Archive for the ‘General News’ Category

LPA Group – 93.5p

21 January 2020 – contract win and trading update

LPA Group, the high reliability LED lighting and electro-mechanical system manufacturer, has announced contract selection for a world leading smart LED lighting system for a prestigious European-wide Inter City rolling stock project and a further contract award for electro-mechanical assemblies, for the UK rail sector.  An update on trading confirmed that the year to 30 September 2019 was very challenging but record order entry of £27.0m was achieved and expectations should at least be met.  The timing of this announcement, with results due in the very near future, is slightly unsettling.  For now we keep our LONG TERM BUY rating but would suggest that readers wait for upcoming results before investing.

Coral Products – 7.25p

20 January 2020 – interim results

Interim results covering the six months to 31 October 2019 revealed both revenue and gross profits below the same period a year earlier.  Reported revenue was £12.1m (2018: £13.1m) and underlying EBITDA was £1.34m (2018: £1.75m).  Underlying profit before tax decreased to £485k (2018: £1.01m).  Profit before tax after taking a number of exceptional items into account was £25k (2018: £582k).   Underlying basic earnings per share fell from 0.87p to 0.26p.  Net debt increased to £8.63m (2018: £6.87m) due mainly to the adoption of IFRS 16.  We rate the shares as a SPECULATIVE BUY.

Tricorn Group – 13p

17 January 2020 – fund raising

The group is proposing to raise £1.49m before expenses through a placing and open offer of shares at 10p.  Some 10m shares will be issued to new and existing shareholders through a placing whilst there will also be an open offer to qualifying shareholders on the basis of 1 new share for every 7 shares held.  The funds raised will be used to strengthen the group’s balance sheet, provide additional working capital for growth opportunities and to help fund some capital expenditure in the USA.  We believe the sharers are a good recovery play and suggest that any shareholders TAKE UP THE OFFER.      

Northern Bear – 74.5p

16 January 2019 – acquisition

The company has announced the acquisition of J Lister, an electrical contracting business based in York which was established in 1973.  J Lister has an established customer base and offers significant growth potential, via both organic expansion of the existing business and cross selling with other Northern Bear businesses.  For the year ended 31 March 2019, J Lister achieved revenue of £2.5m and profit before tax of £0.28m.  The acquisition is set to be earnings enhancing for Northern Bear, with the initial and deferred consideration being a modest £0.95m including the issue of £0.1m in ordinary shares in Northern Bear.  There will be a further earn-out payment of up to £0.3m in cash, dependent on profits in excess of historical levels.  The shares offer exceptionally good value looking at fundamentals and must rank as a BUY.

Vertu Motors – 37.1p

16 January 2019 – acquisition

The automotive retailer has announced the acquisition of the trade and assets of four Volkswagen Passenger car dealerships in West Yorkshire from Goodman Retail Limited, a trading subsidiary of Sytner Group Limited.  Total consideration is expected to be approximately £8.8m and the acquisition should be earnings enhancing in the first full year of ownership, the year ending 28 February 2021.  The purchase of the leasehold dealerships in Leeds, Huddersfield, Harrogate and Skipton represents further expansion of the Group’s Vertu Volkswagen brand and complements 13 existing outlets in Yorkshire, which includes Nissan, Renault, Jaguar, Land Rover, Vauxhall and Honda brands.  Vertu operated 5 Volkswagen Passenger car dealerships prior to the deal.  For the year ended 31 December 2018 the combined management accounts of the dealerships acquired showed that they achieved revenues of £112m and a profit before tax of £0.6m.  There have also been some other portfolio changes recently.  On 20 December 2019 the Volvo franchise in Derby was transferred to a subsidiary of Marshall Motor Holdings plc.  The premises were retained by the Group and are currently being refurbished with a new franchise operation due to commence in the coming months.  In January 2020 two new Hyundai franchise outlets have been opened in the North East of England.  The shares continue to look significantly undervalued.  BUY.

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