AIM movers: Dotdigital share price recovery and Brighton Pier pleases

Andrew Hore
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AIM movers: Dotdigital share price recovery and Brighton Pier pleases

Dotdigital Group (LON: DOTD) has more than halved this year, but a positive trading statement led to a 26.9% rise in the share price to 97.8p. The email marketing company increased full year revenues by 8% to £62.8m, while operating profit and cash were better than expected. A new management team has been appointed in North America, which had been a disappointing performer. There is no change in the finnCap profit forecasts, though. It expects a small rise in pre-tax profit to £14.4m in 2022-23.

Leisure and entertainment company Brighton Pier Group (LON: PIER) beat expectations for the year to June 2022. The shares rose 6.1% to 52.5p, Adjusted EBITDA was £10.8m, which is higher than the previously upgraded forecast of £10.4m. Net debt fell from £13.3m to £6.1m. Pre-tax profit is expected to more than quadruple to £6.4m, although it was boosted by government support measures such as a temporary cut in VAT and business rate relief. The ending of the support and cost inflation means that the equivalent 2022-23 pre-tax profit is expected to fall to £4.4m on flat revenues. However, Brighton Pier intends to change its year end to December. There will be 12-month figures followed by 78-week results to December 2022.

Mobile data computing services and technology provider Touchstar (LON: TST) increased first half revenues by 7% to £3.1m, with two-fifths of these revenues recurring. The order book is 75% ahead at £1.1m. Full year earnings could be 5.5p a share and net cash is expected to be £2.4m – at least one-third of the current market capitalisation. The share price rose 7.84% to 82.5p.

Kera Resources (LON: KRS) has undertaken a consolidation of 100 shares into one new share. The share price had already been declining, but today it is the worst performer with a 19.1% fall to 4.25p. The share price had been even lower.

Advance Energy (LON: ADV), where the share price has already fallen by nearly 98% this year, has fallen by a further 11.9% to 0.0925p following a fundraising that generated £425,000 at 0.085p a share. There are warrants attached to each new share that are exercisable at 0.13p a share. The cash will enable management to find a suitable reverse takeover candidate and fund due diligence.

Cyber security services and software provider Corero Network Security (LON: CNS) reported a 22% increase in order intake to $10.9m in the first half of 2022. Annualised recurring revenues are 21% ahead at $13.6m. Despite the strong interim trading statement, the shares were marked down by 8.6% to 10.15p.

Investment company Limitless Earth (LON: LME) reported a loss of £412,000 for the year to January 2022, while NAV fell from £1.98m to £1.57m. That is well below the market capitalisation of £6.9m. The share price fell 14.3% to 9p.

Mitie Group revenues rise 3% on new contracts and acquisitions

Natasha Doris
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Mitie Group revenues rise 3% on new contracts and acquisitions

Mitie Group shares gained 0.8% to 73.9p in late morning trading on Tuesday on the back of a 3% year-on-year uptick in revenue to £945 million in Q1 2023.

The professional services group announced new contract wins, renewals and extensions worth £778 across the financial period, contributing to its revenues and serving to replace the previous revenue from Covid-related contracts the last year.

Mitie Group mentioned £203 million in new contract wins, including US Visiting Forces, Hammerson, Poundland and GSK.

Its contract extensions and renewal rates exceeded 95%, with contracts such as DIO Ascension Islands, Cyprus and Falklands contracts, Vodafone, Starbucks and Jones Lang Lasalle.

Mitie Group also reported its completed acquisitions of P2ML, 8point8 and Customer Solar in Q1, with the former two creating a “market leading” telecommunications support services business for the company.

The firm added its acquisition of Customer Solar expanded its decarbonisation offering for its customers.

The group confirmed the three acquisitions brought its total number to seven over the last year, with a combined addition of £17 million in revenue across Q1.

Meanwhile, its £50 million share buyback programme launched on 9 June 2022 was amended on 14 July to alter the volumes of shares purchased each day to between 25% to 50% of the average daily trading volumes in a move to mitigate the low liquidity of the stock and improve programme efficacy.

The group confirmed it had bought and cancelled 10.5 million shares at an average price of 60p until 22 July, at a cash cost of £6.3 million.

FY 2023 guidance

Mitie Group commented its labour and parts inflation remained a challenge going forward, however the firm said it had implemented a range of margin-enhancing initiatives to increase margins in HY2 2023.

The company added it was confident in delivering on its management expectations for FY 2023.

