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Hop behind the wheel at franchised motor retailer Cambria Automobiles (CAMB:AIM) at 54p following positive read-across from sector peer Vertu Motors (VTU:AIM) (24 Jul). The latter’s trading update suggests the UK new car market has not yet run out of fuel. Steered by chief executive officer Mark Lavery, motor retailer Cambria trades under local brand names such as Dees, Doves, Grange and Invicta and has a balanced portfolio spanning the volume, premium and high luxury brands. At a time when the UK consumer is feeling more confident, the Swindon-headquartered company is growing organically and through acquisitions, with Lavery looking to boost annual sales from almost £400 million last year to £1 billion plus in time. Given its strengthening balance sheet, flush with £25.8 million net assets at the half-year and underpinned by substantial property, Cambria is ready to move on a buoyant bid pipeline. Though the £54 million cap made its name buying and turning round underperforming dealerships, it is now moving towards immediately earnings-enhancing deals that strengthen the brand portfolio mix. Cambria’s latest acquisition (8 Jul) is its first Land Rover franchise, a canny move given bumper demand for the brand, and a sixth Jaguar dealership. Bought from larger quoted rival Lookers (LOOK) for £10.5 million in cash, these assets have boosted Cambria’s prestige brand presence and enriched what are admittedly low industry margins. Vertu’s latest trading update is encouraging for both businesses, trading ahead of expectations in the four months to June, during which the UK new retail market continued to enjoy double-digit year-on-year growth. This reflects the compelling product and finance offers coming the way of UK consumers at a time when manufacturers see overcapacity and weak demand in continental European markets. Cambria pleased investors on 8 July with news that it should ‘at least match market expectations’ for the year to August. These results will be published in November where joint broker Panmure Gordon forecasts £5 million pre-tax profit, earnings per share of 3.9p and a 0.5p dividend. For the financial year to August 2015, Cambria is forecast to make £6.1 million pre-tax profit for earnings per share of 4.8p, rising to £6.4 million and 5p by August 2016. There’s a good chance that the earnings upgrade cycle has further to run. Panmure Gordon’s 84p price target suggests attractive 56% potential upside and we share its bullish view.
Another great write up from www.sharesmagazine.co.uk for CAMB. I have no idea why this share is so far below the radar but there is obvious upside to the SP.
this is from Shares mag: The market has misunderstood the figures connected to Red24’s (REDT:AIM) sale of its 25% stake in training business Linx. The unit contributed £173,808 to operating profits last year, according to accounts published by the firm (17 Jun), so a sale price of £375,000 does not on the face of it appear to be a particularly good one, equivalent to a multiple of profits of just over two times. But the first figure includes a £114,000 fair-value adjustment and some legal costs, so underling profits were actually £54,000 meaning the unit was actually sold at a much-better multiple of 6.9 times. Frustratingly, none of this detail was included the published accounts on the day, hence why investors were right to be confused, precipitating a 15% share price sell-off. While clarity may help calm nerves, the loss of the unit has pushed earnings forecasts back a year with house broker Finncap’s previous 1.8p March 2015 earnings per share (EPS) forecast now on the slate for 2016. The new March 2015 EPS forecast is 1.5p. Sentiment is understandably poor towards the stock, but we remain bullish longer term and believe investors should stick with Red24. It has invested for growth so the next stage is converting that into new business. We are encouraged by a good start to operations in Germany.
I was only joking ! Topped up with 2500 shares myself last night to take me upto 8000. I am investing through ISA so have limited funds to play with. Anyway good luck Dan, lets hope we all have a good time with REDT
Welcome back...I will look out for the 250k purchase at some point this afternoon. Paul
I have heard that the results have been delayed and will not be this week. Anyone have any confirmation on this? Dan from Shares Mag tweeted me this info. Paul
I had confirmation the results could be posted on Friday 13th on twitter: Daniel Coatsworth‏@SharesMagDan·37m @SharesMag Hi - yes, they are reporting on Friday 13 June. Insert your own joke regarding Thriller or Horror Show
Libero, I am looking for long term investment...not a quick turn around. So I would expect to be in for a few years unless the situation indicates a sell. I like the mix of small cap with a decent, growing dividend and I am hoping for some SP increase as a nice bonus. There seems to be a good chance of good news in the results as there is new income in there that could be better than expected (IMO). I do have a tendency to be positive but I dont have a crystal ball :-)
Cheers Dan, hopefully they will be as good I expect
Hi, I am new to ISE as a relavtively new investor. Could anybody confirm when the end of year results are posted please? I note that the last few years they have been released around the second week of June. I am holding shares RED24 and would like to see some action around the result.