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  • Writer's pictureMark Watson-Mitchell

Two Global Winners – GPH and UPGS

Global Ports Holding (LON:GPH) – up 243% in seven months

This Istanbul, Turkey-based group really is a global player.

The company is the world's largest cruise port operator with an established presence in the Caribbean, Mediterranean, and in the Asia-Pacific regions, including extensive commercial port operations in Montenegro.

According to Cruise Industry News, by the end of 2027, passenger capacity in the cruise industry is forecast to grow to over 40m, a growth rate of 45% from pre-Covid levels.

That growth will certainly prove to be a significant driver for this expanding group.

It is engaged in the operation of ports in Turkey, Montenegro, Puerto Rico, Canada, Malta, Spain, Bahamas, St Lucia, Antigua and Barbuda, Italy, and Croatia.

It has two main segments, Commercial and Cruise Business.

The company operates cruise ports for serving cruise liners, ferries, and mega-yachts, as well as for individual passengers.

Its commercial port operations specialise in container, bulk, and general cargo handling activities; together with storage business and also offering marine services.

It is a 63.2% owned subsidiary of the Istanbul-quoted Global Investment Holdings (BIST:GLYHO).

Today GPH operates 27 cruise ports in 14 countries and continues to grow steadily.

GPH provides services for over 15m passengers, reaching a market share of 29% in the Mediterranean annually.

The scheduled launch of new cruise ships in the year ahead means the number of available berths across the global cruise fleet will reach all-time highs in 2024, and when combined with industry occupancy rates reaching pre-Covid-19 levels, the industry will be propelled to exciting new highs.

Industry booking patterns have been rebuilt to market norms over the last 12 months, and all major cruise lines have reported record booking trends for 2023.

Looking further into the future, long-established demand and supply trends in the cruise industry have re-established themselves as key drivers of cruise industry growth.

The medium to long-term demand trends have been largely unaffected by Covid-19.

The growing appetite for leisure travel, if anything, has perhaps been increased by Covid-19.

The introduction of so many new classes of cruise ships in such a short time reflects the industry's drive to continue attracting new customers.

Research analyst Greg Johnson at the group’s broker Shore Capital has been impressed by the company’s extension of its contract for Ege Port Kusadasi, a key port on the eastern coast of Turkey.

He now has put out a run-off-based fair value on the group’s shares at 430p, an increase of 60p on previous estimates.

For the year to end March he has predicted revenues of $117.7m ($40.3m) and a major turnaround in the group’s profits, from a loss of $43.4m in 2022, to a $1.7m adjusted pre-tax profit.

For this current year he goes for a $154.9m turnover helping to kick in a twelve-fold increase in profits to $20.5m, worth 14.6c (1.1c loss) in earnings per share.

We should be getting the full results out next month, in the meantime I see the shares rising from Friday’s closing level of 196.5p, expecting an early break above the 200p-220p price range.

(Profile 11.11.22 @ 81.5p set a Target Price of 100p*)

UP Global Sourcing Holdings (LON:UPGS) – now up 76.5% and with another 25% to go for this year

This Oldham-based group supplies its branded homeware products in the UK and globally.

It is believed that, according to market research, nearly 80% of UK households have at least one of this group’s products.

The company offers a range of durable household products, including vacuum cleaners, food prep, storage solutions, and airers, as well as fans, heaters, and electric fires under the Beldray Brand.

Under the Salter brand it also offers kitchenware products; with audio products under the Intempo brand; non-electrical kitchen and laundry products under the Russell Hobbs brand; and travel luggage and accessories under constellation and ZFrame brand.

The company provides floorcare, healthy living, and party appliances under the PROlectrix brand; bone China kitchenware products under the Portobello brand; pillows, duvets, mattress, protectors, and toppers under the Dreamtime brand; and bakeware, cookware, and textile products under the George Wilkinson brand.

In addition, the company offers party and kitchen products under Giles and Posner brand; kitchenware products under American Originals and Progress brand; and laundry and floorcare products under the Kleeneze brand.

As well as online, Ultimate Products sells to over 300 retailers across 38 countries and specialises in five product categories: Small Domestic Appliances; Housewares; Laundry; Audio; and Heating and Cooling.

The group's products are sold to a broad cross-section of both large national and international multi-channel retailers as well as smaller national retail chains, incorporating discount retailers, supermarkets, general retailers and online retailers.

The group is expected to declare a Pre-Close Trading Update on 15th August, that is for the year to the end of July, which we already expect to be showing results in line with market expectations.

Retail sector specialists Darren Shirley and Clive Black at Shore Capital believe that the shares at 132p substantially undervalue the group.

They are estimating that sales for the year to the end of next month will show through at around £166m (£154m), lifting adjusted pre-tax profits to £16.9m (£15.8m), with earnings of 14.6p (14.3p) and a dividend of 7.3p (7.1p) per share.

For the coming year they see £177m revenues, £18.4m profits, 15.5p earnings and a healthy 7.8p dividend.

Over at Equity Development, analysts Chris Wickham and Hannah Crowe are equally bullish about the group, putting out a 250p a share ‘fair value’ on the stock.

On just twelve times historic earnings after the 2023 results the shares would be trading at over 175p, and even then, they would still be yielding an attractive 4.3%.

These shares are going higher.

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

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


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