Compass Group revenues grow 43% in Q3 as business thrives post-Covid

Natasha Doris
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Compass Group revenues grow 43% in Q3 as business thrives post-Covid

Compass Group shares climbed 2.2% to 1,885.5p in late morning trading on Tuesday after the foodservice company reported an underlying organic revenue growth of 43.4% in Q3 2022.

The group announced a 49.7% underlying organic revenue increase in North America, along with 41.9% in Europe and 15.9% in the rest of the world, with all regions operating over 2019 levels for the financial period.

Compass Group noted its underlying operating margin rose 40 basis points from 5.8% in HY1 2022 to 6.2% in Q3.

The company also confirmed net new business expansion of 9.1%, with a 96.1% retention rate.

“Some may be disappointed that Compass have not been able to fully absorb current margin pressures, given their renowned strengths in micro-managing costs within the group,” said Hargreaves Lansdown Select fund manager Steve Clayton.

“But the bigger picture is that the group has now put the pandemic firmly behind it, has restored margins above 6% and doubled its run-rate of new business growth, whilst keeping client retention above 96%.”

The group also highlighted M&A activity totalled £223 million in the year-to-date as the company focused on expanding its brands portfolio, with an emphasis on digital innovation and delivered-in solutions.

Meanwhile, the firm mentioned £237 million of its £500 million share buyback programme had been completed so far.

“Clients found that running the staff canteen was one burden they did not need when the world fell apart in 2020 and are upping the pace of outsourcing, creating opportunities for Compass to grow,” said Clayton.

“The group are half-way through their £500m buy-back, highlighting their cash generative nature and willingness to reward shareholders.”

FY 2022 guidance

Compass Group said it was confident in its outlook, and raised its FY 2022 organic revenue growth guidance from 30% to approximately 35% on its acceleration in growth and its base business recovery.

The company also confirmed operating margin guidance of over 6% and an exit margin moderated slightly from around 7% on the back of strong net new performance and continued inflationary pressures.

Compass Group added it expected revenue and profit growth above historical rates in the longer term.

Unilever reaches €29.6bn turnover in HY1, inflation costs eat into operating margins

Natasha Doris
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0
Unilever reaches €29.6bn turnover in HY1, inflation costs eat into operating margins

Unilever shares gained 2.5% to 4,016.5p in early morning trading on Tuesday following a 14.9% climb in turnover to €29.6 billion in HY1 2022 compared to the last year.

The consumer care firm announced a 1.7% uptick in operating profit to €4.5 billion, with an operating margin fall of 200 basis points to 15.2% from HY1 2021.

Unilever reported an underlying sales growth of 8.1%, with an underlying operating profit rise of 4.1% to €5 billion and an underlying operating margin decrease of 180 basis points to 17%, driven by cost input inflation.

“It’s no surprise to see inflation and global uncertainty called out as headwinds, but importantly for Unilever work done raising prices is keeping sales and profits moving in the right direction,” said Hargreaves Lansdown equity analyst Matt Britzman.

“Having a host of strong brands is essential if any business wants to pass on rising costs, and Unilever has those up its sleeve – the ability to raise prices just shy of 10% and only have a 1.6% drop in volumes is a good place to be.”

“There’s a limit to how much someone will pay for a Magnum though, and we’ve heard from supermarkets that shoppers are now starting to slide down the value chain in an attempt to keep shopping lists intact. Juggling higher prices and weaker consumers is a tough act to nail, so far Unilever looks to be doing a decent job.”

The firm noted a diluted EPS reduction of 4.7% to €1.1, alongside an underlying EPS uptick of 1% to €1.3 compared to the year before.

The company highlighted the completion of its €750 million share buyback tranche on 22 July 2022, with the intention to launch its second tranche in Q3.

FY 2022 guidance

Unilever revised its underlying sales growth guidance for FY 2022 to above its previous guidance range of 4.5% to 6.5% as a result of higher prices with some additional pressure on volume.

The firm said it expected net material inflation for FY 2022 to remain high at approximately €4.6 billion, with its forecast for HY2 unchanged at €2.6 billion.

It also expects its FY operating margin to remain at 16%, within its guidance range of 16% to 17%.

Unilever added that it would strategise its operations to counteract the volatile market environment, and work to improve its margin in 2023 and 2024 through pricing, mix and savings.

“Unilever has delivered a first half performance which builds on our momentum of 2021, despite the challenges of high inflation and slower global growth,” said Unilever CEO Alan Jope.

