Good morning, it's Paul & Jack here with the SCVR for Thursday. Sorry I forgot to put up the placeholder at 7am, so we're running a little late.

Timing - TBC

Agenda -

Paul:

Gear4music Holdings (LON:G4M) (I hold) - another positive trading update, and brokers upgrade forecasts again. I explain why this is one of my favourite "coffee can" (long term hold) investments.

Trifast (LON:TRI) - positive year end FY 03/2021 update. Lots of interesting detail. Looks a decent company, but as with so many things at the moment, recent share price rises mean the price looks up with events.

Jack:

Solid State (LON:SOLI) - full year results to be 'ahead of the recently upgraded consensus forecasts' for this maker of rugged technology parts. Shares currently at near all-time highs.

Severfield (LON:SFR) - full year results expected to be comfortably above management's previous expectations.


Paul’s Section

Gear4music Holdings (LON:G4M)

(I hold)

835p (up 5% at 08:07) - mkt cap £175m

Year-End Trading Update

Gear4music (Holdings) plc ("Gear4music" or "the Group"), the largest UK based online retailer of musical instruments and music equipment, today announces a year-end trading update covering the 12 months to 31 March 2021.

To recap, this online business has been putting out a series of ahead of expectations updates over the last year. No doubt a beneficiary of lockdowns, but also a focus on margin improvement has seen a step change in profitability in the last year.

I reported on its last, and impressive, update here on 25 Feb 2021.

Today’s update - is another “ahead of expectations” update.

Two things strike me from the sales table below -

Firstly that Europe & RoW has now inched ahead of UK sales. Is the stock market really valuing this share as a European eCommerce business (and potentially global)? The market cap of £175m doesn’t strike me as aggressive at all, and there could be scope for a re-rating possibly, once people factor in that it’s growing into becoming a potentially global business.

Secondly, these numbers below are really quite small. £78.7m sales in the UK, and similar for Europe/RoW, must only be a smallish market share of large markets. Hence I see much more growth potential - a long runway for continued growth for…

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