United Carpets Group – 8.625p

14 December 2017 – interim results

Interim results for the six months to 30 September 2017 have been released.  Revenue for the period was £9.97m (2016: £10.20m) but like-for-like sales were up 2.9%.  The average number of corporate stores was reduced compared to the same period in the prior year.  Profit before tax was £589k (2016: £640k) and earnings per share were 0.57p (2016: 0.66p).   An interim dividend of 0.135p per share (2016: 0.13p) was declared.  Having paid a special dividend of £0.8m in May 2017, net funds were £1.64m (2016: £1.80m).  Like-for-like sales since the period end have shown further improvement on the first half performance, which is encouraging.  We continue to believe the shares are cheap and the company is fundamentally undervalued.  BUY.

Synectics – 200p

12 December 2017 – trading update

The surveillance and security company has issued a trading update covering the year to 30 November in which it has stated that underlying pre-tax profits are likely to be 10% higher than the previous year on revenues that were broadly flat.  Thus pre-tax profits are likely to be £3.0m for earnings per share of some 14.5p.  The increase in profits is due to higher margins at the group whilst the net cash position has increased with the net cash balance at the year end being £3.9m compared with £2.2m a year earlier.  Further growth is expected in the current year and we believe that the recent share price weakness makes the shares ATTRACTIVE.

Headlam Group – 528p

7 December 2017 – trading update and acquisition

A trading update covering the 10 months to 31 October 2017 has been released.  Trading was positive and total revenue growth was 2.7% versus the same period a year earlier.  The acquisition of Domus, the UK’s leading specification consultant and supplier of hard surfaces for premium construction and refurbishment projects, has also been announced.  The total maximum consideration is £35.4m.  In 2016 Domus generated profit before tax of £2.9m on revenue of £29.6m.  Hence the deal has been completed on sensible terms.  We rate the shares as a BUY.

Redhall Group – 7.25p

6 December 2017 – final results

Revenue from continuing operations in the year ended 30 September 2017 were £38.9m (2016: £43.8m).  Adjusted operating profit before exceptional items was £1.4m (2016: £0.9m).  Adjusted diluted earnings per share for the continuing business amounted to 0.20p (2016: nil).  Following a placing and debt conversion in July and capital reduction in September, the balance sheet is much stronger.  At the year end net cash was £0.1m (2016: net debt of £8.2m).  Net assets at 30 September 2017 were £30.0m (2016: £15.5m) reflecting the net proceeds of the placing and the debt conversion of £12.6m as well as a reduction in the pension deficit to £0.5m (2016: £3.8m).  The company appears to have come through a tough period and although challenges remain we believe the shares are a BUY at this level.

Tricorn Group – 23.25p

6 December 2017 – interim results

Revenue for the first half of the financial year was £11.4m (2016: £8.9m).  Operating profit broadly doubled to £388k (2016: £187k).  After finance charges the underlying profit before tax was £370k (2016: £4k).  Underlying earnings per share were 1.00p (2016: 0.01p) and after deducting non-underlying items basic earnings per share were 0.66p (2016: loss per share 0.74p).  The company is clearly moving in the right direction and especially given the low market capitalisation we feel that there is scope for considerable growth over the longer term.  BUY.

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