Thu 16 Jan 2025 - Paul Scott's Small/Mid Cap Value Report
Free: WINK, SVS, TRST, YNGA, NIOX, CABP, SRT, PEBB, DEMG Premium: LIO, CNC, IBS, TW., DNLM, ROO, SAFE, BAKK, ABDP, MPAC, SNWS, AVG, DPP, CARR, PMI.
Good morning from Paul & Dave!
This article caught my eye today, and if accurate, seems to show a dramatic change in tone from the Bank of England, and would obviously be very good news for the economy, and for our shares -
A top Bank of England official last night said interest rates may need to be cut as many as six times this year to stave off recession fears as Labour’s jobs tax bites.
Alan Taylor, a member of the Bank’s rate-setting Monetary Policy Committee, said that ‘with the economy weakening, it’s time to get interest rates back toward normal to sustain a soft landing’.
MrC's Smallcap Sweep: CAB stalls
CABP, DEMG, DFCH, DPP, CNSL, COG, CARR, AVCT, CNC, PMI, NBB, NIOX, SRT, DNLM, AVG, PEBB, MPAC, SNWS
◄CAB Payments (CABP)► warns FY-Dec gross income down 23%. Co did not see the usual seasonal uplift in H2. Cost cuts with 20% staff cuts in Q1. "CAB's fundamental business model remains robust." Well the numbers show it isn't. [SP=66.6 Cap=169m]
◄Deltex Medical (DEMG)► FY-Dec rev £2.1m (£1.8m). Cash at hand £0.24m. CEO resigns. Then the hammer blow - proposes delisting. Nurse! [SP=0.08 Cap=2m]
◄Distribution Finance Capital Holdings (DFCH)► guides FY-Dec in line, FY25 pretax ahead of market expectations. TNAV 63p+. Share buyback up to 10% of cap. [SP=37.68 Cap=68m]
◄DP Poland (DPP)► guides FY-Dec system sales up 16% and 18% LFL. Pre-IFRS16 EBITDA c. £1.2m (£0m) and post-IFRS16 EBITDA £4.8m (£3.5m). In line? Throw me a frickkin' garlic dip here.Outlook 'well-positioned'. [SP=11.25 Cap=103m]
◄Cambridge Nutritional Sciences (CNSL)► (formerly Omega Diagnostics) settles with Gov't on a "drop hands" basis. Legal costs £0.2m. £2.5m of 'Deferred Income' will become 'Other exceptional Income' for FY25. [SP=2.94 Cap=7m]
◄Cambridge Cognition (COG)► expansion of its partnership with Actinogen Medical in the Phase 2b/3 Alzheimer's trial. Plenty of leveraging of solutions going on. No £££. [SP=39.69 Cap=17m]
◄Carr's (CARR)► sells Engineering Division for £75m = 7.1x FY24 adj EBITDA. Co will return £70m max via a tender. Pension scheme buy-in near finalisation, with de-risking expected to be in place by the second half of FY25. [SP=113.5 Cap=108m]
◄Avacta (AVCT)► positive result from AVA6000 Phase 1 salivary gland cancer trial. Only 10 patients though. [SP=49.75 Cap=184m]
◄Concurrent Technologies (CNC)► guides FY-Dec rev and pretax c.0% ahead of market expectations of £36m and £4.7m. CEO chirrups "The transformation we've achieved over the past three years has been remarkable". [SP=138.5 Cap=119m]
◄Premier Miton (PMI)► AuM £10.7bn at 31 Dec, unchanged from Sept. [SP=60.88 Cap=96m]
◄Norman Broadbent (NBB)► Q4-Dec net fee income £2.5m(£2.6m), 10% above Q1-3. "Positive momentum has continued into 2025 with contracted revenues up 40% year-on-year to £2.1m (£1.5m)." [SP=3.35 Cap=2m]
◄NIOX (NIOX)► guides FY-Dec rev up c.14%. Adj EBITDA slightly ahead of consensus at c.£13.8m. Cites strong core Clinical business. Outlook positive. [SP=58.4 Cap=232m]
◄SRT Marine Systems (SRT)► guides H1-Dec rev £25.5m (£5.5m) and pretax £2.5m (-£4.6m). That's just a sample of the jam tomorrow. I hold. [SP=44.2 Cap=111m]
In line: DNLM, AVG, PEBB, MPAC, SNWS
Colour-coding - several readers have asked for an explainer of my colour-coding system, so last night I figured out how to create pages with standing information. Hence there is now a new heading at the top of the home page menu. Click on that, and up comes a page explaining how my colour-coding works, which I hope might prove helpful. It’s an updated version of the “explanatory notes” that I wrote for my old Stockopedia articles.
The best in the business, Christopher Mills!
Winkworth (WINK)
Minnow franchised estate agents which I briefly commented on yesterday. Its outlook comments were interesting, which I forgot to copy into yesterday’s report, so here it is, which I think sounds encouraging for a continued recovery in the residential property market (and eventually housebuilders too, where I’ve this week turned bullish on the sector for a recovery - see Persimmon section here on Tues) -
“With buyers having been motivated by real wage growth and the anticipation of lower interest rates, we expect activity to remain positive in FY 2025, with a particular weighting to Q1 as first-time buyers look to transact prior to the ending of the stamp duty discount in April 2025.”
Savills (SVS)
Following on from minnow Winkworth, Savills is a £1.5bn market cap international property services group, so their outlook comments might be of wider interest. Today it says -
“In the year ahead, challenging macro conditions are expected to continue for some time; however, most markets are in recovery and as we enter 2025, whilst current financial markets are characterised by uncertainty, sentiment has turned to expectations of progressive reductions in the cost of capital being likely during the year. We expect re-financing driven activity, the sustainability agenda and the trend towards corporates requiring greater office attendance for staff, to continue to be positive for transaction volumes. These factors lead us to expect continued improvement through 2025.”
Quite encouraging!
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