The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Nice comment from Shore Capital's analyst when reviewing Hill & Smith (HILS):
Https://citywire.com/investment-trust-insider/news/expert-view-hill-and-smith-costain-games-workshop-and-quilter/a2438085?re=118287&refea=218441
"However, he said the ‘stock may underperform if the market switches to a risk-on environment at some point, as we see more upside elsewhere’, particularly in engineering services group Renew (RNWH) ‘which is cheaper despite generating higher returns on invested capital, higher historic earnings growth, and having a lower risk profile’"
Tamesis have released their post-results update.
They retain their 160p target price, and note that EBITDA, PAT and net debt were all better than expectations.
They forecast 18.7c EPS this year, i.e 14.7p EPS, with "at least" a 3.04p dividend.
Brief extracts - note that they were "taken aback" by the initial share price reaction!
"And there is more to come: management are guiding to a revenue range of $355 - 375m for FY24. If delivered, and we normally get upgrades throughout the year, it will equate to a 17% CAGR since 2021 and we see no reason for this growth not to continue into 2025. As part of the guidance, the company have specifically guided to revenue from the MSALABS business at $50 – 60m, and reiterated their guidance of 21 Chrysos units to be rolled out by 2025 which we estimate will deliver $80m in sales. Capex is guided to $70 – 80m, covering sustaining capex for ongoing fleet as well as their planned expansions in the US and MSALABS.
We show our forecasts below and in the appendix. At the mid point of guidance revenue grows another 15%. We believe EBITDA will reach $98.7m assuming the margin remains at 28%. Cash from operations reaches $104.9m and net debt goes to $76.1m. This will allow management to pay out at least 3.04pps in dividends – currently yielding 3.4%.
Investment Case
The investment case is still centred on diversified and therefore low risk growth. This in turn has been accelerated by the breakthrough technology that is Chrysos which carries very low capital requirements. The engine room drilling business is benefitting from the increasingly large and high quality client base for whom Capital works and finally the mining service operations have the ability to deliver step changes to the P&L. The growth is accompanied by a dividend and an investment business with assets currently worth $47.2m. We believe the company should start to set investment parameters and structure to its investing. This, along with the release of the margins in the MSALABs operation, may encourage the market to apply a SOTP analysis to the valuation which, using our methodology, comes to 157pps."
A completely bizarre start today, presumably caused by short-term traders. And an opportunity for those wishing to buy!
Zeus have raised their forecasts for this year yet again and acknowledged the beating of their already raised expectations for last year:
They now forecast 25.4c EPS this year, rising to 27.3c EPS next year.
The dividend is also now forecast to rise to 2.2p this year. And net debt is to fall dramatically to £23.2m.
Brief extracts:
"Assisted by share buybacks in the period, adjusted basic EPS increased by 17.2% to 23.2 US cents, 3.6% ahead of our recently upgraded estimate. With these results, Team Internet extends its track record of upgrading and outperforming expectations."
"Record results
Team Internet’s FY23 results confirmed another strong year of trading from its
Online Marketing and Online Presence businesses. Both revenue and EBITDA growth remained in double digits, margins on net revenue continued to improve, and cash conversion remained strong. We continue to believe that the Group has substantial long-term growth opportunities including international expansion, new partner development, and vertical integration. In our view, Team Internet’s strong track record, cash generation and growth opportunities, both organic and inorganic, are not reflected in its 4.8x 2024 EV/EBITDA multiple."
"Outlook: Management remains confident in meeting market expectations for FY24. With Zeus estimates at the bottom of the consensus range, we increase FY24 EBITDA by $1.0m (1%) to $98.3m, which may still prove to be conservative. EPS growth, now +9.5% yoy, is enhanced by the full year impact of share buybacks. We increase FY24 DPS from 1.8p to 2.2p. Forecast changes are summarised on page 3. FY26 forecasts are also introduced today, showing 6% net revenue growth and further margin expansion.
Valuation: We continue to believe Team Internet shares are very attractively valued. Despite the strong operating performance and financial results, the share price is broadly flat on 12 month basis. The shares trade at only 4.8x EV/ EBITDA 2024 and 6.8x PE, with a 16.7% FCFF yield. In comparison, Online Presence peers trade at 9.2x EV/EBITDA 2024 and Online Marketing peers trade at 7.3x, 91% and 52% valuation premiums to Team Internet."
Good to see the CEO buying another 14,000 shares at 71.25p:
Https://uk.advfn.com/stock-market/london/sdi-SDI/share-news/SDI-Group-PLC-Director-PDMR-Shareholding/93500745
Excellent results today, which are nicely ahead of both Zeus's and Edison's forecasts for all of revenues, EBITDA and EPS.
The 23.22c adjusted EPS is well ahead of Zeus's 22.4c forecast.
And the 2p dividend is double that of Zeus's 1p forecast.
The CEO is already confident about meeting expectations for this year.
Given TIG's track record and prospects the current share price is just far too low.
WIA Gold's share price was up another 10% overnight to 0.075 and to more new highs. So the value of CAPD's investment in WIA has almost doubled since the year end and is now worth over £7m.
The market has already priced in last year's reduction in PBT.
But the overall health of the company looks terrific, with the order book up 70% to a whopping £943m and a positive forward outlook. The move into data centres has been a huge success and should continue to thrive.
Net cash at £19.3m compares nicely to the £67m m/cap.
Cavendish have left their forecast for 2024 unchanged at 24.1p EPS. Which leaves CTO looking very cheap.
They have a 197p price target.
Hopefully the LSE presentation will be available later as I was busy and couldn't listen.
