ISAS Tax reliefs are likely to be extended into AIM companies to stimulate investment in smaller companies.
FT Budget Tip.
Have you tried www.tradersown.co.uk, yet?
Shares can be bought and sold from as little as £6 a trade.
It is an informative share trading website.
Last week …
… after the recent run market’s ‘jogged on the spot’ with the FTSE 100 virtually unchanged at 6489, the FTSE 250 up 0.6% and the AIM down 0.15% at 747. A Euro-zone summit relaxed deficit targets while German Production improved 1.4% which was well ahead of target. US joblessness continued to decline and is at its lowest level for 5 years.
This week …
… is going to about raw politics thinly dressed as economics, as the annual Budget takes the spot light on Wednesday. Inflation will be reported on Tuesday with BOE Minutes and Unemployment also on Wednesday. Off centre stage the narrative and drama about Euro and US growth prospects and debt repayments will continue. The chancellors new for old policies are likely to be as threadbare as economic growth so UK markets may need inspiration from elsewhere. A weak week seems likely.
CELLO (CLL) – £36.8m at 44.75p
No more spin
It is perhaps most interesting to note that while Cello’s PBT of £7m was similar to last year, due to strong prospects the dividend was increased by 16.3%. Cello is an insight and strategic marketing group focused on Health and Consumer markets. Gross Profit (GP), which is net revenue to a marketing group, improved 5.4% to £65.1m and the top 20 clients account for 40% of GP. Cello Health performed strongly while there was a reasonable second half recovery from the restructured Consumer division. The international footprint is growing with offices in New York, Philadelphia, San Francisco, Los Angeles, Singapore and Hong Kong accounting for 46% of group GP. The organic growth of the Health division for 2013 will be supplemented with the acquisition of Marsh Heath for up to £1.5m. It specialises in providing consultancy and communications services to pharmaceutical, nutraceutical and consumer healthcare clients. Core clients include Reckitt Benckiser, GSK, BMS, Bayer, J&J and Danone. There are also plans to open an office in Chicago during the course of the current year. Profits are forecast at £7.7m giving an EPS of 6.6p and a prospective P/E of 6.8x while potentially yielding 4.8%.
Net debt was £8.7m and well within the £29m debt facilities that are in place until March 2016, cash of £6.8m was generated from operations.
ADVFN (ADVFN) – £28.8m at 4.58p
ADFVN’s interims to December 2012 showed a 57% reduction in losses to £416k, while turnover was 11% lower to £4.1m. This reflects successful cost control and the ability to raise prices suggesting a degree of client stickiness. ADVFN are an international share prices and information website with 4m users and three subsidiaries; All IPO, Throgmorton Capital and TSC Trade. The group remains highly leveraged to increasing market activity as the live price services and active bulletin board attracts frequent traders. ADVFN has however not made a profit for the last seven years and net shareholder funds have declined to £3.4m with retained losses of £11m. Around 50% of the shares are held relatively tightly. The company report that 2013 has started well and are hoping the market rallies marking the beginning of a new equity cycle as bond funding shifts into equities. ADVFNs Market Cap less its net worth of £25m represents the premium for the brand value. A reduced loss for the June 2013 full year seems most likely although breakeven remains a possibility, as the second half includes revenue from a private investor show.
There is no debt and current assets less current liabilities are £332k.
Tristel (TSTL) – £8.9m at 22.25p
Dirt no brass
Disinfection and contamination control products supplier Tristel slumped into loss in the six months to December 2012 as its older businesses declined and new operations are not growing fast enough. Tristel had already said that it was exiting the multi-channelled endoscopy business before it published its interims. The figures show that the revenues halved in the six months to December 2012 helping to cause the decline in revenues from £5.1m to £4.4m. Profit have declined into a deep loss as even before £2m of exceptional write-offs, the loss was £642k. There was also a fall in the animal health-related revenues as the switch from contract manufacturing to selling its own Anistel disinfectant products took longer than expected. NHS sales are slow but international revenues are growing strongly. Tristel expects to grow non-endoscopy revenues by 15% a year. The endoscopy revenues will continue to decline but will still make a second half contribution. Profits to June 2013 are forecasts a fall to £200k, implying a strong second half recovery, but by 2014 profits could jump to £900k for a prospective P/E of 12.4x.
Net debt at the interms was £350k but a reduced dividend is being paid despite reporting a loss suggesting some faith in a better second half.
Fairpoint (FRP) – £46.1m at 105.75p
Fairpoint reported a jump in profits from £4m to £7.6m. Revenues increased from £25.9m to £29.9m with an improved contribution from the IVA business. Its three divisions increased revenues with debt management making the smallest increase and claims management, which claims PPI compensation for IVA clients, generating the majority of the improvement, much of the growth was in the first half. As well as being a consolidator in debt management, Fairpoint also plans to expand the claims management business to provide other legal and professional services such as Mortgage mis-selling, packaged bank accounts and interest rate swaps for small businesses. Fairpoint has commenced a pilot of a lending business and further add-on acquisitions of IVA and debt management books are being sort. For December 2013 year-end a profit of £8.1m is forecast which gives an EPS of 14.4p and a prospective P/E of 7x, yielding 6.2%.
Fairpoint is a highly cash generative and helped by VAT rebates net debt of £6m became net cash of £1.8m.