focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Cavendish have increased their target price to 300p (from 270p) this morning.
The trading update is out - and it's terrific. The £25m m/cap looks ridiculously cheap imo against:
- a PBT of £4.75m!
- Shire Foods made a core PBT of £3.86m (up from £2.78m), up almost 40%....
- the cash pile is up to £23.74m, against a £24.8m m/cap!
- NAV is up to £14.82 per share and £37.5m
Even better:
- investment opportunities are improving
- and re Shire:
"We have been encouraged, however, by the levels of new business opportunities we are seeing in Shire and remain cautiously optimistic for the remainder of the year"
The final sentence is also interesting - perhaps they're suggesting special dividends here?
"we are focused on enhancing shareholder value and, inter alia, continue to monitor and review our ongoing requirements in terms of the cash required to deliver our strategy"
In the year when JL so sadly passed away, congrats to Nick in particular.
Crikey, DKL must be cheap :o))
It's taken a long time, but finally we see some director buying. Good to see the CEO buying 500,000 shares. The share price has evidently reached a point which can't be resisted. Hopefully we'll see other directors stepping up too.
The H1 results can't be faulted, with EPS up over 16% and the cash pile up 33% to over £11m.
And FNX are promising a special dividend or further buybacks with that cash pile.
Note that:
- December was a record month and H2 has started strongly
- 99% recurring income
- major new product now released
- further international growth being promised
- "strong pipeline of commercial opportunities, including significant enterprise deals in the UK and overseas, which provides the Board with confidence in the ongoing success of the business"
Love the management here. They underpromise and overdeliver and have barely put a foot wrong.
There's been 23 (count 'em!) different buys this morning of 1 share each at 9.39p and now 9.49p.
I know some buy 1 share to attend the AGM, but that's just a one-off. Can someone educate me as to why this happens?! Is it really a code to signify something as some think (this always seems like the usual b.lcks conspiracy theory to me). At least the share price has ticked up a nice 0.45 today.....
WH ireland summarise today as follows FYI:
"Today’s full year trading update demonstrates the progress that has been made in the business, with the execution of Touchstar’s multi-year strategy coming to fruition in a material improvement in profitability in FY23.
While our forecasts imply further organic growth as the group continues on its trajectory towards higher margin software licence and recurring revenues, we also note the very healthy net cash position (making up ca. 39% of the market cap), which brings the potential for bolt-on acquisitions, value being realised through further share buybacks, and further internal investment opportunities.
With the shares currently trading on a FY 2024E EV/Revenue of just 0.6x, EV/EBITDA of 2.4x and PER of 10.8x, we continue to see significant upside for the shares. We see fair value for the shares at 140p (previously 120p), which would imply a FY 2024E EV/Revenue multiple of 1.0x."
Shore Capital have an 80p fair value here.
They note that "FY23A results were slightly ahead/in line with expectations".
They've maintained their forecasts for this year and forwards, which they note are firstly conservative and secondly exclude any potential acquisitions from the cash pile.
They go for 4.5c EPS this year, with a 3.3c dividend.
Net cash is forecast to rise to $9.3m - around 20% of the m/cap.
They conclude:
"Outlook and valuation:
Each of the divisions has growth drivers with, in our view, Mottech well
placed to potentially see much stronger demand than we forecast for its water management and control software. Typically, this improves the efficiency of irrigation systems, while reducing the cost of operating them. The Antenna division is likely to benefit from the rollout of 5G across the world as it already supplies seven of the top ten operators with its technologies and is well-placed in both defence and India. Similarly, we would also expect to see good demand for the defence-related products and services of Summit/PSK. We have an 80p fair value on the basis of a DCF analysis, which is more than corroborated were MTI to achieve an FY24F EV/EBITDA multiple of 12.8x (the average of our peer group)."
Likely good news for RNWH today (particularly its J Browne and Enisca subsidiaries)....
Https://www.constructionenquirer.com/2024/03/11/extra-180m-of-water-spending-to-prevent-sewage-spills/
"Extra £180m of water spending to prevent sewage spills
The government has fast-tracked investment of £180m over the next 12 months in a bid to prevent more than 8,000 sewage spills polluting English waterways.
The new funding commitments are in addition to water companies’ existing £3.1bn investment into storm overflow improvements for this price review period (2020-2025), as well as their ongoing annual investment to maintain the performance of the existing network.
