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The OMG newsletter recommends at least 15 companies each month, using the writers’ experience of small caps to give you a winning edge. Last week they wrote about Kromek, Proteome and Itaconix. Read about these Opportunities 4 Material Gains!
Wednesday Tip 20th April
SysGroup (LSE:SYS) is a multi-award winning, profitable and cashflow positive provider of Hosted Cloud Services. It serves a wide range of industries, including financial services, education, retail, gaming, insurance, and charitable organisations. Clients benefit from its ‘ the best of breed’ solutions as SYS is vendor agnostic. The organic growth strategy was being accelerated by acquisitions pre-covid. The recent Trading Update reported that Revenue for the year is expected to be approximately 7% lower at £18m but conversely, adjusted EBITDA is expected to be 3% higher a £2.9m which is ahead Interim expectations. The net cash is likely to be around £1.5m. Also undraw loan total facilities of £5.0m are available expiring in 2024 from Santander giving immediate access to draw down against acquisition with a revolving credit facility. A significant acquisition could be funded and coming out of Covid seems the right time to reignite growth with acquisitions.
Results Preview
Westminster Group plc (AIM: WSG) 4.2p (4.1p-4.3p) report Finals on Friday which will including the benefits of last December’s the oversubscribed £5m placing at 4p with warrants at 7p. The Interims, before the funding reported a 24% increase in Revenue to £7m and a PBT of £0.24m compared to an £0.8m loss demonstrating the robust business with multiple revenue streams from various sources around the world. The issue is that orders can be large and are often delayed there are currently several large-scale, long-term projects under discussion in various parts of the world, some even under signed MOUs, any of which if secured would be transformational.
French Connection (LSE: FCCN) 20.5p (20- 20.75p) report finals on Wednesday. Its distribution is grounded in bricks and mortar rather than clicks, so at the Interims to July 2020 the chairman stated that, ‘it has undoubtedly been the most difficult trading period that the Group has ever faced’….. but then it got worse. The acute Finance challenges have been solved by kicking the ‘day of debt reckoning’ into the post Covid future. The NAV is £16.2m of which £14m is an intangible ‘right of use’ licence and the stocks have built up to £26m but there is £25m that is becomes payable to creditors who force the issue.
Reviews 18th April
NBI – 107p Hoping for a power surge
CNC – 92p Pause in growth
ORPH – 43p – Non-core spin-off
BLV – 208.5p – Bucking Covid-19
BILN – 320p – Margin pressure
IOF – 12.25p – Production down, but price rises
IUG – 20.3p – Second AI-based CE mark
DNL – 71.5p – No orphan status
DEST – 167.5p – Lower than expected loss
QXT – 140p – Casinos reopening
WJG – 230.5p – Interim dip
REAT – 2.48p – Strong first half
SRC – 84p – Building growth
NFC – 800p – Good figures
Finally – The Red Flags are from the States with an Interest Rates Decision that is set to left unchanged at 0.25%, but with Increasing Consumer Confidence and GDP set to improve to 6.5% from last quarter’s 4.3%. A hint that US rates may increase could be first signal that the world Covid Recovery party is ending. In the meantime, if India is ignored the recovery party is in full swing.
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