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
We wish our readers a Happy New 2025!
Alphabetically arranged
Share prices and market capitalisations taken from the current price on the
day of publication
Trading updates continue and we try and look past any hills to the downhill run
CTG Bottom Fishing
TRT Pain to Gain
Christie Group 110p £29.18m (CTG.L)
Financial Calander:
Year End December, Report April / Interims June, Report September
Three Largest Shareholders:
Philp Gwyn 28.93%, Lord Lee of Trafford 6.11%, Mr J P Rugg 6.00%
Key Investment Points:
Cash Disposal, Operational Leverage, Strong H2 may continue
CTG helps clients buy, operate, develop, and sell their businesses. There are two complementary business divisions: Professional & Financial Services (PFS) and Stock & Inventory Systems & Services (SISS). With 125 years of business heritage, CTG works from 33 offices across the UK and Europe. Its clients are in a wide range of sectors: catering and specialist markets in the hospitality, leisure, healthcare, medical, childcare & education and retail sectors.
After reporting losses of £3.8m for Y/E December 2023 and less than sparkling interims to June 2024, the recent trading update increased the anticipation of a sharp trading improvement. The operating profit expectations for Y/E 2024 has been upgraded because of a stronger than anticipated end of year from the Professional and Financial Services division, which has strong operational leverage. It expects to report an operating profit before exceptional items of more than £1.4m which is a £2m turnaround from the H1 operating loss of £0.6m.
PFS division’s agency and advisory business had a particularly strong H2 performance. Its finance brokerage business, which earns transaction commission, brokered the sale or purchase of over 1,100 deals in the year across its sectors. Christie Finance delivered a 40% growth in revenues and a leveraged 3x growth in profitability. Second-half operating losses from its international brokerage and advisory operations were also significantly reduced. Its Stock and Inventory Systems and Services division disposed of the loss making Orridge Holdings Ltd to RGIS Inventory Specialists Ltd for £5m cash. The disposal was a result of the strategy to improve the quality of earnings. The remaining stock auditing business, Venners, grew revenues by 14%, but its operating profit more than doubled.
The year ended with cash of £4.9m including £4m from the proceeds of the Orridge sale. The Board is
uncertain of the effect of the increased tax burden on its clients, but the underlying activity remains encouraging.
A return in 2025 to 2022’s profitability would imply a PBT of £3.3m, for a P/E of 9x with a 3.4% yield.
Hyridan Comment:
CTG’s business cycle is turning up, and we hope for a broader recovery which would accelerate its growth momentum.
Transense Technologies 157.5p £23.97m (TRT.L)
Financial Calander:
Year End June, Report September/ Interims December, Report 18 Feb 2025
Three Largest Shareholders:
Dowgate Wealth 12.00%, CriSeren 10.58%, Mr P Lobbenberg 6.37%
Key Investment Points:
Interim weakness, investment program near complete, new products launching-
The provider of specialist sensing solutions and measurement systems reported a mixed trading update for the six months to December. Its continued strong revenue growth has encouraged investment in operational capabilities and substantial investment has continued in people, facilities, equipment, and intellectual property. These key elements accelerate the conversion of the strong commercial pipelines into sales. So, while Interim revenue is 37% ahead and gross margins were maintained at 87%, the operating expenditure increased reflecting this planned investment. Consequently, net earnings are expected to be approximately 20% lower at c.£0.9m when reported on 18 February.
Thereafter, TRT should generate growth in its three business segments in this financial year and beyond.
The commercial focus of its patent protected Surface Acoustic Wave (SAW) technology is in sectors where application is proven to be beneficial. SAWsense enables strain, force, and temperature measurement which is not possible with other sensors, leading to improved equipment performance, efficiency, and safety. There are active customers such as McLaren, Airbus and GE Aerospace. The development projects have moved from small initial feasibility studies into significant funded engineering programmes to design SAW sensing technology into customers’ new products.
The two grant funded projects are progressing well, with both programmes developing new applications in automotive eDrive systems and aircraft landing gear. It was due to the substantial pipeline that the decision was made to expand the operational capability at Weston to include a pilot production line and to update the design of key unique components. This process is now largely complete, and the team is now in place to deliver future growth, without significant incremental salary costs.
Translogik is a range of tyre inspection equipment for fleet managers of trucks and buses. Revenue grew by 7% compared with the prior period, reflecting good progress in run rate business from existing customers. The pipeline of new business in negotiation and on enquiry is building, albeit the conversion to revenue is slightly behind target, though momentum is reported to be building. Translogik also expects, subject to contract, to appoint at least one distributor in North America before the end of the financial year.
Finaly, the iTrack Royalty Incomefrom Bridgestone iTrack generated income of £2.61m last year and has generated more that £7m in royalty income since the inception of the licence. The annual royalty run rate at the end of the Period was £3.34m at £/$1.22. As previously indicated, the unit rate of royalty income per installation reduces by 40% next year. Bridgestone iTrack continues to be a key strategic component of their mobility solutions business and the pipeline indicates continuing healthy growth in volumes.
Net cash at the Interims was £1.19m and is set to increase to £2.03m when the Quarterly royalty income is receivable from Bridgestone at the end of January. Profts for the Y/E June are set for c. £1.6m against £1.13m, giving an EPS of 11p and the prospective P/E of 13x.
The MD, Ryan Maughan, bought shares at 165p, taking his holding to 0.48%.
Hybridan Comment:
The mixed trading outlook caused the share price to weaken, but the Interims may give a clearer F/Y picture of the investment to grow strategy.
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