Taking a ‘Small-Cap’ look at PIER, CAPD, JNEO and BAG
The Brighton Pier Group (LON:PIER) – excellent half-time figures point to further growth
Monday’s announcement of this group’s interims for the six months to end December showed that the diversified entertainment business was going great guns in its first half year.
Revenues for the current year, to end June, are now expected to grow from £13.5m to £38.1m, with adjusted pre-tax profits quadrupling from £1.5m to £6.0m.
Analyst Peter Renton at the group’s brokers Cenkos Securities estimates that it will make 12.6p in earnings per share, up from 5.7p. He has a ‘buy’ out on the shares.
Anne Ackord, CEO, stated that
“Looking forward, we expect the sales trends to continue, benefiting also from the opportunistic Lightwater Valley acquisition. We believe our asset-backed group is well placed to record an excellent result for the full-year and beyond."
The group’s shares touched 96p at one stage after the interims were published, but last night closed at just 89p, at which level I consider that they are still very attractive.
I now see them heading up to trade the 110p to 120p range fairly soon.
Remember that Luke Johnson’s group is still looking at making more acquisitions, so expect more excitement over the next few months.
(Profile 30.06.21 @ 61p set a Target Price of 75p*)
Capital Limited (LON:CAPD) – scored my first ‘hat trick’
Yesterday Tamesis Partners issued a Post Result Update note on this mining services group. Their analysts have maintained their positivity about the group’s prospects.
Furthermore, they confidently rate the shares as being undervalued, having set a price objective on the shares of 160p, that upside offers an excellent 60% plus to go for – the shares last night closed at just 100.5p.
Tamesis points to this current year being another record in anticipated revenue terms, which will have more than doubled since 2020.
They note that all elements of the group’s business are growing strongly.
It has been a bit of a slog getting the shares over the 100p mark, which they eventually did last Thursday, hitting 103p at their best.
That actually means that, for the first time, I have scored a ‘hat trick’ in having targeted the group’s shares to break the 100p level, subsequent to my three main profiles on the company.
Holders should stay with the shares, hoping that the Tamesis price aim will help to drive them even higher.
(Profile 23.07.19 @ 48p set a Target Price of 76p*)
(Profile 22.10.19 @ 61p set a Target Price of 100p*)
(Profile 03.08.20 @ 77.5p set a Target Price of 100p*)
Journeo (LON:JNEO) – new contracts still rolling in
This little company, capitalised at under £10m, is a leading provider of transport information systems.
Its shares, in my opinion, could well double within the next year or so.
This week it has released its results for the 2021 trading year.
They showed a 15% increase in revenues to £15.6m, while underlying pre-tax profits grew 37% to £0.6m, generating almost doubled earnings of 4.46p per share (2.26p).
Cenkos Securities analyst Peter Renton rates the group’s shares as a ‘buy’ giving them a ‘fair value’ of 232p.
He is looking for revenues to rise to £18.0m this year and then £21.6m in 2023.
His adjusted pre-tax profits estimates are for £1.2m this year, then £1.8m next year.
On a basic reported earnings per share basis, he goes for 10.4p in 2022 and 17.1p in 2023.
The market has yet to really take on board the potential for this tiny group, which has a strongly growing annual recurring revenue, which obviously excites me and is why I see the shares doubling.
In late September last year the group’s shares peaked at 138p, but are now only 101.5p.
They offer significant upside at the current price.
(Profile 07.04.21 @ 95.5p set a Target Price of 120p*)
AG Barr (LON:BAG) – there is quality in the BAG
IRN-BRU, Rubicon and Funkin drinks maker Barr reported that the 53 weeks to 30 January increased sales by 18.3% to £268.6m, while pre-tax profits were 26.5% better at £41.5m.
Earnings per share for the year were 46.1% ahead at 25.09p, with a 12.00p per share dividend being declared, to add to the 10p Special payment announced previously.
At the end of the period the group’s net cash had improved 36.8% at £68.4m.
This was a very resilient set of results, especially being recorded in the very difficult trading environment generally.
This company is a ‘class act’ that is never going to set the world alight, but instead showing good products, financial strength, together with very good management, its shares have great longer-term investor appeal.
The group’s CEO, Roger White, is sounding bullish -
"We enter the new financial year with good momentum and exciting brand and sales plans. Trading in the early weeks of the new financial year has been well ahead of the prior year and in line with our expectations.
"Like most companies, we are facing significant inflationary pressures, but we are well placed as a group to deal with these and will continue to seek to manage our exposure proactively through mitigating actions across revenue management, pricing, procurement and cost control.
"The growth potential of our business is underpinned by our growing brands, our highly capable people and our resilient infrastructure. We plan to invest further in all of these important areas and I remain confident in our ability to deliver continued growth in both revenue and profit in the coming year."
Obviously, the group will have ongoing cost hassles as it goes forward, however that does not change my view that its shares are a very good hold at around the current 542.5p.
They have been up to 590p within the last year and will, undoubtedly, be up there again within the next few months.
I was encouraged to see that the group’s finance director Stuart Lorimer was a buyer of 7,265 shares yesterday at an average 547.5p a share. I take that as a good signal of the group’s prospects.
(Profile 31.07.20 @ 444.5p set a Target Price of 525p*)
(Asterisks * denote that Target Prices have been achieved since Profile publication)