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
Friday Takeaway from UK Small Caps
This will delve a little deeper on individual companies and focus on non-house stocks under £200m market capitalisation to help raise awareness
4th July 2025
Alphabetically arranged
Share prices and market capitalisations taken from Alpha Terminal from the current price on the day of publication.
Top three shareholders are taken from the websites of the companies that we are writing about, unless there is a more up to date TR-1 notification RNS announcement.
Cautious expectations may prove the best policy for growth in the longer term
ALT University Challenge
WPHO Revenue Tacking
Altitude Group 24.5p £17.9m (ALT.L)
Financial Calendar:
Year End March, Results are expected to be reported on 29 July, Interims to September, to be reported by end of December
Top Three Shareholders:
Mr. Simon Taylor 14.00%, Mr. Martin Varley (Director) 12.95%, Mr. Keith Wills 9.22%
Key Investment Points:
Scalable growth, Attractive University niche, Improved Operational Gearing
The end-to-end solutions provider of branded merchandise to the promotions industry is expected to report Finals to March on 29 July. Ignoring the narrative, there was little evidence of the uncertainty from trade tariffs impacting business sentiment in the figures in March’s Trading update. Significant growth can be expected; with an adjusted profit before tax of £1.3m on turnover of £28m, compared to £0.7m on £24m turnover in March 2024. The gross profit margin in services declined from 90.5% to 88.5% and from 16.4% to 14.8% on Merchanting for a blended 36.5% from 43.2%. The anticipated growth in EBITDA is more pronounced from 2024’s £0.7m to the £2.7m forecast for March 2025. The net debt is £0.6m and the Company is confident that the existing Bank facility is sufficient to fund its ambitious growth aspirations.
The global promotional products marketplace is worth $26bn. Altitude provides its clients with best-in-class technology and marketing tools, as well as connecting them to its trusted network of supplier partners. Distributor members are supplied with patented ERP (Enterprise Resource Planning) in a SaaS model for an ecommerce website that helps them sell online which can include CRM (Customer Relationship Management), and Order Management Systems with a built-in supply chain platform. The established ‘merchanting’ network has 318 ‘trusted’ supplier partners from the promotional products industry; there are 2,405, distributor members with 1m plus products available for customising. Merchanting for Altitude means selling promotional products, and acting as the principal in those transactions, essentially, they buy and sell promotional items, taking on the commercial risk and responsibility for those sales.
The US Universities promotions market is proving to be a lucrative less competitive sector and is worth approximately $9bn. In March, seven new University contracts were reported with expected average revenues of $6.5 m across the full academic year. The most recent of these awarded contracts has an annualised value of $4.0m across multiple locations over a 5-year contract. The Group has been investing in people and systems to support these new programmes. We calculate that the EBITDA/EV is 7x on a prospective P/E of 15x for 2025 and the higher earnings in 2026 would benefit from improved operational gearing.
Hybridan Comment: Despite the caution this month, finals could report increasing sales momentum to MAGA (Make Altitude Grow Again).
Windar Phototonics 49.00p £47.22m (WPHO.L)
Last Reported in Friday Takeway, 28 March at 41.5p
Financial Calendar:
Year End December, Finals Reported 1 July 2025, Interims to June, to be reported by end of September
Top Three Shareholders:
Pasinika Limited (Jorgen Jenson, Director) 5.86%, Amati AIM VCT plc 4.25%,
Octopus Investments Limited 4.05%
Key Investment Points:
Sustainable Windpower, Scalable Recurring Income, Net Cash £6m
The technology Company with a LiDAR (Light Detection and Ranging) assisted Monitoring and Optimisation solution across multiple wind turbine platforms reported Finals to December 2024. Its suite of products and services are proven to efficiently increase the power output of wind turbines and reduce the lifetime operating costs of generating electricity.
Revenue as expected was marginally lower at EUR4.6m compared to revenue of EUR4.8m; the reduction was due to a EUR1.2m shipment being blown into FY2025. The gross profit margin improved to 56.4% from 50.4%, although a 34.7% increase in administration costs and £222k of exceptional charges increased the loss before tax to EUR1.08m from 2023’s EUR0.11m. After the EUR5.5m fund raise in December 2024 at 40p, the FY net cash was EUR7.1m (£6.13m) which is sufficient to increase investment in people, manufacturing and technology to support the expected step change in revenue growth as solutions are rolled out across multiple sites.
The successful launch of the Windar Nexus OS (Operating System) software suite in 2024 is being followed up with further modules delivering full Turbine Performance Monitoring (TPM) capability. Software and TPM, combined with the continued hardware evolution, provide a scalable opportunity for recurring revenue.
North America and China are key regions, but customers are reported to be cautious and there is uncertainty surrounding the timing of new orders. Particularly so in the US with some customers pausing to allow current tariff volatility to pass. A $2.5m order was won in December and the Company is expecting to announce a new order from this region soon. There are also other test orders on several turbine platforms in Europe and Japan and management is confident in obtaining its first V82 (a popular wind turbine model) windfarm rollout in Australia. Expectations for December 2026 are set at EUR9.55m revenue for an EBITDA of EUR2.35m (£2.2m) which gives an EBITDA/EV of 18x.
Hybridan Comment: The shares are 18% ahead of our mention in the Friday Takeway 28th March at 41.5p and, in the absence of winning some decent orders, the shares may drift.
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