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  • Writer's pictureMark Watson-Mitchell

STV Group, Gulf Marine Services and Strix Group


STV Group (LON:STVG) – waiting to view 2024



Tuesday morning will see the announcement of the end-December 2023 results from this media operator.


After a somewhat challenging year, I will not be too worried to see a fall in adjusted pre-tax profits from the £24.1m made in 2022, expected to be around £17.8m for last year.


It will be good to note that group revenues rose from £137.8m to an anticipated £165.5m for the year.


Earnings will have taken a big knock from 40.0p to some 26.4p in 2023, despite that the dividend will have been maintained at 11.3p (11.3p) per share.


Now estimates from analyst Roddy Davidson, at the group’s House Broker, Shore Capital, look for the current year to see an improvement in sales to £173.7m, with profits of £19.0m, earnings of 27.8p and a useful 12.0p per share dividend.


The current year Outlook statement from the Glasgow-based group, which is valued at around £93.5m, will be well-studied.


Even so I continue to believe that this company is being unduly lowly rated, especially with its shares at just 200p each, they were over 315p this time last year.


(Profile 10.12.21 @ 345p set a Target Price of 425p)

(Profile 05.02.24 @ 188.5p set a Target Price of 235p)


Gulf Marine Services (LON:GMS) – propelled and elevating


The good news keeps on coming from this Abu Dhabi-based provider of advanced self-propelled, self-elevating support vessels.


The group’s fleet of 13 vessels is the youngest in the sector, which is obviously very appealing to its customers within the oil, gas and renewable energy industries.


From its offices in the UAE, Saudi Arabia and Qatar, it services global client companies in the Middle East, South-East Asia, West Africa, North America, the Gulf of Mexico and Europe.


Last Wednesday the group announced a contract extension for one of its vessels now operating in the Middle East, while gaining a Letter of Award for another similarly operating vessel.


The two contracts span a combined 5.2 years and help to boost the group’s total backlog to a very healthy $373m, bringing about an upward guidance for the market.


There is a continuous demand for the group’s vessels, whilst it is evident that there is an ongoing improvement in day rates and backlog for the company. 


Analyst Daniel Slater at Zeus Capital is now expecting current year sales, to end 2024 of $167.7m (2023 est $151.7m), helping to generate $52.0m (est $27.3m) adjusted pre-tax profits, lifting earnings to 4.1c (2.0c est) per share.


I really like the massive potential for this £175m group and consider that its shares at just 17.25p offer strong upside prospects.


Zeus Capital has a value out on the shares of 25p each.


(Profile 30.11.23 @ 13p set a Target Price of 16p*)

(Profile 22.01.24 @ 15.95p set a Target Price of 19.50p)


Strix Group (LON:KETL) - come on Polly


This company is the global leader in the design, manufacture and supply of kettle safety controls as well as other complementary water temperature management components, appliances and water filtration products.


Globally its products are used over 1bn times a day, while as a group it has a 56% value share of the kettle controls market.


In 2023 it went off the boil.


Analysts who follow the company have recently reassessed their estimates for last year to end December and for this year too.


Demand in the kettle controls market in 2023 showed signs of cooling down quite a bit.


The group’s results are due to be published in three weeks (27th), which is when we will see just how it fared last year boosted by recent acquisitions and how it is expecting its business to be in the current year.


Analyst David O’Brien at Equity Development now has estimates out for the 2023 year to report revenues of around £147.1m (£106.9m) upon which the group could have made £21.2m of adjusted pre-tax profits, generating 9.1p earnings, enabling a 2.7p per share dividend.


For the current year he goes for £158.0m sales, £25.4m profits. 10.0p earnings and a dividend of 3.0p per share.


Equity Development has a valuation on the group’s shares at 149p.


Over at Zeus Capital their analyst Andy Hanson is looking for £151.0m sales for last year, £22.0m profits, 9.0p earnings and a 3.0p dividend per share.


This year he has estimated for £162.5m revenues, £26.6m profits, 10.3p earnings and a 3.1p dividend.


He sees another uplift next year to £173.5m, £30.1m, 11.4p and 3.5p respectively.


The shares, which hit 114p in May last year, closed on Friday night at just 67.60p, capitalising the whole group at only £153.1m.


Based on the above analysts’ estimates, prior to the imminent results declaration, I am now setting a new Target Price of 82p.


(Profile 31.12.19 @ 196p set a Target Price of 250p*)

(Profile 04.03.24 @ 67.60p set a new Target Price of 82p)

 

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

 

 

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