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Good morning and welcome to this edition of “AIM’s Essential Top Ten”, a brief and early roundup of the main news announcements. This morning’s edition includes BRBY and JDW from the main market.
Allergy Therapeutics (LSE:AGY)
Share price: 19p. Market cap: £112 million.
Trading Update: Full year revenues up to £48.5 million, slightly ahead of market expectations. Constant currency result is +19%, better than the statutory result.
GN view: Valuation here implies continued market share growth from existing portfolio, and perhaps also some value in the pipeline. This year’s revenue result looks like it could transform the bottom line.
Ashley House (LSE:ASH)
Share price: 7.5p. Market cap: £4.4 million.
Preliminary Results: Revenues up by 147% to £20.7 million. Adjusted pre-tax profit £1.2 million (last year: loss £4.2 million). Net debt down slightly.
GN view: This developer of housing for the elderly and vulnerable looks very cheap after achieving a financial turnaround. Historic track record of profitability is patchy, sustainability of this result needs to be investigated.
Blancco Technogology (LSE:BLTG)
Share price: 193.5p. Market cap: £110 million.
Trading Update: Revenues increased 49% over the prior financial year (ended June), of which 34% was organic. Revenues and operating profits expected to be in line with market expectations.
GN view: A good result, but data erasure technology strikes me as a sector where a long-term sustainable advantage will be impossible to achieve. I also have corporate governance concerns, which make the stock uninvestable for me.
Burberry (LSE:BRBY) (I own shares in BRBY)
Share price: 1203p. Market cap: £5.35 billion.
Q1 Trading Statement: Retail revenue £423 million, unchanged. Comparable sales down 3%. All three regions had low single-digit comparable sales decline. Digital channel still growing as a percentage of sales.
GN view: Another flat/weak result. Investor attention is likely to remain focused on the potential changes under the new management regime.
Gama Aviation (LSE:GMAA)
Share price: 147.5p. Market cap: £74 million.
Trading Update: Revenues at constant currencies for the half-year will be no less than $205 million, adjusted EBITDA no less than $7.5 million.
GN view: The company says that the current share price would make equity issuance unacceptably dilutive to fund an acquisition, but that it has a strong pipeline of such opportunities. I would not be interested to invest in a company with this strategy, as there would be too much uncertainty over what I would eventually wind up owning!
Heath (Samuel) & Sons (LSE:HSM)
Share price: 277.5p. Market cap: £7 million.
Final Results: PBT £947,000, up from £443,000. Dividend increases 10%.
GN view: A frank, honest statement which acknowledges the weak comparatives versus last year and the uncomfortable size of the £6m pension fund deficit. Overall, looks like a high-quality micro-cap stock.
JD Wetherspoon (LSE:JDW)
Share price: 742.5p. Market cap: £844 million.
Trading Statement: Like-for-like sales increased 4.0% in most recent 11-week period. Year-to-date result +3.3% like-for-like, +5.5% total sales. Operating margin down slightly.
GN view: An analysis of wider implications of Brexit is included, as expected. Net debt of £670 million looks on the high side to me here. Operationally, the company is fine.
Marshall Motor Holdings (LSE:MMH)
Share price: 155p. Market cap: £119 million.
Trading Update: Record results with significant growth in performance. Acquisition of SGS was delivered as planned and is now complete. Other acquisition progressing as planned.
GN view: Looks like a cheap P/E rating at work here although the sector generally often receives a low rating. This one is carry some debt which needs to be included in the calculation.
STM Group (LSE:STM)
Share price: 35.5p. Market cap: £22 million.
Trading & Corporate Update: Profit before tax for the first half will be approximately £1.2 million based on turnover of £7.9 million, both down on the prior year. Net cash on the balance sheet of £9 million.
GN view: The company has changed its pricing policy on new business, which may benefit it in the long-run. So perhaps the weakness in this year’s result is not too important.
TP Group (LSE:TPG)
Share price: 3.875p. Market cap: £17 million.
Trading Update: Positive momentum in the first half of 2016. Strong business pipeline and order book positions. Full year results expected to be in line with market expectations.
GN view: Has previously been unprofitable, perhaps this is about to change? Looks to be involved in engineering design – I’m surprised that it is publicly listed.
