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  • Writer's pictureMark Watson-Mitchell

Small Cap Catch-up: Totally, Begbies and Wincanton

Totally (LON:TLY) – slowly, slowly, it will get there

On Monday morning this £42m capitalised frontline healthcare services group declared that it had secured contract extensions across a multiple of the services that it provides in the Midlands and in the North.

The urgent care service extensions are worth some £12m to the group, varying in length from six to twelve months.

They cover a range of urgent care services including NHS 111, GP Out of Hours and Clinical Assessment Services in Staffordshire, Yorkshire and Northumberland.

Importantly they underpin the market revenue expectations for the year ahead.

CEO Wendy Lawrence stated that:

"We have been providing NHS 111, GP OOH and CAS services across Staffordshire and the North-East for more than 10 years and I am delighted that we can continue to deliver these essential services.

Contract extensions make an important contribution to future revenue by securing the continuation of existing contracts beyond their original term.

This demonstrates the strength of our relationships with commissioners and the quality of services we deliver."

Analyst James Wood at Canaccord Genuity Capital Markets is bullish and rates the group’s shares as a Buy, with a price objective of 40p.

His estimates for the current year, to end March 2024, are for revenues of £144.2m (est £140.8m) but with adjusted pre-tax profits rising 66% to £6.3m (est £3.8m), taking earnings up to 3.5p (est 2.2p), while keeping its dividend steady at 1.0p per share.

After my last Profile on the group its shares reached 25p a week later.

Just a year ago they were trading at 48p and could slowly be heading up there again over the next few years.

Last night the group’s shares closed at 21.5p, at these levels they are an excellent purchase and could so easily have another 60% to go over the next year or so.

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

(Profile 21.04.23 @ 19.5p set a Target Price at 25p*)

Begbies Traynor Group (LON:BEG) – guiding higher

Well, it is good to know that someone is enjoying the current economic environment.

And this business recovery, financial advisory and property services consultancy group is certainly doing just that.

Earlier this week the company’s Pre-Close Trading Update guided the market that its trading year to end April 2023 was going to show better than expectation results.

It led investors to expect double-digit growth over the previous year, with revenues of at least 11% higher at £122m and a 16% improvement in adjusted pre-tax profits to some £20.7m.

Analysts Vivek Raja and Jamie Murray at Shore Capital Markets note that the guidance was 2% better than consensus hopes.

They have revenues estimated for the current year to end April 2024 of £129.3m, with profits of £22.5m, worth 10.6p in earnings and more than double covering an estimated 4.0p dividend per share.

For 2025 they see £136.9m sales, £24.4m profits, 11.3p earnings and a 4.2p dividend.

The shares, which have been up to 156p in the last year, closed last night at 131.5p, which is about right based on recent statements.

The full 2023 results should be published on 11th July, which may then give more confidence to the upward hopes for the £203m group’s shares.

(Profile 24.11.19 @ 85p set a Target Price at 110p*)

(Profile 21.04.20 @ 93p set a Target Price at 110p*)

Wincanton (LON:WIN) – disappointing to date but I keep hope

I really like this supply chain logistics group, but my latest Profile feature has proved useless to date.

A couple of days ago the company announced its results to end March this year.

They showed a 2.9% improvement in revenues to £1.46bn, while its underlying pre-tax profit was 6.9% better at £62.1m, generating a 4.2% increase in earnings at 42.5p and more than triple covering the 10% higher dividend at 13.2p per share.

CEO James Wroath commented that:

"Our strategy delivered a strong result in FY23 despite the prevailing macro-economic challenges, particularly with regard to retail volumes and inflation.

We continue to invest in technology as the route to deliver competitive advantage in the industry. Significant opportunities remain for warehouse automation across our Group, both in the foundation sectors and strategic growth markets.

Furthermore, our transport operations have had a shift in focus with technology at the heart of our new market proposition.”

Analyst Gerald Khoo at Liberum Capital rates the group’s shares as a Buy, with an objective of 390p on the shares.

For the current year to end March 2024 he goes for £1.436bn sales, £50.2m profits, worth 30.6p in earnings while increasing its dividend to 13.6p per share.

This £320m group, which counts Sainsbury’s, Waitrose, Halfords, Wickes and the Co-op amongst its thousands of customers, is expecting the current year to be difficult due to the economic challenges.

However, I hope that its Management has got its act together enough to push the group back upwards again.

As far as I am concerned Wincanton is a ‘class act’ that deserves a good rating, however shareholders deserve better results to justify their faith in the group’s shares, currently looking just that little bit stronger at 244p.

Patient investors should hold tight.

(Profile 07.05.19 @ 247p set a Target Price of 350p*)

(Profile 06.05.22 @ 412p set a Target Price of 500p)

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


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