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tipped as a buy on saturday (subscription-only):
https://*************.com/views/74216/react-group-first-half-growth-across-all-three-divisions-buy
"react group – first-half “growth across all three divisions”, buy
by hotstockrockets | saturday 27 april 2024
cleaning, hygiene, and decontamination group react (reat) has issued a trading update emphasising half-year ended 31st march 2024 “good sales growth across all three divisions of the business… adjusted ebitda of £1.3m up 38%”. how good is the news from a currently up to 72p offer price for the shares?
etc"
Cavendish's latest research from earlier this month hasn't been posted here yet in detail.
They have a 68p target price, and they forecast 5.5p EPS this year rising to 6.9p EPS and then 7.9p EPS.
Here's some extracts:
"Strong organic growth; focus on EBITDA
Venture Life has reported FY23 results to December 2023, following the February trading update. Revenues grew 17% in the year to £51.4m (our est. £50.7m) and adjusted EBITDA was £11.6m (our est. £11.6m). Cash conversion was 85%, generating £9.8m of cash from operations. Cash generation and no M&A in 2023 allowed the company to de-lever, closing FY23 with net debt to adjusted EBITDA at 1.3x.
Management have focused on growth with three therapy areas generating double-digit revenue growth and online sales up +40%. Our extended forecasts anticipate increased investment, developing new products and expanding distribution channels to drive future revenue growth, with a focus on EBITDA and cash generation. We believe Venture Life has delivered strong organic performance in 2023 and anticipate on-going growth which could be complemented by re-starting the M&A strategy."
"Cash – The company generated cash from operations of £9.8m (FY22: £6.2m), indicating cash conversion of 85%. FCF for debt servicing was £4.8m, up strongly versus £2.8m in FY22. Strong cash generation and no M&A in 2023 allowed the company to deleverage, closing FY23 with net debt to adjusted EBITDA of 1.3x (FY22: 1.65x), which has subsequently fallen to 1.15x."
"Outlook – We note Venture Life’s stated commitment to improving EBITDA margins, that, while lowered in the near-term, are expected to benefit from marketing investment. This reflects a focus on profit and cash generation across all revenue streams, generally regardless of the differing gross margins. We expect this focus to support profit and cash growth for the business.
Investment thesis – Venture Life has delivered an organic 2023, demonstrating its ability to grow revenues and generate cash, allowing the company to de-leverage. We believe the company exited 2023 in excellent shape, noting a diverse product portfolio with further organic growth opportunities, available manufacturing capacity for expansion into new opportunities and a stronger balance sheet to re-engage its M&A strategy."
They also "expect the company to re-initiate its acquisition strategy during 2024 and beyond", and "as of the end of FY24E, based upon our forecasts of the current business, Venture Life would have £16m of the initial £30m RCF available, plus the potential to draw a further £20m".
Under different scenarios this could add between a further £2.5m-£7.5m of EBITDA to current forecasts.
Nice £60,500 buy at 41p on the stroke of 8.00 and a subsequent tick up - someone's keen.
Good to see the Shinez acquisition completed.
Note that:
"this acquisition is expected to significantly enhance earnings per share (EPS), with a forecasted adjusted EPS growth in the high single-digit percentage range for the pro forma fiscal year 2023, not accounting for potential synergies":
Https://uk.advfn.com/stock-market/london/team-internet-TIG/share-news/Team-Internet-Group-PLC-Completion-of-Acquisition-of-Shinez-I-O-Ltd/93728895
Currently online you can only buy a maximum 3k shares at 71.95p, whereas you can sell 15k shares at a big premium to the 71p bid at 71.55p. Encouraging.
I added more yesterday - can't see the share price being at present levels for long.
Singer Capital Markets have updated - they say Buy and have a 97p target price.
They forecast 6.76p EPS to this September, rising to 7.68p EPS and 8.61p EPS.
The £1m cash pile also rises to £2.6m and then £4.6m.
Since H1's EBITDA is already 53% of their forecasts, even before the recently RNS'd contract wins, it's highly likely imo that REAT will beat expectations this year.
Especially with over 85% recurring revenues and improving margins.
Singer conclude as follows:
"Contract win momentum continues The Company has continued its drive on new business, with three recently announced material contracts totalling over £1.3m of revenue p.a. In addition, it continues to be awarded numerous small and medium sized wins which highlights its cross-selling capability. The pipeline for the remainder of the year remains robust which provides the Board with confidence over full year expectations".
Goliard has posted elsewhere that CSSG have received the first £500,000 of the additional £5.8m Vigilant sale proceeds:
"Just to say that I have received confirmation from CSSG that that the first payment of over £500k was received on 28 March."
Peel Hunt have a 1035p price target and say Buy:
Https://www.proactiveinvestors.co.uk/companies/news/1045922/accesso-s-showare-product-adds-another-layer-to-equity-story-says-peel-hunt-1045922.html
"Accesso’s ShoWare product adds another layer to equity story, says Peel Hunt
Published: 14:03 23 Apr 2024
Analysts at broker Peel Hunt see clear benefits to accesso Technology Group plc’s equity story after bringing its ShoWare software as a service (SaaS) ticketing suite to the UK.
“This scalable solution has already proven itself, with over 600 venues around the world using the service, and allows venues to manage the end-to-end ticketing process, whether online or onsite,” noted Peel Hunt.
The broker added: “Alongside accesso's ability to build long-term relationships and its established relationships with UK venues, today's news should be viewed as a positive addition to the accesso equity story.
