Pre 8 a.m. comments

Good morning, and I hope you are all rested from the long weekend, and pleasant weather!

Things are starting to get busy again, with smaller companies beginning to report 31 March year-ends and interim period ends.

I last reported on 28 Mar on Treatt (LON:TET) saying that the shares didn't look particularly good value any more, although the 4% dividend yield is attractive. What do I know, as the shares have gone up from 420p to 490p since then! That price move looks justified now, given a very bullish trading update issued today. They are now talking about exceeding expectations for year ending 30 Sep 2013, but they don't say by how much.

So the consensus EPS forecasts of 34.7p for this year and 38.9p for next year are now too low, so at a guess we might be looking at nearer 40-50p then for the two years? That still doesn't make the shares look especially cheap at 490p, given that they are carrying a fair burden of net debt on top of the market cap.

Well done to any holders of this, but I think the big move has already been had, so I'm not going to chase it up for the last 10-20% that might be left in the tank.

 

 

21st Century Technology (LON:C21) has issued an AGM trading update which warns that sales for the current year ending 31 Dec 2013 will fall short of estimates (Stockopedia shows £17m forecast sales), and is expected to be similar to 2012 at around £14m. The reason given is that overseas customers have delayed purchases, due to difficulties and administrative delays in getting funding.

Contract delays always make me nervous, as they're usually the early sign of bigger problems, as bad news tends to be released in stages in my opinion (hence the old adage that profit warnings come in threes).

Given that they are having to fight harder for sales, C21 is "investing" £0.5m extra in "new projects, expanding out operations in the UK, and establishing specialist local sales teams in key overseas markets by approximately £0.5m in total. Excluding such investment costs, we expect the underlying profitability before tax of the Group for this year to be in line with that achieved in…

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