Morning Brief – 8-Nov-2017

Morning Brief Images 8-Nov-2017

Morning All!

Stadium (SDM) – 102.5p – £42.6m – PER 8.75

Trading Update  – Expects to report YoY Revenue increase of 15% to £61m (£53.1m last time). Customer delays mean PBT will be below current market expectations (single digit percentage growth). Increased Net Debt also expected. On the plus side, the order book is a record £32m+ (up from £25.8m at 31-Dec-2016) and double-digit revenue and PBT growth is expected next year.

On a PER of 8.75 already, any dip here could be a decent buying opportunity. Although that Net Debt of £6.54m (15% of Mkt Cap) which is expected to increase is a concern – I’m on the fence here.

Innovaderma (IDP) – 229p – £32.5m – PER 16

AGM Statement And Operational Update – Quite a bullish update but no financials mentioned. New product (Roots) will go into 521 Superdrug stores from January 2018. The Executive Chairman states that “Growth prospects remain substantial” – Of course they do!

Since floating about a year ago this share has been on a rollercoaster, from 70p to 400 to todays level. I just have no idea how to take this one. It says it wants to replicate the success of Skinny Tan (with the Roots product for example) – I just have to wonder how successful Skinny Tan has really been.

Tracsis  (TRCS) – 500p – £137.9m – PER 21.1

Audited Results For The Year Ended July 2017 – Classed as a “further period of good trading”, Revenue is up 6% to £34.5m (£32.6m last time), Pre-tax Profit is up 14% to £4.6m (£4.0m last time), Cash stands at £15.4m (£11.4m last time) and the full year Dividend is up 17% to 1.4p per share.

On a PER of 21.1 this looks fairly valued around here.

Craneware (CRW) – 1492.5p – £405.1m – PER 34.9

AGM Statement – A positive start to the 4 months of this year, well positioned to execute the growth strategy.

I do quite like this – Steady increases in Revenue, Profits and EPS here, 5%, 10% and 10% (CAGR) or thereabouts, respectively.  The ROCE is also impressive, consistently around 25% or so. There’s a small (1.5%) Dividend that’s well covered and it’s also got Cash (more than 10% of Mkt Cap).  So, there’s lots to like here but for me, the growth should be better than this to justify a PER of 34.9 – Although I did say this when the SP was 1250p and the PER was 30!

Ricardo (RCDO) – 837.5p – £443.2m – PER 13.8

Trading Update – LFL Order intake up £33m to £106m. The CEO is pleased with the start to the year and looks forward to continued progress.

Wondering why this recent update is not more upbeat. On a PER of 13.8, if this increase in order book translates to profit, this looks decent value here. Good ROCE, Operating Margin and a decent well covered 2.5% or so Dividend. The fly in the ointment could be the £37m Net Debt and £18m (I believe) pension deficit – Although at less than 15% of Mkt Cap, that doesn’t seem over the top.

Nothing overly exciting here today for me!

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