Morning Brief – 16-Jan-2018

Morning Brief Images 16-Jan-2018

UK Stock Market News Today – 16-Jan-2018

Morning All!

Innovaderma (IDP) – 264.6p – £38.0m – PER 17.2

Trading Update For The 6 Months To End December 2017 – Revenue up 31% (CC) to £4.2m (H1 FY2016: £3.2m), Skinny Tan in the UK doing well. The Roots™ Double Effect (“Roots”) haircare range, launched in August 2017 is growing in popularity and has performed strongly in the period. Confident of meeting market expectations for the current financial year with much greater revenue visibility for the second half than in prior years.

Good news for Skinny Tan and the new Roots product too – It seems. I am now going to add this to my Watchlist, 220p.

Communisis (CMS) – 69p – £144.5m – PER 10.5

Trading Update For The 12 Months To End December 2017 – An in-line update with Net Debtreduced to £24.3m (£30.4m last time). Pension deficit down significantly to circa £38m ( from £55.5m).

Nice to see the Net Debt and Pension Deficit down. I’m almost tempted here but will remain Neutral for now. Up almost 10% yesterday (on a massive increase in volume) suggests the insiders liked this update before we had a chance!

K3 Capital (K3C) – 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, 140p.

1PM (OPM) – 55.53p – £47.8m – PER 7.15

Interim Results For The 6 Months To End November 2017 – Revenue up 74% to £13.9m (H1 2016/17: £8.0m), PBT (and exceptional items) up 77% to £3.6m (H1 2016/17: £2.0m) EPS up 4.9% to 3.23p per share despite a significant issue of shares in the period.

I was long here previously but got cold feet and got out for a small loss. I opened a small position after a trading update. After a bit more investigation the dilution (shares in issue doubled in 3 years) which I had missed and the possibility that one bad acquisition could spell bad news meant I decided to get out of my small opening position. I know the issuance of shares is mainly to fund acquisitions but I don’t like the fact Revenue and PBT are 70%+ and EPS is up only 4.9%.

GYM (GYM) – 227p – £291.1m – PER 25.0

Trading Update For The 12 Months To End December 2017 – “Accelerated, profitable growth” is the headline. Year end membership numbers up 35.5%, Revenue up 24.3%, Net Debt of £37.5m (2016: £5.2m) following the Lifestyle acquisition and new site openings. Site numbers up 44% to 128 at year end (2016: 89) with 21 organic openings and 18 sites acquired from Lifestyle Fitness. Results to bein-line with market expectations.

Remains interesting and impressive enough but still not enough to get me off the fence.

Premier Technical Services (PTSG) – 172p – £179.8m – PER 17.4

Trading Update – In-line for 2017 and to be materially ahead of current market forecasts for 2018.

Looks interesting, it’s going on my Watchlist at 180p.

IG Design (IGR) – 391p – £241.6m – PER 17.2

Q3 Trading Update Covering The Christmas Period – Strong trading. Expects to deliver record revenues in 2018 with the continued expansion of its global footprint outside the UK which the Board expects will account for over 70% of sales. All regions on track to achieve YoY Revenue and Profit growth. EPS expected to be ahead of current market expectations.

Still liking this, it remains on my Watchlist, 380p.

Premier Foods (PFD) – 42.75p – £358.0m – PER 5.60

Q3 Trading Statement For 13 Weeks To 30-Dec-2017 – LFL Q3 and YTD Revenues up slightly, a few percent or so. Outlook is unchanged.

There’s still loads of Net Debt here (well over 100% of Mkt Cap) and the Pension Deficit is about £100m. Still can’t get excited here.

Kape Technologies (KAPE)– 72p – £98.2m – PER 17.9

Trading Update For The 12 Months To End December 2017 – In-line.

The growth looks OK here but probably fairly priced at best. Without seeing “real” profits, EBITDA only mentioned in the latest update, hard to make any kind of call. I’m going to wait to see the actuals.

Alpha FX (AFX) – 538p – £174.3m – PER 28.9

Trading Update For The 12 Months To End December 2017 – Revenue for the year is ahead of expectations and is expected to be £13.5m, Profit expected to be in-line.

No doubt this company can grow Revenue but can Profit and EPS grow at a rate to justify a PER of almost 30. I am not convinced at present.

Science In Sport (SIS) – 74p – £49.2m – PER n/a

Trading Update For The 12 Months To End December 2017 – In-line. Revenue up 28% to £15.6m (£12.2m last time), no mention of Profit/Loss.

Even if Revenue of £15.6m is achieved (up 28%) and things are in-line it means a Net Loss of -£3.88m versus a Net Loss of -£2.64m last time with EPS of -8.20p per share versus -6.21p last time. With an estimated £3.88m in Cash (strange coincidence?) according to Stockopedia – This is hardly inspiring at all. I am avoiding this one for now.

Have a great day!

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