“Features include seamless online/mobile sales, white-label capabilities to retain a client's brand, dynamic pricing to optimise ROI, and CRM features to build customer loyalty.”
Analysts slapped a buy rating on accesso stock following this announcement, with a target share price of 1,035p."
As I write you can buy 500,000 shares online at the 3p bid price!
Looking on the (relatively) optimistic side, perhaps there's a fund dumping as its holding is now so immaterial.
At the current £10m m/cap the risk/reward is certainly better than it's been for a long time for newbies. So it all depends on your view on that risk....or the apparently substantial rewards which could accrue if SCE ever actually their machinery running properly and start delivering on those humungous contracts.
I like this:
"Getech’s valuation has come down in recent years, mirroring the trend in the oil and gas sector, since we were heavily focused on this sector. This means that now is a good time to make an investment in the company, buying at a very low share price and at an inflection point as we have already gone through the pains of redeveloping our services and making them applicable to the energy transition. In 2022, 66% of our revenue came from the O&G sector, and the rest is from minerals and geothermal. My goal is to increase our business from green industries and bring the ratio to least 50% - this would place us under the Green Economy Mark, which recognizes London-listed companies deriving half or more of their revenues from products contributing to the green economy."
Https://www.gbreports.com/interview/richard-bennett
"In his latest interview, CEO Richard Bennett discusses how leveraging our extensive geoscience data and AI capabilities enables us to locate subsurface resources essential for the energy transition. Dive into the full interview to also learn about new search spaces and risk/reward strategy in the minerals exploration"
capd has "further to go" (subscription-only):
https://*************.com/views/74154/capital-limited-q1-update-an-already-winning-share-tip-with-further-to-go
Dowgate Capital have retained their Buy and 100p price target.
They forecast 6.9p EPS to this September,rising to 8.1p EPS and then 9.0p EPS, though they state that even these are based on conservative assumptions.
The £1m cash pile at September rises to £3.1m and then £5.1m. Though it's likely that there'll be more earnings-enhancing acquisitions by then.
In summary:
"Positive 1H momentum shines through.
React Group has released a positive update that has confirmed that the strong 2H 2023A momentum has continued into 1H 2024E, with what was described as a ‘record trading performance’. The Board has reported good sales growth in all three divisions of the business, with the statement commenting that the Board has ‘a high degree of confidence in achieving full year market expectations.’ We have left our FY 2024E forecasts unchanged at this point. These assume FY +9% revenue growth, but in our view, there could be an accent on the upside as the year progresses, following 1H revenue growth of +14%, and contract wins that should benefit 2H and next year. We retain our Buy stance with a Target Price of 100p. This still conservatively assumes the Group achieves c60% of its medium term cashflow target, and we reiterate again, it also does not include any potential value enhancement from deploying the Group’s firepower on acquisitions."
"We retain our Buy stance with a 100p TP. We value React Group using the EVA®/MVA valuation method. This derives a share price of 100p assuming only c60% of the medium-term goal of £5m p.a. of free cashflow generation is met. It could outperform that, and we highlighted in our 9 April initiation research, that we believe the Group has firepower to enhance."
A terrific H1 trading update today, which strongly suggests that REAT will beat expectations for the year.
With H1 EBITDA up 36% year on year to £1.3m, REAT have already achieved 52% of the £2.5m consensus forecast, even without the substantial contract wins already announced this year.
Other highlights:
- recurring revenues remain above a huge 85%
- the cash pile is now up to £1.5m, against a £14.8m m/cap
- margins are increasing fast given revenues up 14% and EBITDA up 38%
No wonder there's "a high degree of confidence in achieving full year market expectations" - and much more imo.
On a current year ex-cash P/E easily in single figures REAT looks in great shape for a re-rating:
Https://uk.advfn.com/stock-market/london/react-REAT/share-news/React-Group-PLC-Trading-Update/93710572
With comments elsewhere that there's no or very little stock available to buy online. Should be good for a lot more if there continues to be no stock around.
WIA Gold were up another 10.5% last night to A$0.105 - this holding is now worth almost exactly £10m.
Yep, great to see buying coming in now at 98.82p.
Hopefully Rockwood are continuing to buy....
Crikey, even INSE's joining in today's small cap rally....about time. Loads of upside here for a fair valuation imo.
As a reminder, Liberum recently issued a new 36 page Buy note, with a 200p price target....
Here's their summary:
"Inspired Plc
The transition to a more diversified business is on track
The FY 23 results were slightly ahead of our estimates. We make four key points on the business: 1) Inspired has evolved from a Third-Party Intermediary (TPI) in the energy market to a technology-enabled services provider; 2) synergies between divisions help cross-selling and make Inspired uniquely qualified to help with both sides of the energy equation (cost + consumption); 3) underlying EBITDA is expected to double in five years (FY 22-27), indicating 24% upside to our FY 26 estimate; 4) the business is becoming less reliant on Energy Assurance profits, which helps increase earnings quality. In terms of valuation, a CY 24 P/E of 4.6x is attractive given the growth.
Key points
FY 23 results were slightly ahead.
Optimisation was the star performer.
Net debt (exc. leases) was flat at the H1 23 level of £49m.
Contingent consideration being paid.
Value drivers
Scope to grow in areas like Optimisation, Software and ESG.
These should accelerate growth and increase the valuation multiple.
A huge addressable market.