“Underlying sales growth of 8.1% was driven by strong pricing to mitigate input cost inflation, which, as expected, had some impact on volume. We are now raising our sales guidance for the year. Underlying operating margin was on track at 17% for the first half.”

easyJet revenue grows to £1.7bn as summer holidays drive flight capacity numbers

Natasha Doris
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0
easyJet revenue grows to £1.7bn as summer holidays drive flight capacity numbers

easyJet shares increased 1.2% to 378.7p in early morning trading on Tuesday after the budget airline announced a revenue growth to £1.7 billion in Q3 2022 compared to £213 million in Q3 2021.

The travel group reported a passenger revenue climb to £1.1 billion from £152 million the last year, alongside a rise in ancillary revenue to £603 million against £61 million on the back of an increase in capacity flown.

Its holiday packages generated £16 million in profit over the period, and the firm recorded a sevenfold climb in passenger numbers over the previous year, with 22 million passengers flown at 87% of 2019 capacity and a high of 92% in June.

easyJet also commented its airline ancillary revenue per seat of £19.47 continued to benefit from cabin bags and bundles bringing incremental revenue.

Meanwhile, its ancillary yield per passenger of £22.07 continued to outperform pre-pandemic levels, representing a 55% climb year-on-year.

“Ancillary yields are up 55% on pre-pandemic levels as passengers seem more willing to spend on extras. This may well be caused by a new mentality sparked by the fact so many people haven’t had a foreign holiday in years, and how sticky this elevated demand will be, is not yet known,” said Hargreaves Lansdown equity analyst Sophie Lund-Yates.

“The question now is how well this new framework can be maintained as the cost-of-living crisis swells. As households continue to feel the pinch, we may well see another resurgence in the stay-cation trend seen during the pandemic as families try to economise.”

“The airlines best primed to encourage people to fly in these circumstances are those that offer reasonable rates to short and medium-haul destinations, with the added benefit of flying into more centralised airports a very real sweetener in easyJet’s toolkit.”

easyJet narrows loss

The company highlighted a headline pre-tax loss of £114 million over the financial term, marking a £204 million improvement over its £318 million loss the year before.

However, the group noted headline costs of £1.8 billion for Q3, driven by higher levels of capacity flown and £133 million in disruption costs on the back of airport chaos as pandemic restrictions eased and passengers returned to the skies.

The airline mentioned a current net debt of £200 million against £600 million year-on-year, including cash, cash equivalents and money market deposits of £3.9 billion.

FY 2022-2023 guidance

Concerning its outlook, the group noted its Q4 was currently 71% booked, with load factor slightly ahead of 2019 and sold ticket yield 13% above FY 2019.

easyJet said it expected Q4 capacity to hit 90% of 2019 levels, with load factors over 90%.

The company added it was 83% hedged for fuel in Q4 2022 at $705 per metric tonne, 60% hedges in HY1 2023 at $784 and 33% hedges for HY2 2023 at $879, with the current spot price at 22 July 2022 of approximately $1,090.

“Despite the loss this quarter due to the short-term disruption issues, the return to flying at scale has demonstrated that the strategic initiatives launched during the pandemic are delivering now and with more to come,” said easyJet CEO Johan Lundgren.

“This includes a step-change in ancillary yields, increasing 55% versus the same period in 2019, and a record profit of £16m generated in the quarter by easyJet holidays which is on track to serve 1.1 million customers in the full year.”

“easyJet expects capacity to be c.90% of Q419 across our network of major European airports, with load factors targeted above 90%.”

Serica Energy rejects higher Kistos offer

Andrew Hore
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Serica Energy rejects higher Kistos offer

Serica Energy (LON: SQZ) has rejected an increased potential offer from fellow AIM-quoted oil and gas producer Kistos (LON: KIST). The board does not think that it reflects the value of the underlying assets or their potential.
Serica Energy points to the potential from exploration drilling at the North Eigg prospect, which could have a significant resource.
The new offer is 0.4 of a Kistos share plus cash of 213p a share – 67p of cash coming from Serica Energy’s own coffers and the rest from Kistos – for each Serica Energy share. That is 425p per Serica Energy share based on a Kistos share pr...

Ebiquity revenue grows 16% as volatile market opens potential digital advertising opportunities

Natasha Doris
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1
Ebiquity revenue grows 16% as volatile market opens potential digital advertising opportunities

Ebiquity shares climbed 6.7% to 56p in late afternoon trading on Monday following a 16% revenue growth to £37 million year-on-year in its HY1 2022 trading update.