Examples of measures include accelerated wetland construction programmes, investment in AI systems to help manage storm loads, the installation of thousands of new in-sewer monitors to check flows and spot blockages early and the recruitment and training of specialist staff.
Environment Secretary Steve Barclay said: “The amount of sewage being spilled into our rivers is completely unacceptable and the public rightly expects action.
“This £180 million of accelerated investment, which will stop more than 8,000 sewage spills over the next year, is a welcome step forward as we continue to push for better performance from water companies and hold them to account.”
Nice coverage on Master Investor:
Https://masterinvestor.co.uk/equities/small-cap-catch-up-time-reat-eman-and-foxt/?mc_cid=8820943cc5&mc_eid=db9f9bbaf2
"Time Finance (LON:TIME) – Ready To Tick Higher
We now know that the full year results from this independent specialist finance provider will be better than market expectations.
We will have to wait until the Bath-based asset, loan and invoice finance company issues its Trading Update, covering the nine months to end February this year, which is due to be published on Tuesday 26th March.
Analyst Andrew Renton at Cavendish Capital Markets was previously looking for the year to end May 2024 to show total revenues up from £27.8m to £30.8m, upon which he expected to see adjusted pre-tax profits improve from £4.4m to £5.7m, lifting earnings up to 4.6p (3.7p) per share.
For the coming year he was forecasting £33.1m revenues, £6.7m profits and earnings of 5.4p per share.
However, after the 26th I wonder whether he will be upgrading his estimates?
The group’s shares have been up to 44p, that was in late February, since when they have dipped to 36p before picking back up to 39.5p by last night.
These shares are cheap and take little account of the £37m capitalised company’s growth potential in the price."
Https://masterinvestor.co.uk/equities/small-cap-catch-up-time-reat-eman-and-foxt/
"REACT Group (LON:REAT) – Ready To Be Swept Away
In my Profile on this leading specialist cleaning, hygiene, decontamination and contract cleaning business on 12th February I made a concluding comment about the 1,067,648,507 shares in issue.
I clearly stated that –
“It would be sensible if moves were made to lose the current ‘penny share’ status, that could give it more investor credibility – which it certainly deserves.”
The shares, which I classed as a bargain for new investors, were then 1.25p, they have since been up to 1.50p, that was before yesterday morning’s announcement which I consider will go a long way to gaining the £15m valued group so much more credence.
The group has now proposed to consolidate its share capital with the aim of improving the marketability of its shares.
If approved, this measure will give 1 new share for every 50 currently held.
That will see the number in issue reduce following the consolidation to just 21,352,971 shares.
We will look to the AGM on Thursday 28th March and the group’s latest Trading Update for further comment on the current year Outlook.
The shares closed last night at just 1.38p."
BGF Investment Management are still buying. They now own 12.62%, or 13.134m shares - so they've bought another 1.66m shares in just the last two weeks:
Https://uk.advfn.com/stock-market/london/sdi-SDI/share-news/SDI-Group-PLC-Holdings-in-Company/93455058
INSE will announce their results on 26th March:
Https://uk.advfn.com/stock-market/london/inspired-INSE/share-news/Inspired-PLC-Notice-of-Analyst-and-Investor-Presentations/93450474
As a reminder, Liberum forecast £16.2m PBT for last year, rising to £18.3m PBT this year.
That equates to 13p EPS rising to 13.7p EPS this year - a P/E of just 5.2.
Liberum also forecast a 2.7p dividend for last year, rising to 2.9p this year (a 4.3% yield).
WH Ireland have raised their valuation for TST to 140p (from 120p).
They've also updated their numbers. They have £7.2m turnover for last year (up from £6.7m in 2022), rising to £8m this year and £8.5m next year.
They now forecast 7.6p EPS for last year (up from 6.6p in 2022), rising to 8.7p EPS this year and 10.0p EPS next year.
The cash pile is due to rise to £3.4m this year and £3.8m next year, with the dividend rising to 2p and then 2.5p.
With that cash pile now backing up almost 40% of the m/cap, for me it represents firstly a backstop in terms of NAV and share price downside, and secondly an opportunity as TST have stated that they wish to expand either or both internationally (via partnership) and by acquisition. So given that the cash pile puts TST in the position to do so this potential may well be recognised in the share price at some point by canny investors out there.
