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  • Writer's pictureMark Watson-Mitchell

Solid State, Ultimate Products And More

Solid State (LON:SOLI) – A Strong First Half Statement


Monday morning’s Trading Update, from this computing, power and communications products group, reported a strong first half to end September.


Revenues were £88.0m (£59.4m) while adjusted pre-tax profits were at least £7.0m (£4.2m) – showing impressive advances in both.


It was interesting to note that the group’s Interim stage Order Book was only £99.7m, down from £112.5m at the same time last year, but with 60% expected to be cleared in the second half.


However, as a result of the strong start to the year, on a full-year basis, the Directors expect to deliver stronger than anticipated organic revenue growth, meaning the group is expected to be marginally ahead of current consensus revenue and adjusted PBT expectations for the year ending 31 March 2024.


Analyst David Buxton, at brokers Cavendish Capital, has a very firm Price Objective on the group’s shares set at 1620p.


He is looking for the 2024 sales to have risen to £155.5m (£126.5m), with adjusted pre-tax profits of £12.5m (£10.8m), lifting earnings up to 85.4p (80.7p) per share, while tickling the dividend just 1p higher to 21p.


Over at WH Ireland, their analysts John Cumins and Charlie Cullen have a ‘fair value estimate’ of 1550p on the shares.


Encouraged by the positive H1 Trading Update, they have estimates for £155.1m sales and £12.5m profits, worth 85.1p in earnings.


Last night the group’s shares closed up another 50p at 1215p, almost 5% better on the day.


Hold tight.


(Profile 15.08.21 @ 404p set a Target Price of 546p*)


UP Global Sourcing Holdings (LON:UPGS) – Could Name Change Mark A Gear Change?


This group, which is a consumer homeware products wholesaler, with brands such as Salter, Beldray, Progress, Petra, Kleeneze and Intempo within its portfolio, has now changed its name to Ultimate Products (LON:ULTP).


The results for the year to end July 2023 reported a record revenue of £166.3m (£154.2m), of which online revenue was 64% better at £41.4m (£25.3m).


Adjusted pre-tax profits were 6% better at £16.8m (£15.8m), while earnings were 4% higher at 15.4p (14.7p) per share, with the dividend 4% up at 7.38p (7.12p) per share.

CEO Simon Showman stated that:


“I am delighted to report a record financial performance for Ultimate Products in FY23.

This is a fantastic achievement for our business, particularly given the tough macroeconomic backdrop.


Our homeware brands and products are used by households on a daily basis, and we have worked extremely hard to make sure that we maintain affordable prices for all consumers. We are hugely proud that we have achieved this despite persistent cost inflation.


Our online business was a standout performer in FY23, particularly in the UK. I am confident that the experience we have gained in optimising this part of our business will be hugely valuable as we continue scaling our European ecommerce business, where sales are already growing strongly.


In addition, we are confident that our recently opened Paris showroom will help us attract new retail customers in the French market, as well as across the wider European continent.”


Analysts Nigel Parson and Michael Clifton, at Cavendish Capital, have current year estimates to end July 2024 for £177.9m (£166.3m) sales, adjusted pre-tax profits of £18.8m (£16.8m), earnings of 16.3p (15.1p) and a dividend of 8.1p (7.4p) per share.


At Shore Capital its analysts, Clive Black and Darren Shirley, have a Price Objective of 210p out on the group’s shares, which closed last night 5.26% better at 120p, up 6p on the day.


At Shore Capital, its analysts Clive Black and Darren Shirley, consider that the group is a high-class firm on a too-low FY24 PER of 7.3x.


They are looking for £177m sales, £18.4m profits, 15.6p earnings and a 7.8p dividend per share.


Over at Equity Development its analysts Chris Wickham and Hannah Crowe look for current year sales of £176.3m, profits of £18.1m, earnings of 15.42p and a 7.71p dividend per share.


Their ‘fair value estimate’ on the shares is 250p, more than twice last night’s price.


Hold.


