Smallcap Report - COST, JSG, CKN, MMC

Friday, Jan 04 2013 by
3

Another quiet day for RNSs. Engineering group Costain (LON:COST) issues a good solid pre-close trading statement (since their results are due to be issued on 6 March, then the Close Period starts 2 months before that, so 6 Jan).


They finished the year in line with expectations, order book slightly down on last year £2.4bn vs £2.5bn, and with over £700m of work secured for 2013 (presumably up from the "in excess of £650m secured for 2012" at this time last year, although the wording could be ambiguous, since both are in excess of a stated number).

They also have a "strong cash position and no significant borrowings".

This looks a nice steady company, churning out reliable EPS of around 30p on average each year, and a steadily rising divi (10p last year). So the expected EPS of 30p this year puts them on a PER of 8.3, and a divi yield of 4.2%. At first glance that looks fairly attractive to me, for a company which should benefit from the cyclical upturn in the economy which will happen at some point. So could be worth a further look?

Dry cleaning outfit Johnson Service (LON:JSG) puts out an in line trading statement for y/e 31 Dec. Results will be issued in early March. Interestingly, they say that the dry cleaning estate has shown LFL sales growth, "the first such increase for a number of years".

If dry cleaning is a proxy for the overall health of the economy, then this could be a reassuring sign. Although a trend I have noticed, is that with many people feeling insecure about their jobs, people are tending to dress more smartly in the office, in order to project a more professional image. When I turn up for meetings without a tie these days, I'm usually the only person in the room tie-less. Whereas a couple of years ago there were more open-necked shirts. So perhaps JSG are benefiting from a trend towards smarter office dress?

Anyway, the shares look fully priced to me, EPS forecast of 4.4p means they are on a PER of about 8.5 at 38p. Cheap? Not really, when you consider they have £59m of debt (which is 62%…

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Costain Group PLC is an engineering solutions provider. The Company offers consulting, project delivery, and operations and maintenance services. The Company operates through two segments: Natural Resources and Infrastructure plus Alcaidesa in Spain. The Infrastructure segment operates in the highways, rail and nuclear markets. The Company's Natural Resources segment includes the Company's activities in water, power and oil and gas markets. The Company offers a range of integrated services, including advisory and concept development, specialist design, program management, project delivery, technology integration and asset optimization and support. The Company offers life-cycle services to energy, water and transportation sectors across the United Kingdom. The Company provides a range of highway services, from asset inspection and assessment; scheme development; managing the statutory process; detailed design and construction; commissioning and handover, and maintenance and aftercare. more »

LSE Price
368.56p
Change
5.6%
Mkt Cap (£m)
358.8
P/E (fwd)
11.9
Yield (fwd)
3.9

Johnson Service Group PLC is a United Kingdom-based company that provides textile related services to both businesses and consumers. The Company's segments include Textile Rental and Drycleaning. The Textile Rental segment is engaged in the provision and laundering of workwear, roller towels, corporate apparel, dust mats, premium linen for the hotel, catering and hospitality markets, linen for the high volume hotel market and the direct sale of associated products. It operates Textile Rental business under the brands, including Apparelmaster, Stalbridge, Bourne and London Linen. The Drycleaning segment is engaged in the provision of drycleaning, laundry and ironing services, carpet cleaning, upholstery cleaning, wedding dress cleaning, and suede and leather cleaning. It operates Drycleaning business under the brands, including Johnson Cleaners and Jeeves. Its subsidiaries include Jeeves of Belgravia Limited, Johnson Investment Limited and Johnson Group Properties PLC, among others. more »

LSE Price
99.25p
Change
-0.5%
Mkt Cap (£m)
362.8
P/E (fwd)
13.6
Yield (fwd)
2.4

Clarkson PLC is a United Kingdom-based company, which provides integrated shipping services. The Company's segments include Broking, Financial, Support and Research. The Company's Broking division represents services provided to ship owners and charterers in the transportation by sea of a range of cargoes. It also represents services provided to buyers and sellers/yards relating to sale and purchase transactions. The Company's financial division represents service in investment banking, which specializes in maritime, oil services and natural resources sector. The Company also provides debt and leasing solutions and structured projects in the shipping, offshore and real estate sectors. The Company's support includes port and agency services, representing ship agency services provided throughout the United Kingdom and property services regarding the provision of accommodation. The Company's Research services encompass the provision of shipping-related information and publications. more »

LSE Price
2228p
Change
-0.9%
Mkt Cap (£m)
679.3
P/E (fwd)
20.8
Yield (fwd)
2.9



  Is Costain fundamentally strong or weak? Find out More »


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About Paul Scott

Paul Scott

Paul trained as an accountant, then spent 8 years as FD for a ladieswear retail chain.He became a professional small caps investor in 2002 to date.Paul writes a small caps report for Stockopedia.com on weekday mornings. He joined Fundamental Asset Management Ltd as a research associate in 2014, as part of their Small Cap Value Portfolio team. more »

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