Journeo – 52.5p

10 December 2019 – trading update and placing

The information systems and transport technical services group, formerly known as 21st Century Technology, has announced a trading update and details of a placing of new ordinary shares to raise £1.2m.  Trading in the second half has been ‘satisfactory’ and results for the year ending 31 December 2019 are expected to be in line with market expectations.  Approximately £9m of new business has been confirmed in Q4 for delivery in 2020 and beyond.  In Passenger Information Systems the order book was 50% higher at the half year end versus the same time a year earlier.  Fleet Services replacement of older vehicles has been lower than the norm and this has hampered performance.  However, a number of operators have chosen to carry out higher-margin mid-life refresh of older vehicles and their on-board systems.  In the placing, 2,400,00o new shares were issued at a price of 50p each.  It is intended that the net proceeds will be used to strengthen the balance sheet to help secure pipeline prospects, to fund growth, R&D and marketing and to provide additional working capital.  The shares are a SPECULATIVE BUY.

Zytronic – 180p

10 December 2019 – final results

Results for the year ended 30 September 2019 have been released.  Group revenue was £20.1m (2018: £22.3m), impacted by a reduction in revenues in the gaming market.  Gross margin reduced to 33.7% (2018: 37.0%) due to the change in product mix sold, with fewer large format sensors being invoiced in the year, meaning that profit before tax slipped to £3.1m (2018: £4.2m).  Basic earnings per share were 16.8p (2018: 22.7p).  Significantly, the final dividend was held at 15.2p per share, bringing total dividends for the year to 22.8p (2018: 22.8p).  These are solid figures and the shares appear to have fallen too low.  We retain our BUY rating.

Coral Products – 7.5p

9 December 2019 – recycling plant status

The group has announced that its Haydock plastic recycling facility has now been granted accredited re-processor status via the UK Environment Agency and this will mean that it can reduce its operational costs by fully off-setting the plastic packaging waste levy it currently incurs.  The strong demand for clean recycled plastic will mean that the group increases the operating hours at the plant with obvious benefits.  The shares remain a BUY.

Duke Royalty – 48p

6 December 2019 – interim results

Duke Royalty, a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad, has announced interim results for the six months ended 30 September 2019.  Revenue more than doubled to £5.9m (2018: £2.7m) and positive net cash inflow from operations broadly trebled to £3.9m (2018: £1.3m).  Net profit before tax was £3.7m (2018: £1.1m).  The company entered into a new £30m revolving facility agreement with existing debt provider, Honeycomb Investment Trust PLC, on improved terms, in the period.  This provides greater financial flexibility.  After the half year end £17.45m was raised via a Placing, Open Offer and Retail Offer to build the royalty portfolio and to pay down the inherited credit facility.  During the interim period, quarterly dividends of 0.7p per share were paid to shareholders on 17 April and 0.7p per share paid on 12 July.  For the September 2019 quarterly dividend there was an increase to 0.75p per share.  This increase was in line with the company’s strategy to maintain a high and stable dividend.  The shares remain good value and a are a BUY.

Pressure Technology – 98p

5 December 2019 – postponement of sentencing

The proposed sentencing of the group on 9 December following the court case last month has now been deferred until next year.  We maintain our recommendation of BUY.

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