9th Jan 2020. 9.01am

Regency View:


Regency View:


SDI Riding High After Bullish HY Numbers

SDI Group (SDI) continues to be a standout performer in our AIM Investor portfolio, helped by a strong set of HY numbers, released pre-Christmas.

The Cambridge-based technology firm reported a double-digit rise in profit and revenue for the first half of its financial year, due to strong performances from its sensors and control businesses.

For the six months to the end of October, pretax profit rose by 27% to £1.5m on revenue that jumped by 42% to £11.5m. Of this revenue growth, 6.4% was on an organic basis while 36% came from acquisitions.

Breaking the numbers down, SDI’s sensors and control units saw turnover surge 58% to £5.8m with Sentek, Astles and Applied Thermal Control reporting double digit increases. SDI’s Digital Imaging segment rose by 29% to £5.6m, with continued growth from Atik and a contribution from recent acquisition Graticules Optics.

Chairman Ken Ford, commented:

“The Group has made a good start to the financial year. Despite the potential for economic variability, influenced by political conditions (including Brexit) and currency fluctuations, the Board is confident that our diversified portfolio of businesses is on course to deliver a full year financial performance in line with market expectations.”

SDI 9-Month Chart

SDI 9-Month Chart

FY Results to be Slightly Ahead of Market Expectations says Johnson Service

Johnson Service Group (JSG) got the year off to a flying start following a strong trading update.

The high-volume laundry specialist sighted “a year of strong strategic and operational performance” – putting them on a path to exceed market expectations.

They also announced the acquisition of Fresh Linen Holdings Limited for £12.5m.

Fresh Linen generated revenue of £16.7m and profit before taxation of £1.1m. The business, which has some 340 employees and operates from its freehold main site in Clacton-on-Sea and through a transport distribution hub in Rainham, London, regularly supplies over 900,000 items of linen a week, predominantly to hotels and gym clubs in the hospitality market in the South East of England.

On the acquisition, JSG said: The acquisition meets with our continuing growth strategy to increase the size and scale of our hospitality services in the UK and extend our geographical reach as well as further diversifying the customer profile base within the Johnsons Hotel Linen portfolio.  This transaction demonstrates our ability to acquire good quality businesses offering complementary services to our existing locations and clients.

JSG 9-Month Chart

JSG 9-Month Chart

TSG Tumble 25% Following Mineral Resource Update

Trans-Siberian Gold (TSG) plunged lower yesterday following a disappointing mineral resource estimate for its Asacha Gold Mine in Kamchatka, Far East Russia.

Its mineral resource estimate had fallen from 553,052 ounces of gold as at 31 December 2018, to 312,558 ounces as at the end of 2019. Of that reduction, 58,048 ounces was put down to mining depletion, 78,937 ounces were due to sterilisation, and 2,522 ounces were lost to rockfall.

The board said the purpose of the updates was to incorporate new data available from exploration, drilling, mining development and to account for mining depletion.

CEO Alexander Dorogov commented:

“I am pleased with the work that the team at Asacha has done to update the mineral resource estimate. We have invested heavily in improving our understanding of the ore body through a significant drilling campaign which confirms our expectations and provides the basis for better mine planning out to 2024. The resource will be supplemented by additional ounces targeted in an accelerated exploration programme as well as existing stockpiles.”

Dorogov said a new drilling campaign of about 8,000 metres around vein 25 in the east zone was already underway.

“We are confident that we have the time, capital and skills to upgrade the mineral resource at Asacha. Formal guidance for 2020 will follow shortly, but at this stage we anticipate annual gold production to be in line with recent years.”

The drop in TSG is especially disappointing given the recent strength in the underlying gold price. We will be conducting a full review of our position in TSG over the coming days and will keep you informed as to our conclusions.

TSG 9-Month Chart

TSG 9-Month Chart

Ramsdens Rally on Bullish Trading Update

Ramsdens (RFX) gapped higher on Wednesday after they released a trading update which stated that full year profits would now be “comfortably ahead” of current market expectations.

Profits derived from the purchase of precious metals were higher than previously anticipated reflecting the high gold price, while the group also said that its pawnbroking and foreign currency segments continued to produce good results.    

Additionally, the jewellery retail segment performed well both in store and online, with new jewellery sales having increased year-on-year over the peak Christmas trading period.

CEO Peter Kenyon commented:

“We are encouraged by the strong momentum across the business and, as a result, the Board now anticipates full year profits will be comfortably ahead of current market expectations.

“We are very pleased with the performance of our jewellery retail business over Christmas, both in store and online. This reflects the growing reach and recognition of Ramsdens as a jewellery retailer, and the appeal of our new jewellery products, premium watches and unique second-hand pieces as great value Christmas gifts.

“We look forward to updating our stakeholders further following the end of our financial year.” 

RFX 9-Month Chart

RFX 9-Month Chart