(Profile 13.07.20 @ 74.8p set a Target Price of 100p*)


Sanderson Design Group (LON:SDG) – Quality Totally Undervalued


A brand-new range of tableware and kitchenware accessories based on Sanderson’s fabric designs for the National Trust Collection is the target of a new licensing agreement by the group with Habitat.


The Sainsbury’s-owned Habitat retail group will be using the very successful Sanderson fabric National Trust designs on its new mugs, dinnerware, tablecloths, napkins, place mats, tea towels, aprons and many other products, all of which will carry the National Trust, Sanderson and the Habitat brands.


The new range will not be in the shops until 2025.


This luxury interior furnishings company designs, manufactures and markets wallpapers, fabrics and paints.


It also derives licensing income from the use of its designs on a wide range of products such as bed and bath collections, rugs, blinds and tableware.


Analyst Matthew McEachran at Singer Capital Markets rates the group’s shares as a Buy, looking for 204p as his Price Objective.


His estimates for this year to end January 2024, are for sales of £109.9m (£112.0m) and adjusted pre-tax profits of £12.0m (£12.6m), with lower earnings at 12.8p (14.3p) and a maintained dividend of 3.5p per share.


For next year he goes for £114.1m revenues, £13.0m profits, 13.5p earnings and a 3.69p dividend per share.


I really like this £76m capitalised group, whose shares and earnings may not look too exciting to most investors, but it is ‘undervalued quality with potential’


as well as boasting some £17m end year cash in its balance sheet.


They closed last night at just 106p, stay firm with holdings, they will go higher.


(Profile 24.04.23 @ 135p set a Target Price of 168p)


Premier Foods (LON:PFD) – Every Home Has One


This company is one of the UK’s largest food businesses, employing over 4,000 people operating from 15 sites across the country.


It supplies a range of retail, wholesale, foodservice and other customers with its iconic brands (such as Bisto, Bachelors, Ambrosia, Oxo, Sharwoods and Mr Kipling) which feature in millions of homes every day.


Earlier this week, for £34m it acquired FUEL10K, which is a protein enriched breakfast brand of granola, oats and drinks products.


CEO Alex Whitehouse stated that:


“The acquisition of FUEL10K follows on from our successful integration of The Spice Tailor, where we have increased revenue and profit through the application of our branded growth model.


FUEL10K provides us with an ideal platform to accelerate our expansion into the Breakfast category, building on our recent successful launch of Ambrosia porridge pots.


Possessing a differentiated category position, with its protein enriched product range and appealing to a younger demographic, we expect to deliver significant further profitable growth of FUEL10K through the deployment of our successful branded growth model.”


Analysts Clive Black and Darren Shirley at Shore Capital consider that the group’s shares are materially mis-rated.


They are estimating that the current year to end March 2024 will see sales rise to £1.07bn (£1.01bn), lifting adjusted pre-tax profits to £145.4m (£137.2m) generating earnings of 12.4p (12.6p), while raising its dividend to 1.7p (1.4p) per share.


For next year they estimate £1.10bn revenues, £156.1m profits, 13.3p earnings and a 2.1p dividend.


Analyst Andrew Wade at Jefferies rates the group’s shares as a Buy, looking for 175p a share.


I would guess that every house in the country has a Premier Foods brand product somewhere in the kitchen cupboards.


They closed last night at 117.5p, capitalising the group at only £1.05bn.


This group’s shares should be trading at least 30% higher, in my view, so hold tight.


(Profile 29.06.20 @ 67.5p set a Target Price of 101p*)


And Finally ……


I have to apologise to my readers, I headlined Monday’s article that Aston Martin Lagonda Global Holdings (LON:AML)would be announcing its Q3 results on Tuesday.

Totally my error, I was a day too early, however, if readers followed my words and acted thereafter, then they would be up 2.5%, a few pence up ahead of the 1st November results announcement, with the shares ending the day up 3p at 218.5p.


(Profile 10.05.23 @ 213.5p set a Target Price of 265p*)

(Profile 30.10.23 @ 213p set a Target Price of 275p)


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

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