The media investment analysis group included the initial contribution from its US acquisitions of Media Management LLC and Media Path in April this year in its revenue increase.

Ebiquity confirmed its organic revenue rose 10% against the last year.

In addition, the company announced an anticipated underlying operating profit above £4.6 million, representing a 100% growth from HY1 2021.

The group noted an expected underlying profit margin improvement to at least 12%, marking an increase of 5% compared to the year before on the back of growth in higher margin digital products and improved operating efficiencies.

Ebiquity mentioned a net debt at 30 June 2022 of £12.9 million, comprised of £9.3 million in cash balances and gross debt of £22.2 million.

The group added it was currently in discussions to divest its small business subsidiary, following a previously announced review.

“We are satisfied with the Group’s performance in the first half, as we continue to deliver our strategic plan. Not only is revenue up strongly, but importantly, the improvements we have made to the business have also led to significant profit and margin growth,” said Ebiquity CEO Nick Waters.

“We are pleased with the impact of the acquisitions that we completed earlier this year, which have boosted our presence in the world’s largest advertising market of North America and have provided us with a market leading technology platform that will bring us valuable economies of scale as we continue to grow.” 

“These acquisitions are contributing as expected and their integrations are progressing well.”

Ebiquity also highlighted the potential advantage of the volatile macro-economic environment for its business operations, particularly for its digital advertising outlook going forward.

“In terms of our outlook, there is undoubtedly greater uncertainty given the increasing macro-economic challenges. While Ebiquity is not immune to these, we do see potential opportunities: in prior periods of economic uncertainty marketers have scrutinised all their media investments more thoroughly for cost, quality, and effectiveness,” said Waters.

“Marketers may also look to allocate more capital to digital advertising, which is served by our Digital Media Solutions business that is continuing to grow rapidly.”

“Notwithstanding this uncertainty, we look forward to completing another successful year in 2022 and continuing to deliver against our planned growth trajectory.”

Judges Scientific recovers from Covid, supply chain problems worsen

Natasha Doris
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3
Judges Scientific recovers from Covid, supply chain problems worsen

Judges Scientific shares fell 1.6% to 7,474.1p in late afternoon trading on Monday following the release of the group’s HY1 trading update, which reported continued recovery from the challenges of Covid-19.

However, the company mentioned worsening supply chain disruptions, as geopolitical disruption caused difficulties in managing operations across the group.

Judges Scientific highlighted an organic sales climb of 7% year-on-year, with additional progress hindered by supply chain problems and recruitment difficulties, alongside the complication of numerous staff members isolating due to Covid-19.

Judges Scientific confirmed a 4.2% increase in organic order intake, after a 25.1% gain in HY1 2021, representing a 7.8% advance from HY1 2019.

The firm’s North American market grew 15.4% following a 41% growth year-on-year, and the rest of the world saw an increase of 13.1% after an 8% climb the last year.

The rest of Europe was flat after a 34% rise in HY1 2021, reflecting a varied performance across the region.

Order intake in China and Hong Kong shrank 5.1% following a 2% growth in the previous year, as a result of continuous Covid lockdowns in the sector.

Meanwhile, the UK was down 9.4% after a 26% increase, with order intake considerably varied from business to business throughout the financial period.

The group mentioned its organic order book reached a mid-year record of 21.3 weeks compared to 17.6 weeks at 30 June 2021, linked to a modest increase in order intake and ongoing supply chain challenges.

Acquisitions

Judges Scientific also announced its recent acquisition of Geotek Holding Limited and Geotek Coring Limited for a consideration of up to £80 million, funded by a new £100 million multi-bank facility, which will provide the firm with extra capacity to support its buy and build strategy.

Outlook

Judges Scientific said it expected to meet its current FY market projections due to its strong order book and business model, despite the challenging geopolitical market environment.

Science Group achieves record year, reports strong outlook in FY 2022

Natasha Doris
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0
Science Group achieves record year, reports strong outlook in FY 2022

Science Group shares dipped 1.5% to 387.8p in late afternoon trading on Monday, despite record HY1 results which slightly exceeded board expectations.

The company confirmed revenue growth of 10% to £44.8 million against £40.7 million in HY1 2021, along with an adjusted operating profit climb of 22% to £8.8 million compared to £7.3 million.

Science Group highlighted an adjusted basic EPS increase of 10% to 14.6p from 13.3p the year before.

The firm also noted a strong balance sheet with £38.6 million in cash and net funds of £23.9 million compared to £29 million and £13 million year-on-year, respectively.

