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Hi semiret. Indeed - with 4.9p EPS forecast this year you'd expect a 60p-65p target to be more appropriate at this stage. And with net debt reducing fast hopefully further acquisitions will be on the cards to further enhance earnings.
Thank you for all your insights/updates Rivaldo, a keen follower and a holder here.
The footnote of the Master Investor feature states; "Profile 14.01.20 @ 36p set an end-2020 Target Price of 50p."
Do you think the end of year target price is understated?
Very kind regards
Master Investor feature SUR as follows in their latest round-up - it seems Shore Capital are now going for 4.9p EPS this year, so SUR really do still look pretty cheap:
Https://masterinvestor.co.uk/equities/small-cap-round-up-featuring-sureserve-inland-homes-medica-and-more/?utm_source=Daily+Bulletin&utm_campaign=ce4bb56cd8-Daily_Bulletin_20200124&utm_medium=email&utm_term=0_25eff0bb7f-ce4bb56cd8-34898813
"Sureserve Group (LON:SUR) – very quick price rise on good results
An 11.1% rise in revenue to £212m for the year to end-September 2019 helped to boost adjusted pre-tax profits by 25.7% to £8.3m, with earnings leaping 31.2% to 4.2p per share.
Those were impressive results and I understand that the current year has started strongly.
Brokers Shore Capital estimate that revenue will increase by £12.6m this year, with profits up nearly 15% to £9.5m, jacking earnings up nearly 17% to 4.9p per share.
The shares have had a very good quick run, peaking at 47p last Tuesday, and close the week at around the 44.5p level, just over 9 times current year earnings.
Looking really quite cheap but allow for some profit-taking."
Big buying this morning, with 650,000 shares bought at 45p in five transactions. And moving up now - perhaps a seller has been cleared.
And here's a new interview with the Executive Chairman, Bob_Holt, discussing the turnaround being delivered at Sureserve:
Https://tinyurl.com/v5eoyq9
He's very positive, and notes that they should be debt-free this year and have great potential in a number of areas.
Good coverage here, including brief commentary from Shore Capital:
Https://www.cityam.com/energy-services-firm-sureserve-enjoys-rising-profit-as-demand-increases-in-core-markets/
"Energy services firm Sureserve enjoys rising profit as demand increases in core markets
Sureserve enjoyed a rise in core profits of more than one-quarter last year, as demand grew in its two core compliance and energy services markets.
The Aim-listed company maintains and installs boilers, and makes sure homes are energy efficient among other services
Profit excluding exceptional items rose 26 per cent to £8.3m in the 12 months to September, reflecting “improved operational efficiency,” according to chief executive Bob Holt.
It comes after Sureserve sold off its construction and property services arms in a bid to become more efficient.
The company doubled its dividend to shareholders to 0.5p a share.
“I am pleased to report an excellent year of both operational progress and improved financial performance, with our results exceeding market and internal targets,” said chair Bob Holt.
“The focus on driving growth within our core divisions of compliance and energy services has paid dividends, yielding strong increases in group revenue and profit, while at the same time continuing to reduce our debt and improve our cash conversion.”
Sureserve said an increase in energy efficiency standards for social housing, as well as high fire safety standards in homes had helped drive demand. The latter is thought to be a direct result of the Grenfell Tower fire in 2017.
Analysts at Shore Capital Markets said its energy services division has “opportunities in large national and regional schemes to tackle fuel poverty”.
The firm added that trading in the current financial year has started well.
Sureserve’s £333.2m order book covers about 72 per cent of revenue, while it has maintenance contracts in place worth £409.6m.
Holt added: “”The group’s outlook remains positive and we are confident of continuing to deliver on our clearly-defined growth strategy, evidenced by the proposed dividend for the full-year of 0.5p per share.”
“We continue to have confidence in the visibility of our predictable, non-volatile revenue streams, underpinned by our established reputation for quality market-leading services in highly-regulated sectors.”
Shore Capital are very positive and have raised their forecasts per the news wires:
"Sureserve Group has beaten expectations for 2019, Shore Capital says. The compliance and energy services group should benefit from increasing demands for safety checks in social housing and a political focus on energy efficiency, the U.K. investment group says as it raises its estimates for Sureserve's adjusted pretax profit, revenue, and adjusted earnings per share for fiscal 2020 and 2021."
Very good numbers ahead of expectations. 4.4p EPS is nicely ahead of both Shore Capital's and Edison's forecasts of 4p and 4.2p respectively.
I love the 72% visibility of forward revenues already achieved. Plus 106% cash conversion, large debt reduction , a more meaningful dividend and the very strong outlook:
"Strong start to trading in FY20 continuing the Group's momentum"
Forecasts for this year to 30/9/20 will likely have to be increased to say a conservative 4.8p/5p EPS.
Highlights from today's results:
"Bob Holt, Chairman of Sureserve, commented:
"I am pleased to report an excellent year of both operational progress and improved financial performance, with our results exceeding market and internal targets.
Financial overview
· Revenue from continuing operations up 11% from £190.8m to £212.1m
· Operating profit before exceptional items and amortisation of acquisition intangibles of £9.4m (2018: £8.0m, 16% growth)
· Profit before tax from continuing operations up 174% from £1.9m to £5.3m
· Profit before tax from continuing operations before exceptional items and amortisation of acquisition intangibles of £8.3m (2018: £6.6m)
· Earnings per Share (EPS) from continuing operations up 285% to 2.7p (2018: 0.7p)
· EPS excluding amortisation of acquisition intangibles and share based payments of 4.4p (2018: 3.0p)
· Operating cash conversion from continuing operations of 106% (2018: 60%)
· Year-end net debt reduced to £7.4m (2018: £11.4m)
· Order book of £333.2m providing visibility of earnings with circa 72% covered in FY20
· Full-year proposed dividend of 0.5p, an increase of 100% (2018: 0.25p)"