With the current macro situation today's results and outlook are very encouraging.
That's 3.6p historic EPS, with PBT up 12% and EPS up 9%. Which with the $8.1m cash pile puts MWE at 36.5p on a rather cheap valuation on a single figure P/E on an ex-cash basis.
Especially given the confident outlook for this year in all three divisions:
"The macro trends for all three remain positive: from the continuing roll-out of 5G cellular connectivity; to tackling the growing global issue of water scarcity; and the significant increases in local and international defence spending."
"Overall, MTI remains well positioned across all three divisions, with each division backed by strong macro trends underpinning their future prosperity. The first two months of 2024 have been in line with internal expectations and judging from the pipeline of potential opportunities, the Group is well placed, supported by a strong financial platform, to continue to seek to expand through a mix of acquisition-led and organic growth."
The 2023 trading update notes that PBT will be 60% up on last year at around £0.65m, so this and revenues will be just slightly behind forecasts - but EPS will be "well above" expectations due to a lower tax charge and the buybacks.
I'd guess EPS is likely to be around 7.5p. The 2024 forecast is already 8.7p EPS, but this may be increased due to the buybacks.
The cash pile is steady at £3m - almost 40% of the m/cap. So the historic ex-cash P/E is only around 7.5.
Most importantly, the outlook for 2024 is extremely positive:
"Trading remains on track for 2024 to be a year of
· Further revenue growth
· Maintenance of healthy margins
· Positive cash generation
· Progress in profitability
Ian Martin, Chairman, commented: "Touchstar entered 2024 in good shape. In the market sectors in which we operate activity continues, which gives reassurance for the outlook in 2024. The medium-term prospects for the company have improved. The team is now focussed on making such opportunity a reality, enabling a long term continuation of the positive trends in financial performance, building upon the solid platform we have developed and making Touchstar a better business."
Tipped by Midas in the Daily Mail today as one of "the Great British businesses that lead the world":
Https://www.thisismoney.co.uk/money/investing/article-13176813/MIDAS-BUDGET-SPECIAL-time-shout-rooftops-invest-Great-British-businesses-lead-world.html
"The life scientific
The UK is recognised the world over for its prowess in life sciences from discovering new drugs and developing vaccines to producing advanced medical kit. Last week, the Chancellor highlighted his commitment to this sector, with funds and strategic support.
Hunt is not alone in backing British biomedical brains. As he delivered his Budget, AstraZeneca announced a £650 million investment in the UK to bolster scientific skills and help develop new vaccines. This shot in the arm should filter down to a host of smaller life sciences firms.
HVivo, for instance, has developed trail-blazing trials for vaccines, helping to bring them to market faster and so saving lives.
Its shares have soared from 10p to 27p since Midas recommended them in January last year, but the stock should continue to deliver. Boss Mo Khan works with some of the world's biggest drug firms and HVivo has also helped develop vaccines for respiratory syncytial virus (RSV), the bug that swept the US and UK last winter and can be fatal for infants and the elderly."
Tipped by Midas in the Daily Mail today as one of "the Great British businesses that lead the world":
Https://www.thisismoney.co.uk/money/investing/article-13176813/MIDAS-BUDGET-SPECIAL-time-shout-rooftops-invest-Great-British-businesses-lead-world.html
"Team Internet, formerly CentralNic, is another winner, recently announcing record sales and profits from helping firms to bolster their online presence and protect themselves from cyber criminals. Shares have almost tripled over the past five years to £1.36, but City analysts reckon they are still far cheaper than they would be on America's Nasdaq exchange."
Nice - thanks. Here's the headline and the conclusion:
"A low-cost airline at a bargain price
Its emergence as the UK's biggest tour operator and its popularity among its customers only enhances the investment case, and it's time to take advantage"
"Jet2 is forecasting pre-tax profit before currency movements of between £510mn and £525mn this year, which would be almost double its pre-pandemic peak and an increase of more than 30 per cent on last year. Cash is also abundant, with net cash (excluding leases) rising by 46 per cent to £1.82bn in the first half of FY2024.
And yet over the past 12 months, Jet2’s share price has only edged up by 5 per cent. Little wonder, then, that it recently popped up on the IC’s Alpha screen looking for UK Aim companies offering growth at reasonable price."
It's certainly encouraging to see the share price bouncing both yesterday afternoon and today.