Good morning, it's Paul & Jack here with the SCVR for Wednesday.

Timing - we're both on the case early, so should be done by 1pm.

Agenda -

Paul -

Norcros (LON:NXR) - a positive trading update, with clear guidance, profit up about 10% on previous guidance, which should trigger broker upgrades. Still looks good value, even after strong recent rise.

Topps Tiles (LON:TPT) - H1 trading update. Good Q1, weak Q2 (due to store closures from lockdown). Overall, looks priced about right to me, I can't get excited about this share because the company was struggling before covid.

Deliveroo - IPO has flopped. My comments on IPOs generally.

Cloudcall (LON:CALL) (I hold) - FY 12/2020 results. Costs are rising faster than gross profit, and that's set to continue in 2021. Not good.

Jack -

Gattaca (LON:GATC) - FY20 Covid hit for this engineering and technology recruiter, but improving leading indicators suggests rerate could continue. US Department of Justice risk remains a concern.

Aquis Exchange (LON:AQX) - maiden profit and successful integration of NEX exchange

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Paul’s Section

Norcros (LON:NXR)

256p (pre market open) - mkt cap £207m

Norcros plc ("Norcros" or the "Group"), a market leading supplier of high quality and innovative bathroom and kitchen products, today issues an update on recent trading.
Further upgrade: strong momentum sustained…
a further improvement in profitability. Consequently, the Board now expects underlying operating profit for the year to 31 March 20211 to be no less than £31m on a post-IFRS 16 basis which compares to our previous underlying operating profit guidance for the year of no less than £28m.

Very good. Nice clear guidance.

Net debt - has disappeared!

The balance sheet remains very strong, and we expect to end the year at 31 March 2021 with no net debt (on a pre-IFRS16 basis) compared to net debt of £36.4m at 31 March 2020.

We’re not told if there’s any creditor stretch, or whether this is a sustainable position.

Valuation - Norcros’s interim results (6m to 30 Sept 2020) showed underlying operating profit of £12.8m. Full year guidance is now £31.0m+, which implies a strong H2 performance of c.£18.2m u/l operating profit.

My sums show that this approximates to 26p EPS for the full year.

Reasonableness check - existing broker consensus…

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