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  • Writer's pictureMark Watson-Mitchell

Take a look at CNIC, EOG, IOG, BMS, GETB and K3C

CentralNic Group (LON:CNIC) – the corporate expansion continues to make the shares even more attractive

In a very interesting move, this digital advertising and domain name management group has acquired Germany’s largest provider of product comparison websites.

The €60m deal will be funded by way of an equity raise of £42m @ 120p a share, a £3m Open Offer, and a €21m bond issue. All of which were done and dusted first thing on Monday morning of this week.

The City obviously liked what it saw because after dipping to 123p at one stage the shares closed that night unchanged at 132p. Yesterday they touched 137.5p before closing at 136.25p with some 605,000 shares traded.

Don’t underestimate the onward push that this group is making. It is really quite dynamic and it is estimated that its cashflow will see quite an improvement this year.

Bob Liao, analyst at Zeus Capital, is looking for revenues to end December to rise from $410.5m to $516.1m, with its EBITDA increasing by almost a third from $46.3m to $60.3m.

I remain extremely bullish about the prospects for this group and consider that its shares have a lot further to climb in the next year or so.

(Profile 12.07.21 @ 89p set a Target Price of 110p*)

Europa Oil & Gas (Holdings) (LON:EOG) – beginning to bubble away

In just over a month the shares of this East Midlands oil and gas properties group have more than doubled.

I am delighted with that performance to date, having moved up from 1.57p to 3.7p at one stage yesterday morning, before closing at 3.1p last night.

Markets need activity and there has certainly been some action with this sub-£20m capitalised exploration, development and production company.

Apart from its West Firsby and its Crosby Warren fields interests in the East Midlands, it also has a 65% stake in the Whisby-4 oilfields in that area too.

Further areas in which it has exploration possibilities are in Ireland and Morocco.

The recent daily average dealing volume has risen to just under 3m shares, however yesterday the activity was impressive, with some 9m traded.

Obviously, others consider that the group is in the right place at the right time and that its shares offer some significant upside.

(Profile 24.01.22 @ 1.57p set a Target Price of 2.25p*)

IOG (LON:IOG) – about to start a busy news month and going higher

Also in the right place at the right time, is a way to describe this Net Zero UK gas and infrastructure operator.

However, it has endured some rig safety hassles over the last couple of months with its Saturn Banks facility.

This week could well be seeing the start of its ‘backgassing’ programme, with the ‘First Gas’ due from both its Blythe and Elgood resources possible before the end of next week.

That could quickly become apparent by any strengthening in the group’s share price, currently 34.5p.

Despite the excellent price performance to date, I reckon that the shares offer even more scope for a further rise, with 50p being an easy target at which to aim on any good news items being published.

This month should see quite a few corporate announcements, thereby offering scope for the shares to react even more positively.

(Profile 06.09.21 @ 22.5p set a Target Price of 30p*)

Braemar Shipping Services (LON:BMS) – a very useful and strategic disposal

It was pleasing to see the shares of this undervalued shipbroking, investment, chartering and risk management services group moving better yesterday.

Closing at 248p, up 10p on the day, the positive gain was in reaction to news that it has now completed the disposal of its Cory Brothers logistics interest for between £10.25m to £15.5m by way of earn-out.

James Gundy, CEO, stated that:

The disposal of Cory is the last key step in the execution of our stated strategy of refocusing Braemar on our shipbroking core and I am pleased that the buyers of Cory are a long-term strategic partner. We look forward to continuing to work with them under their new ownership and seeing the business thrive.”

The proceeds, as they come in, will be used to strengthen the balance sheet by reducing its net debt.

At the start of February, the group reported that the strong trading seen in the first half of the financial year had continued and that revenues for the year ended 28 February 2022 were now expected to be not less than £101m (2021: £84m). And that is without counting in Cory’s figures.

The group expects underlying operating profit for the year to be circa £9.8m (£7.7m).

The shares, which have been up to 323p in the last year, are lagging well below the ratings of its peers and merit a rise through the 300p level, relatively soon.

(Profile 05.12.19 @ 185p set a Target Price of 250p*)

(Profile 20.05.20 @ 99p set a Target Price of 150p*)

GetBusy (LON:GETB) – losses building up as the group develops its ARR

This near £35m technology group provides productivity software for professional and financial services company clients.

Yesterday it announced its results for the year to end December 2021. They showed a 9% rise in revenues to £15.4m (£14.2m) and a 32% increased pre-tax loss at £1.2m (£0.9m).

So, no surprises there then, we were already expecting similar numbers. It was in fact a good set of results with expectations of a sales rise this year to about £17m together with an increased loss of about £1.3m.

It has about £2.7m of net cash to help these development costs, as well as an unused £2m facility.

It will probably be loss-making for a few more years yet, but what stands out to me is that £14.3m, some 93%, of its revenues last year were recurring. And you know how much I like ARR.

Analyst William Larwood at Liberum Capital has a ‘buy’ rating on the shares, looking for 130p, against the 58.5p at which they closed last night. There were four times the daily average dealt yesterday.

This is a slow but steady build and I suggest holding tightly to your shares.

Having hit 112p in the last year I consider that they are ready to go higher again.

(Profile 05.05.20 @ 60p set a Target Price of 75p*)

(Profile 11.02.22 @ 68p set a Target Price of 85p)

K3 Capital Group (LON:K3C) – latest acquisition strengthens shares

Yesterday this small cap mergers and acquisitions business declared its latest purchase.

It has taken over professional services marketing agency, JE Consulting, for an initial £2.32m plus a £2.25m ‘earn-out’.

It looks to be an excellent fit in with the group’s expansion strategy. Both Canaccord Genuity and finnCap rate it as an attractive deal.

Last year JE had £1.5m revenues, most of which were annually recurring, and had an EBITDA of £0.4m. It is an earnings-enhancing move.

Canaccord Genuity have a 414p price objective, while finnCap goes for 477p – the shares closed last night at 305p, up 15p on the announcement.

Hold very tight.

(Profile 21.10.20 @ 147.5p set a Target Price of 200p*)

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


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