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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 Haydale, Totally and Aquila Services Group. Read about these Opportunities 4 Material Gains!
Mid-week Tip
Tangible Trading Traction
Haydale (LSE: HAYD), is a technologies and service provider facilitating the integration of graphene and other nanomaterials into the next generation of industrial materials and commercial technologies. It aims to deliver improvements to the functionality of products with electrical, thermal, and mechanical properties. These ‘premium’ products can be used in a wide range of sectors, such as aerospace, automotive, medical, sports marine and printing & coatings. Its technologies are patented in Europe, USA, Australia, Japan, and China and operates from five sites in the UK, USA and the Far East. The Interims to December 2020 reported £1.28m Revenue with a Loss Before Tax of £2m. After the recent funding at 6p net cash should be over £5m which should at least be sufficient for 12 months working capital runway. HAYD still seem a medium-term speculative buy ahead of its Interims on Monday 15th November
Results Preview
TLY – 32p- Hard to scale-up
AQSG – 26p- More Affordable
Totally (Aim: TLY) 32p t the Covid finals to March 2021 it was hard work with a PBT of £0.1m made on £113.7m of turnover which included gross margins improving to 17.8%. TLY was established to support the NHS and the need for its services has never been greater, but it operates within a tight band of cost and service delivery targets which constrains its ability to improve margins and growth. TLY would benefit from the increased use of medical technology to improve its scalability and margins. The acquisitive growth phase of the buy and build strategy has slowed to a more painstaking building phase. This Interims should, however report progress and even a moderate increase in dividend. The cash is around £15m and a total dividend of 0.5p per share was paid last year. This should be sufficient for its organic growth. An attractive sector and TLY should qualify for HIT Relief. A longer term buy.
Aquila Services Group (LSE: AQSG) 26p Aquila are an Affordable Housing consultant. Currently around 70% of its turnover is from Altair Consultancy which specialises in the provision of financing, and management of affordable housing to a diverse range of clients such as housing associations, local authorities, government agencies and other non-profit organisations. These contracts tend to be reoccurring as clients’ need an external consultant for access to Government funds. Altair’ turnover is largely in the UK. The Interims at the end of November should report a stepped improvement and a full year profit maybe on target for £0.6m would give a P/E of 16x along with an increased dividend. At the year-end to March net cash was around £2m so there is sufficient funding for planned organic growth and a [small] acquisition. A medium term buy.
Reviews
ESKN – 12.8p -Taxing to the runway
TGP – 45p- Sector Lighting-up
LOK – 863p – NAV jump
FDBK – 0.8p – Placing and open offer
WJG – 242p – Institutional demand
BMS – 261p – Shipbroking growth
W7L – 165p – Profit upgrade
RUA – 161.5p – FDA application
ITX – 6.1p – Rain damage
TPFG – 300p – Like-for-like growth of one-third
SUR – 92.5p – New boss
Finally:
Interest Rates were left unchanged in the US and UK, as it’s calculate that the Inflationary spurt just reflects post-Covid ‘realignment,’ so allowing an increase to be delayed.
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