One interesting comment from the presentation reported elsewhere (hope DangerCapital doesn't mind me reposting):
"Predictive likely to be taken over post DFS
PDi currently worth $32m to CAPD so this would be a material event"
Bodruncie, all the main numbers quoted - PAT, EBITDA, net debt - were some way better than consensus forecasts. I'm not sure what more one can say in respect of being better than expectations!
Good to see the share price bouncing now after the usual ridiculous exiting by short-termers on results days. This always seems to happen with CAPD, but I suppose it does give opportunities to buyers.
Strategic Equity Capital plc, who have a £7.32m investment in INSE, note in their interims today that a the shares fell "despite strong current trading and limited newsflow".
They summarise as follows:
"Inspired Energy
Investment Thesis
UK B2B corporate energy services and procurement specialist with strong ESG credentials
Leading player in a fragmented industry; significant opportunity to gain market share through client wins, proposition extension and M&A
Valued at a substantial discount to comparable private market transaction multiples
Developments
High energy costs have driven accelerated growth in optimisation services
ESG revenues accelerating from a low base"
Results are out and look highly encouraging imo.
NAV has held up nicely at 84.2p given the macro environment. Cash is up to £4.4m including the final Exscientia shares sales.
Above all, a number of companies look particularly exciting - namely Alusid, CamGraPhIC, Fieldwork Robotics, Nandi Proteins, Pulsiv and The Vaccine Group.
A number of these are on the cusp of or are now selling product in quantity. Alusid is once again mentioned as IPO-ing soon. GraphEnergyTech and CamGraPhIC sound particularly exciting.
FIPP are trading at less than 50% of NAV. Much too great a discount.
Results are out - and are significantly ahead of consensus in all respects (except revenues as these have already been disclosed).
PAT is a substantial 9% ahead of consensus.
The core 17.5c historic EPS puts CAPD on far too low a rating, especially given the $47.5m investment portfolio which offsets 2/3 of the debt.
2024 guidance for revenues is a very decent 15% up at the midpoint - this despite Sukari mining services ending halfway through the year.
The tone of the outlook is extremely positive about "maintaining the growth momentum".
MSALabs is forecast to bring in $55m revenues this year at the midpoint - 43% up on last year.
And there's news of a new contract win "from Allied Gold Corporation for a grade control drilling services contract across its Cote d'Ivoire complex".
Last night's and this morning's RNS's suggest that Canaccord Discretionary Clients were the sellers, and their shares were picked up by (1) the buybacks and (2) Crucible Clarity Fund Plc, who increased their holding to 6.55%, or 152,393 shares.
Wow - a really NAV-enhancing move just announced. Over £916,000 of buybacks, and there must be a belief (rightly imo as above) that at 1160p the shares are extremely undervalued:
https://uk.advfn.com/stock-market/london/volvere-VLE/share-news/Volvere-PLC-Transaction-in-Own-Shares/93481302
Re the prior post on valuation, he's used a straight 25% tax charge on Shire's £3.64m contribution to VLE after intra-group management charges et al.
Firstly, the tax charge is unlikely to be precisely the full 25% due to capital allowances and super deductions. Let's call it a conservative 22%. Secondly, imo we should use Shire's PBT before intercompany charges etc, which is £3.86m. Thirdly, let's be a tad more generous and use a P/E of 8 given Shire's terrific track record and apparently excellent competitive position.
That gives Shire a £19.3m valuation. Add in the £23.74m cash and the total is £43.04m, which is around £18.50 per share.
Happy to be corrected/struck down!
Having listened to the presentation, here's a few points I thought were interesting (in no particular order - any corrections welcome!):
- MWE have had a "very strong" start to 2024
- defence-related reveues were up to 44% of the total last year
- MWE are one of only 2 competitors in India for 5G backhaul business, as one other was disqualified last year for concerns over quality
- the October 7th attacks caused much destruction of not only telecoms equipment and towers, but also agricultural equipment and irrigation systems. Orders to replace these are now coming through
- more fountain projects are likely, firstly in Israel and then internationally. These have very nice recurring income
- Israeli defence budgets are being "increased dramatically"
- all R&D is expensed, not capitalised
- MWE are ready to look at more acquisitions, which will only be profit-enhancing
- the dividend has grown 110% since 2018
Here's the presentation:
Https://www.youtube.com/watch?v=rnbttewQ4qU
You can register to watch CAPD's post-results LSE presentation at 9.00 am tomorrow. Which I assume means the 2023 results will be tomorrow morning (following the positive year end trading update).
Broker consensus is usefully noted in today's RNS - pretty handy against a £175m m/cap and with an additional $50m or so of quoted investments in hand:
Https://uk.advfn.com/stock-market/london/capital-CAPD/share-news/Capital-Limited-FY-2023-London-Stock-Exchange-Presentation/93478501
"Capital Limited consensus summary - 14th March 2024: Below is a company compiled consensus summary, reflecting the estimates of our covering analysts. Analysts include Peel Hunt, Stifel, Canaccord Genuity and Tamesis.
FY23 Consensus ($m)
Revenue 318.4
EBITDA (adjusted for IFRS 16 leases) 89.2
Operating profit 55.1
Net profit after tax (Adjusted for investment gain/(loss) 35.3
Net Debt 71.7"
Should generate some more interest tomorrow:
Https://www.investorschronicle.co.uk/ideas/2024/03/12/a-payments-business-that-s-returning-cash-to-shareholders/
A starting point for discussions re valuation posted from Jeff256 elsewhere - will have a think myself about this tomorrow:
"Well, the pie business is making £2.73m after tax. Apply a PE of 7 on 80% ownership and we get about £15.3m. Add £23.74m cash and we get £39m
Approx £16.90 per share."