AIM Prospector round-up w/e December 5th, 2014

5th Dec '14 by AIM Prospector

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I thought Stockopedia readers might welcome a weekly round-up of happenings in and around AIM from AIM Prospector's view.

So, here goes with the first AIM Prospector weekly missive.

Monday

Over-fifties fashion retailer Bonmarche Holdings (LON:BON) announced interims on December 1st.

http://www.investegate.co.uk/bonmarche-holdings--b...

Everything looks great:

Total revenue up 11.8% at £91.1m (H1 FY14: £81.5m)
Store LFL sales growth of 7.8%
Profit before tax of £6.4m up 68.1% (H1 FY14: £3.8m); growth of 15% on underlying basis
Profit before tax margin increased from 4.7% to 7.0% (6.8% to 7.0% on an underlying basis)
Earnings per share were 9.9p (H1 FY14: 5.2p*; 8.7p** on underlying basis)
Strong cash generation with cash and cash equivalents at half year end of £13.5m (H1 FY14: £11.3m)
Interim dividend of 2.3 pence per share

However:

Towards the end of Q2, trading conditions became more difficult due to the unseasonably warm weather. These conditions have continued into the second half; however, on the basis that the weather returns to its normal seasonal pattern, the Board expects the current year's performance to be in line with its original expectations.

So there is a warning there that the outcome for the full year will probably be less than was being hoped for a few months ago. Stockopedia has consensus normalised EPS at 19.3 for the full year and an expected dividend of 6.8p per share. That puts Bonmarche Holdings (LON:BON) on a 2015 P/E of 13.7, with a forecast yield of 2.6%. Online sales grew 50.6%. I expect that online has a lot further to go at the company.

Mattioli Woods (LON:MTW) is one of AIM's most successful companies. A trading statement from the company was issued on Monday and the Chief Executive, Ian Mattioli took some time to articulate just how significant recent rule and taxation changes will be for the industry.

These are exciting times for our clients and ourselves, with the Government finally seeing the benefit of offering individuals and their families control of their pension funds, both now and into the next generation. The freedom to access pension funds from age 55 and removal of the 55% tax-charge on death provides a real sense of ownership, and paves the way for the inheritance of pension funds…

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marben100

7th Dec '14

I met with Plastics Capital (LON:PLA) on Thursday, to discuss their results and outlook:

The fall in oil price raises the possibility of margin improvements. Apparently the shares are trading on a P/E under 10, with a 3.5% yield. That seems cheap at first glance.

I was a little disappointed by the results, but the outlook was encouraging and, as you say, makes the shares look cheap. I wouldn't expect too much impact from commodity price movements, as sales contracts/prices tend to be linked to commodity prices. There might be some slight benefit from a potential lag between input and output prices falling. Of much more significance, however, is the signature of some major contracts for their ball-bearings business. These give them 75-80% visibility over 2nd half revenues, via firm orders, which is what leads to the optimistic outlook statement and the confidence to raise the dividend.

The newly acquired Flexipol business is in the process of being integrated into Plastics Capital's stable, which should lead to some cost synergies in due course.

The business is being held back by weak conditions in a number of their markets, notably Europe. Capital and consumer discretionary spending is on the floor there. No sign of that improving yet, but when a recovery comes that could provide quite a boost.

Cheers,

Mark

Geoffers45

8th Dec '14

Mattioli Woods looks interesting but the directors have been selling an appreciable amount of shares this year.

AIM Prospector round-up w/e December 5th, 2014

Monday

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