Science Group commented it was on track for another record year in FY 2022, with the benefit of sector diversification and a strong US dollar countering the volatile market outlook.

Sanderson Design Group – today’s agreement with NEXT shows it is back on track and progressing, while its shares are undervalued

Mark Watson-Mitchell
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Sanderson Design Group – today’s agreement with NEXT shows it is back on track and progressing, while its shares are undervalued

by Mark Watson-Mitchell

William Morris (1834–1896) was one of the single most influential figures of the nineteenth century. Under his direction Morris & Co. grew into a flourishing and Arts & Crafts icon. 

His ability and legend has been carried onwards very safely in the hands of the Buckinghamshire-based Sanderson Design Group (LON:SDG).

The international luxury interior furnishings Group designs, manufactures and markets wallpapers and fabrics, together with a wide range of paints and other ancillary interior products.

The company also derives licensing income from the use of its designs on a wide range of products such as bed and bath collections, rugs, blinds and tableware.

On Monday morning the company announced that NEXT has extended its licensing agreement for Morris & Co. womenswear for up to two years. 

This is the latest in a number of new agreements which help to identify that Sanderson Design is back on track and progressing steadily and impressively.

The Group’s Business

Members of the Sanderson Design Group include Sanderson, Morris & Co, Harlequin, Zoffany, Scion, Anthology, Clarke & Clarke, Archive, Anstey and finally Standfast & Barracks.

The Group has in-house manufacturing facilities, which also produce for other wallpaper and fabric brands.

The £76m capitalised company has a strong UK manufacturing base made up by the Anstey wallpaper factory in Loughborough, and Standfast & Barracks, which has a fabric printing factory in Lancaster. 

The two key brand names, Morris & Co and Sanderson, were both founded over 160 years ago.

Sanderson Design Group employs approximately 600 people, and its products are sold worldwide. It has showrooms in London, New York, Chicago, Amsterdam and Dubai.

The Renewal of Morris & Co. licensing agreement with NEXT

The initial NEXT range of Morris & Co. womenswear, which was launched in May 2021, has performed strongly since that time. 

NEXT will use new designs and colourways during the extension period to launch a further range of Morris & Co. womenswear from Autumn/Winter 2023.

The contract renewal, which starts in April 2023, includes NEXT’s in-store and online channels in the UK and Europe.

Lord Simon Wolfson, NEXT’s Chief Executive, stated that:   

“We are delighted to be renewing our licensing agreement with Morris & Co. for womenswear.  We have an excellent working relationship with the company and look forward to developing it further in the years ahead. The combination of their outstanding designs along with NEXT’s Sourcing, Online and Retail capabilities continues to deliver exciting products for our customers in the UK and beyond.”

Other recent Agreements show real strenth

In early June the Group’s Harlequin brand announced that it had signed a three-year collaboration deal with Sophie Robinson, the interior designer and TV broadcaster known as ‘the queen of colour’ owing to her passion for bright and exuberant interiors.

Sophie Robinson, whose popular TV programmes include Channel 5’s Dream Home Makeovers, will design and style a capsule collection of wallpapers and fabrics for the Harlequin brand, expected to launch in Spring 2023, using her signature bright colours and bold design.

In late May the Group announced that it had signed a sponsorship agreement with the Emery Walker Trust, the charity that preserves the London house of Emery Walker, a typographer, engraver and friend of William Morris. 

Under the agreement, the Morris & Co. brand will launch a collection of fabrics, wallpapers, bedding and homewares based on inspirational items in Emery Walker’s House, a museum to the Arts and Crafts movement.

The inspirational items in the house, in London’s Hammersmith, include original cushions, rugs, prints and ceramics, including some early Morris & Co. products such as carpet and wall hangings.

It is expected that The Emery Walker House Collection by Morris & Co. will be launched in the Spring of next year.

In early April the bedlinen and homewares company Bedeck, one of the Group’s core licensees, announced that it has renewed its licensing agreement with the Group for a further three years as expected.

Bedeck currently has exclusive rights to sell a wide range of bedlinen and towelling for the Morris & Co., Sanderson, Harlequin and Scion brands throughout the UK, Europe and Middle East. 

In addition to the renewal of those rights, Bedeck will also hold non-exclusive rights for bedlinen and towelling in the USA and Canada for the four brands.

In February the company announced that its Morris & Co brand will be launching a second collection of fabrics and wallpapers in collaboration with the influential architect and designer Ben Pentreath following the success of his first collection, Queen Square, which re-presented William Morris designs in innovative colourways.

