has started well with £4m orders already secured and the group remains confident that results for the full year will be in line with current market expectations.
The shares closed last night at 116p, some 7 times its forecast 2023 price-to-earnings ratio.
On the back of the Cenkos estimates, the shares are very good value and seem destined to rise well over the next year or so, especially as the group’s systems become ever more embedded in those of its customers.
(Profile 07.04.21 @ 95.5p set a Target Price of 120p*)
Surface Transforms (LON:SCE) – the brakes are being eased off
This little group is all about tomorrow and in the automotive industry that generally takes some time to come.
However, when it does arrive then the numbers could be quite dramatic.
The carbon fibre reinforced brake disc manufacturer has over the last few years been contracting with quite a number of major vehicle makers to incorporate its very special brakes into various of their future production lines.
It has been and will continue to be a long haul – but I am convinced that this group has mountains of potential.
The group’s prospective contract pipeline is worth some £400m.
This year, to end December, it could see its revenues leap from £2.4m to £13.0m, with £23.4m expected next year.
The losses are swinging around from £4.3m down last year now to breakeven for this year, progressing to a £2.4m estimated profit next year. It will be using its tax losses for another three/four years yet.
The estimate for 2024 is £33.5m sales revenue, £6.8m profits and 3.5p of earnings.
As its OEM’s list builds up, alongside its contract pipeline, I expect to see longer-term investors taking a stronger view on the shares, now at just 52.5p they are a cracking little gamble.
I see 100p in due course.
(Profile 19.09.19 @ 17p set a Target Price of 30p*)
(Profile 08.01.21 @ 50p set a Target Price of 65p*)
Belvoir Group (LON:BLV) – not for chasing
This property franchise group believes that its growth strategy is remaining on track.
The interims to end June reported a 12% increase in revenues to £15.4m but it saw its pre-tax profits fall nearly 17% to £4.0m, with earnings slipping from 9.9p to just 8.7p at the half-way stage.
Analyst Guy Hewett at brokers finnCap is still sounding confident that the group will cope with the reduction in activity after last year’s boom business.
His estimates are for revenues of £33.4m for the year (£29.6m), a pre-tax profit of £9.7m (£10.3m) and with a near 10% easing in earnings from 22.7p to 20.2p per share. His expectation is for an increase in the dividend to 9.0p (8.5p) per share.
For next year he sees a recovery in profitability to £10.8m on £37.4m sales, picking earnings up to 21.0p and a 9.5p dividend.
His price objective for the group’s shares is a massive 385p – which in my immediate view is a bit punchy for a while.
The shares closed last night 10p up at 228.5p, they are not for chasing.
(Profile 09.01.20 @ 141p set a Target Price of 175p*)
(Asterisks * denote Target Prices have been achieved since Profile Publication)