K3 Captial (K3C)

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A group of business and company sales specialists across business transfer, business brokerage and corporate finance, serving owners across the UK in the small cap marketplace.

27-Oct-2017 – 133p – £55.7m – PER 12.4

AGM Statement – A strong start to the year in-line with management expectations. Expecting substantial profit growth in FY18.

Apart from the 6% Spread I quite like the look of this.

11-Dec-2017 – 149p – £62.9m – PER 13.7

Trading Update – Expects “Interim Results will demonstrate a continuation of the Group’s strong performance across all three divisions with significant uplifts from the comparable prior year period”. Expecting to report record revenue of approximately £7.5m, a LFL increase of 34 per cent and EBITDA of approximately £3.3m, a LFL increase of 27 per cent – Comfortably in line with market expectations for the full year ending 31 May 2018.

Quite like the look of this, it looks good value here. It’s still on my Watchlist (but I hate EBITDA, why can’t the tell us the real PBT – Arggghhhhh!) until I see the actual results.

16-Jan-2018 – 162.75p – £68.7m – PER 14.7

Interim Results For The 6 Months To End November 2017 – A strong H1. Revenue up 34% to £7.5m (£5.6m last time), EBITDA up 28%, EPS up 32% (6.14p) and the Dividend is up 217%. Momentum has continued into H2. Trading comfortably in line with management’s expectations.

I quite like this and it’s going on my Watchlist, 145p.

1-Mar-2018 – 232p – £97.9m – PER 20.4

Trading Update – Significant Year on Year growth already. Expects full-year revenue to be circa £16m, and EBITDA to be circa £7m.

Remains on my Watchlist at 145p although I reckon I will have to revise this!

12-Jun-2018 – 337p – £142.2m – PER 28.3

Trading Update – Comfortably in-line, average fee levels continue to increase, seeking FCA approval for a wholly owned subsidiary to broaden services.

This was on my Watchlist back when it was half this price. Expectations are now very high here so I have decided to sit on the sidelines for now – Neutral.

11-Sep-2018 – 327p – £137.6m – PER 27.4

Final Results For The 12 Months To End May 2018 – Revenue up 53% (£16.5m), PBT up103% (£7.3m), Net Cash up 121% (£7.5m), EPS up 114% (14.1p) and the Dividend is up56% too (11.25p). New technologies and systems should fuel future growth, 2019 trading is ahead of expectations.

A lot to like – Been on my Watchlist since it was half this price and it may be time to stop sitting on the side-lines.

Subsequent note: After further analysis I reckon this is maybe over valued by 100% on a 1 year view (as EPS growth is negative) – I am Neutral here.

11-Dec-2018 – 273p – £115.2m – PER 20.2

Trading Update For The 6 Months To End November 2018 – Achieved significant Revenue and Profit growth in H1, expecting H2 to also be strong, confirms trading in-line with market expectations.

I still consider this overvalued here (even 33% of the all time high), perhaps I have got my numbers wrong!

5-Apr-2019 – 160p – £67.5m – PER 11.6

Trading Update For The 12 Months To End May 2019 – Brexit blamed for EBITDA of between £4.5m and £5.0m.

Not sure how much of a miss this is or how much of it is built into the recent halving of the price already – I remain on the side-lines.

5-Jun-2019 – 109p – £46m – PER 7.9

Trading Update For The Period To End May 2019 – Adjusted EBITDA to be at the upper end of market guidance, Revenue to be in-line. New Year has strong pipe-line, confident for 2020.

Might provide support for a share price down 70% or so from it’s 12 month high, but not for me until I see the actuals.

17-Sep-2019 – 160p – £67m – PER 22

Results For The 12 Months To End May 2019 – Revenue down -18% to £13.6m (£16.5m), PBT down -33% to £4.9m (£7.3m), EPS down -34% to 9.43p (14.1p) and the Dividend is down -33%.

A corner may have been turned here but I am not yet fully convinced.

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