Saga – 128.4p

21 June 2018 – trading update

A trading update covering the first four months of the financial year has been released, coinciding with the company’s AGM.  Trading has been in line with expectations.  Saga branded retail insurance policies increased by approximately 1% year on year although total retail insurance policies for the period are flat as a result of Direct Choice being discontinued in 2017.  The motor and home markets remain competitive.  Saga’s underwriter continues to perform well.  Tour bookings for 2019/20 departures were broadly the same as last year.  Bookings for the new cruise ship, Spirit of Discovery, are said to be over 55% of sales target for the first 9 months from June 2019.  The new membership scheme, Possibilities, had 740,000 members as at 17 June.  Overall the update was reassuring and we continue to rate the shares as a BUY.

RhythmOne – 212p

14 June 2018 – final results

Results for the year ended 31 March 2018 have been released and these were broadly in line with expectations.  Revenue was $255.1m (2017: $149.0m), up 71% year-on-year.  This was driven by on-platform performance and acquisitions.  Adjusted EBITDA was $14.0m, an improvement of $12.6m (2017: $1.4m).  The company is said to have made a good start to the new financial year and we keep our BUY rating. Group – 137p

14 June 2018 – acquisition

The company has announced the acquisition of Energylinx for £10m in cash, financed through existing resources.  Energylinx is a leading energy comparison and switching specialist and has commercial relationships with more UK energy suppliers than any other comparison provider.  We continue to rate the shares as a BUY.

Norcros – 222p

13 June 2018 – final results

The bathroom and kitchen accessories group which supplies showers, taps, shower trays and tiles has announced its results for the year to 31 March showing a ninth successive year of growth.  The group, which has brands including Triton, Vado, Croydex and Johnson Tiles, reported revenues up 11% to £300m (2017: £271m) whilst underlying pre-tax profits rose to £26.3m (2017: £22.9m).  Diluted earnings per share on the same basis were over 6% higher at 29.5p (2017: 27.8p) and the dividend for the year was raised to 7.8p (2017: 7.2p).  Net debt at the year end had risen to £47.1m (2017: 23.2m) following the acquisition of Merlyn, the UK’s leading supplier of shower enclosures and trays, for £59.1m.  The group has a strong platform for future growth and although the shares have at lost moved up they still look CHEAP.

Redhall Group – 7.75p

13 June 2018 – interim results

The manufacturing and services group has announced its interim results for the six months to 31 March and these have revealed a downturn in turnover to £14.7m (2017: £19.0m) as the group suffers from delays in orders and progress on certain contracts including Hinckley Point C.  As a result the adjusted loss before tax for the period was £2.13m (2017: loss of £0.26m).  These are clearly disappointing results although the order book has risen to £37m and this excludes an £18m framework agreement won by subsidiary company Jordan Manufacturing for work at Sellafield.  Senior management changes are taking place at the company and the second half is expected to produce a much improved performance.  Although the shares have been a major disappointment so far we remain optimistic that they offer significant potential and we therefore rate them as a SPECULATIVE BUY.

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