A bullish ‘small-cap’ look at MPAC, CAU, NWOR, AVG, RPS, RST and IDOX
MPAC Group (LON:MPAC) – excellent results pushes its shares higher
This global packaging and automation solutions group declared its 2021 finals yesterday.
They showed that sales were up 13% at £94.3m (£83.7m) and underlying pre-tax profits were an excellent 36% better at £8.6m (£6.3m), generating adjusted earnings of some 39.7p (31.4p) per share.
The group’s order intake was £117.9m, up from £83.9m in 2020. The end-year closing order book was standing at £78.4m against £55.5m previously.
Those figures exceeded market expectations, reflecting the strong progress made during the year.
What is more, it looks as though that strength is continuing into this current year.
Its expansion strategy has worked well so far, and I see that progressing well into the future.
It had £14.5m cash at year-end, as well as facilities and management enough to push both its organic and its acquisition programme.
At the same time, I also see it expanding its product offering and its global reach.
Some 92% of its revenues are generated internationally as it sells into the food and beverage, clean energy and healthcare markets.
It has top name clients, such as GlaxoSmithKline, Procter & Gamble, Unilever, Diageo, AstraZeneca, Johnson & Johnson, 3M and Nestle.
Analysts Robin Speakman and Akhil Patel, at Shore Capital, are estimating £105m sales this year, a slight improvement in profits to £8.8m and an easing in earnings of 34.5p per share.
For next year they see £113m revenues, £9.6m profits and 37.1p earnings per share.
On the news the group’s shares put on a healthy 13% gain to 525p, now well over double my price aim.
I should also remind readers that analysts Mike Jeremy and Hannah Cro at Equity Development, who were early fans of this group, have a ‘fair value’ for its shares of 660p.
This company, despite global hassles, has done well to date and I see the performance improving over the next couple of years or so.
(Profile 19.12.19 @ 182p set a Target Price of 235p*)
Avingtrans (LON:AVG) – nuclear potential
Although the announcement of a couple of contract wins for two of its subsidiary interests did not alter current-year estimates, this group saw its shares up 4% yesterday, closing at 427.5p.
Analyst David Buxton, at brokers finnCap, currently has a price objective of 495p on its shares.
He noted that the shares have been solid performers in current weak markets,
highlighting the group’s defensive qualities, as well as its nuclear engineering interests.
The current year, to end May, could see £101.3m of revenues and £7.9m adjusted pre-tax profits, worth 22.6p per share in earnings and a miniscule 4.2p dividend per share.
For the coming year he estimates £110m of revenues, £9.6m profits, 25.3p earnings and a 4.4p dividend.
Hold on for Buxton’s price aim being scored.
(Profile 04.11.20 @ 260p set a Target Price of 325p*)
National World (LON:NWOR) – organic growth this year, while sussing out further deals
This group is creating a new platform for news publishing by implementing a new model powered by ‘state of the art’ technology.
It is seeking to digitise and monetise its relevant and unique content for both the local and national markets. And doing so across multiple brands and platforms.
Its major corporate move was made early last year when it acquired the JPI Media Publishing group.
Yesterday it reported its figures for the year to 1 January 2022, showing a revenue of £86m and a pre-tax profit of £8.6m, worth 3.7p in earnings per share.
Expectations are that the continuing investment in its operating model will see gently lower profits this year of £8.1m and earnings of 2.3p per share.
Analysts Paul Richards and Brendan D’Souza, at Dowgate Capital, see £88m sales next year and £8.9m profits, worth 2.4p per share in earnings.
They rate the shares as a ‘buy’, with a price objective of 55p.
They touched 42.25p at one stage last year, but last night the shares closed at 28.5p, up over 4% on the day.
Considering that boss David Montgomery and his crew have only just started on their ‘buy and build’ programme, I consider that this group’s shares have a great deal of upside potential.
There are so many acquisition possibilities within this media sector and these guys know just how to expand their group – they have done it before and successfully sold off the results.
(Profile 17.05.21 @ 18.5p set a Target Price of 25p*)
IDOX (LON:IDOX) – ready to ‘fly’
At yesterday’s AGM, for this information management software and solutions group, the CEO David Meaden told shareholders that progress is being made.
He noted that the group was performing well up to expectations in its first half.
“We are well-positioned to accelerate the 'fly' phase of our journey. The group is making good progress against its plans for 2022 and anticipates delivering further growth over the medium term."
Analysts Ian Robertson and Gareth Evans, at Progressive Equity Research, are estimating the current year to end October could see revenues increasing from £62.2m to £70.2m, with adjusted pre-tax profits increasing from £12.4m to £14.6m, giving earnings of 2.6p (2.4p) per share.
In the last year the group’s shares have been up to 82p, they closed last night at 66p.
A good hold.
(Profile 30.04.20 @ 38.5p set a Target Price of 50p*)
Restore (LON:RST) – further growth expected this year and next
This group is seen as the UK’s leading provider of digital and information management and secure lifecycle services.
The year to end December 2021 saw it report a 28% rise in revenues to £234.3m and a 64% improvement in adjusted pre-tax profits at £38.1m. Earnings came out at 8.7p, showing an incredible 4,250% increase on the year, and still covering a useful 7.2p (nil) dividend per share.
Strong organic growth together with the boost of eight successful acquisitions certainly drove record results to the bottom line.
It would appear that the 2021 momentum has carried on into the current year, with improving margins and sales.
Furthermore, it seems that further acquisitions are being progressed too.
Charles Bligh, the group CEO, is confident of further success this year and beyond.
The group’s shares closed up last night at 450p, but still 138p below their High within the last year.
(Profile 16.09.20 @ 335p set a Target Price of 420p*)
RPS Group (LON:RPS) – very positive outlook from this robust margin improving growth group
The shares of this global professional services group have been up as high as 132p in the last year or so.
They are now just 108.5p and I reckon that they justify a much higher pricing in the market.
Analyst Joe Brent, at Liberum Capital, rates the shares as a ‘buy’ having set a price objective of 140p.
Last Wednesday the company reported the year to end 2021 showed revenues of £476.1m (£457.3m), adjusted pre-tax profits of £21.5m (£13.4m), earnings of 5.61p (4.29p) and a dividend of only 0.7p per share.
For this year Brent is going for £496m sales, £25.2m profits, 6.59p earnings and a 1.32p dividend.
Then over the coming two years, 2023 and 2024, he sees £511m then £531m sales, £27.5m then £32.3m profits, 7.02p then 8.00p earnings and 1.97p then 2.40p of dividends per share respectively.
Nice steady growth that justifies a much better rating, in my very humble view.
Hold very tightly indeed.
(Profile 05.05.21 @ 88p set a Target Price of 110p*)
Centaur Media (LON:CAU) – conservative broker’s estimates offer investors further scope for price advancement
Providing business intelligence, training and consultancy services has seen this group do well in the 2021 trading year.
Revenues were up 21% from £32.4m to £39.1m, adjusted pre-tax profits came through at £3.0m (£0.3m loss), generating earnings of 1.9p and a paying a 1.0p dividend per share.
Analyst Caspar Erskine at Singer Capital Markets makes the shares a ‘buy’, while giving out a price objective of 85p.
He sees £42.1m of sales this year, £4.3m profits, 2.3p earnings and a continuing 1.0p per share dividend.
Within a couple of years or so this group could be reporting £50m of sales and over £7.5m profits, worth 3.5p in earnings.
Erskine is right, these shares are heading a lot higher.
Now at only 48p they offer holders even more upside.
(Profile 03.03.21 @ 33p set a Target Price of 41p*
(Asterisks * denote that Target Prices have been achieved since Profile publication)