Welcome to our new product “Friday Takeaway”
This will delve a little deeper on individual companies and focus on non-house stocks under £200m market capitalisation to help raise awareness
| Index | Thurs | Weeks change % |
|---|---|---|
| FTSE 100 | 8,239 | +1.1% |
| FTSE Small Cap | 6,936 | +1.3% |
| AIM All Share | 748 | +0.54% |
CTG- Transactions to recover
PMP- Breaking new ground
SKL- Hockey Sticks
ZIN – Camera Action
A Trading Statement came out this week from this unique business comprising two divisions of Professional business Advisory Services and Stock and Inventory Systems which operates from 37 offices across the UK and Europe.
Trading in H1 is reported below expectations but H2 is stronger and there is confidence of a return to profits for the full year to December 2024. Its interims to June however, due to be reported shortly, are likely to show an operating loss of £0.6m, (H1 23: £1.4m loss) resulting from fewer transactions in its international brokerage operations. There is also slow growth from its visitor attraction software while losses from its retail stocktaking business are lower than H1 2023. Christie has significant operational gearing given its relatively high fixed cost base so the swings in commission from its transactions are amplified. At the full year March 2024, net funds were £0.6m and a 1p dividend was paid.
The professional services UK Transactional pipeline is 24% higher than last year with new instructions from clients across its specialist sector seeking to buy and sell businesses and is likely to recover to broking over 1,000 business with an increased level of fees in H2. Full year operating profits are anticipated to be between £0.5m and £1m on revenue of c. £60m, which is still a recovery from last year’s losses of £3.8m.
Comment:The shares fell from 110p and the Interims should reinforce the prospects for a profitable H2 which could then trigger a recovery.
The owner, designer, manufacturer and omni-channel retailer of leading homeware brands such as Spode, Royal Worcester and Pimpernel, have a combined history of 750 years. This week it reported its interims to June 2024 with a 17% revenue decrease to £36.6m mainly due reduced sales from South Korea, as otherwise sales would have increased 5%. EBITDA decreased sharply to £0.1m from £2.7m, while the statutory loss was £2.6m. The operating costs were reduced by around 7% so there is a leaner operational cost base.
The cash held is £733k, but with debts reduced to by £1.6m to £14.3m. A more than 4-year credit facility has been agreed for £30m with Barclays to fund working capital. A 1.5p interim dividend has been declared. Portmeirion has a global reach and has taken market share across key markets and continues to drive further online penetration with its established brands.
Despite short term market pressures, it anticipates South Korea sales to recover in H2 and a strong order book for Christmas which is already ahead of last year as Portmeirion remains confident of growing sales and significantly improve operating margins.
Comment:It pays a dividend and there is room for a significant recovery in profits over the medium term.
A provider of SaaS compliance platforms and off-the-shelf e-learning courseware to corporates reported interim results to June 2023. These showed continued growth in recurring subscription revenue and a return to profitability. Skillcast has developing training courses for over 20 years and these are aimed at helping both large and small companies to create compliance awareness with its employees, such as Anti- Bribery, GDPR, Cybersecurity and Worker Protection and Harassment.
The gross margin improved to 71% from 66.5% as revenue grew 24% to £6.4m driven by a 35% increase in subscription revenues from new customers and upselling to existing customers. The EBITDA of £31k compares to a £0.7m loss and is a glimpse of the potential operational gearing on profits as revenue increases.
Directors own most of the shares with a circa 79% director holding, while Canaccord and Gresham House hold 4.74% each, leaving a free float of circa 11%.
The operations generated free cash flow of £1.1m and cash increased to £8.8m and there is no debt. An interim dividend of 0.168p per share is declared and if 0.45p is repeated for the full year the yield would be 1%. Having reached break-even, the investment phase is completed, and the focus is on growth and driving profitability.
Comment:The tightly held shares are up 145% this year so may already be anticipating a relatively strong H2.
This television, content and audio production group has won new production contracts worth £4m. There is a multi-million-pound commission from the documentary division of a global streaming platform. Another new contract biopic for one of the biggest pop bands of the 20th century. The editorial details however are being kept confidential, but the revenue is included in the Finals to December 2024.
The interims to June are to be announced on Wednesday 2nd October and current market expectations are for revenue of £41m and an EBITDA of £2.1m which is ahead of the previous year and has been possibly held back by the international instability. In 2023, Zinc Media made 250 hours of TV for broadcasting channels for clients such as Sky, BBC, ITV and Discovery.
The main shareholders include Herald with 26%, Miton with 8.26% and Ruffer with 4.5%, and other leaving a free float of 29%. There is net cash of £1.4m so further funding is unlikely to be needed unless its for acquisitions.
Comments:The large market for quality TV does not seem to be reflected in the EBITDA/ EV of 7x.
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