In the same month Morris & Co. brand declared that it had signed an agreement with Harrods, one of the world’s leading luxury stores, to launch the Morris & Co. Home Emporium, a new shop-within-a-shop concept which was expected to open in Harrods’ flagship Knightsbridge store in April this year.

The Morris & Co. Home Emporium, is defined as a destination for consumers to experience the world of William Morris, selling the full breadth of Morris & Co. products across furniture, bedlinen, cushions, rugs, fabric, wallpaper, paint, tableware, throws, scarfs, and leather goods. It was also expected that a bespoke interior design service for residential or contract projects would be provided.

It was planned that the Morris & Co. Home Emporium will have an online presence on Harrods’ website, where Morris & Co. products will be available for purchase.

Towards the end of February this year the company launched an innovative paint range with colours based on historic William Morris colour recipes and documents from the extensive Morris & Co. design archive.

The new range of 40 paints, called Morris & Co. Paint, marks the first paint range to be launched by the brand since 2008, when a change in manufacturing regulations prompted the brand to discontinue its paints. Since that time, customers have frequently requested Morris & Co. paints to co-ordinate with the brand’s wallpapers and fabrics.

The Group’s Strategy

The Management’s strategy for the Group’s growth is focused on five key areas:

  • Driving the individual brands 
  • Focusing on core products of wallpaper, fabric and paint 
  • Partnering with core customers 
  • Investing in people 
  • Growing key geographies – UK, Northern Europe and the US.

The Equity

There are 70.98m shares in issue.

The larger holders include Octopus Investments (13.8%), Close Asset Management (9.36%), Ennismore Fund Management (7.67%), BGF Investments (5.99%), Schroder Investment Management (4.99%), Charles Stanley (4.95%), Interactive Investor (4.81%), Hargreaves Lansdown Asset Management (4.76%), JP Morgan Asset Management (UK) (2,78%) and Allianz Global Investors (1.83%).

AGM Trading Update

At the early July AGM, Dianne Thompson, the chair of Sanderson Design Group, stated on current trading that:

“Overall, trading at the Company in the financial year to date is broadly in line with the same period last year and profits remain on track to meet the Board’s full year expectations. The key growth trends outlined in our full year results on 28 April 2022 – including manufacturing, the Morris & Co. brand and the US – have continued strongly in the weeks following the results announcement. Licensing has also continued to perform well.

Recent progress includes a Morris & Co. licensing agreement with the Emery Walker Trust announced in May and a Harlequin collaboration announced last month with Sophie Robinson, the interior designer and TV personality. Recent product launches, including Simply Morris and Ben Pentreath’s second Morris & Co. collection, have performed well.

We continue to benefit from a strong net cash position whilst, in common with all businesses, we remain vigilant in respect of the world economic environment.”

Analyst’s View

I am grateful to David Jeary, analyst at Progressive Equity Research, who has recently updated his research comments on the Group.

“Since a leadership change in 2019, the group has been following a clearly articulated strategic framework with detailed milestones up to FY24 with a view to driving sales and profitability. 

Having initially focused on strengthening the business foundations, rightsizing the cost base and increasing business efficiencies, the group is now shifting its attention to a significant number of growth drivers. 

These include domestic and international expansion, leveraging its unique archive, increasing brand awareness, extending its licensing agreements and range extension. The group is slated to add homewares alongside its core fabric and wallpaper offering in FY24.”

For the year to the end of January 2023 he estimates that group revenues will have increased from £112.2m to £119.1m, still reflecting slowed ‘lockdown’ sales. Fully adjusted pre-tax profits, Jeary suggests, will rise fractionally from £12.6m to £13.0m for the current year, with earnings of 14.7p (13.6p) and a dividend of 3.8p (3.5p) per share.

For the coming year Progressive Equity Research estimate sales of £128.4, profits of £14.0m, earnings of 15.8p and a dividend of 4.0p per share.

Going ahead the analyst anticipates £138.4m revenues, £15.2m profits, earnings of 16.7p and a 4.3p dividend payment per share.

My View

Next week’s Interim Trading Update, due on 4th August, should be positive, despite the pressures that the group endured in lockdown.

Certainly, the renewed vigour is evident in the number of fresh agreements for the expansion of its ranges and the companies with whom it is tying up show its quality.

The above estimates clearly point out just how undervalued this cash rich group is currently with its shares trading at 107p, that is only a mere 7.9 times historic price-to-earnings and just 7.3 times current year.

A 50% advance in share price would still show them to be cheap.

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