Regency View:
Update
Begbies Traynor sees jump in profits as bankruptcies soar
Begbies Traynor (BEG) released a strong set of half year results prior to Christmas.
The insolvency specialist posted a £2.3m rise in pre-tax profits in its first half of trading with revenues jumping to £58.5m from £52.3m last year.
Begbies said they were set for further growth in the months ahead as a looming recession is sparking an increase in bankruptcies.
Insolvencies surged in the 12 months to end September as businesses collapsed under the fallout of the pandemic and soaring energy prices, hitting 20,731 in total and 23% higher than in the comparable pre-pandemic period.
Executive Chairman, Ric Traynor commented:
“We expect continued growth from business recovery and financial advisory, given its increased order book, higher level of enquiries and increasing economic headwinds”.
“We are also confident in the prospects for property advisory and transactional services, reflecting its resilient income streams, continuing flow of new instructions and potential to continue developing its mix of services.”
BEG Daily Candle Chart
Character beat expectations but warn of slowing sales
Toy maker Character Group (CCT) delivered a solid set of full year results, but warned of slowing sales in the lead-up to Christmas.
Full-year revenue jumped by a quarter to £176.4m, beating analyst estimates by 10%.
However, profitability fell by a similar percentage as rising costs saw margins contract to 5.3% (down from 8.7% in FY 2021).
“The strength of our brands and products portfolio in 2022 has enabled us to significantly increase sales despite intense margin pressure,” read the statement which accompanied the full year numbers.
However, it warned: “Trading conditions have become more challenging and sales have slowed in the lead-up to Christmas and combined with other factors will adversely affect the group’s performance in the first half of the current financial year.”
Character declared a 17p total dividend for financial year 2022, up 13% from 15p.
CCT Daily Candle Chart
CentralNic makes acquisitions and launches share buyback programme
CentralNic (CNIC) announced a small cluster of aquisitons last month and announced a maiden share buyback programme as the global internet platform company goes from strength to strength.
In mid-December, CentralNic announced that it has entered into an agreement to acquire a portfolio of revenue generating niche websites for a consideration of $5.2m in cash and assumed working capital liabilities in an asset deal from multiple sellers.
The acquisition is expected to complete immediately and will be financed from available liquidity.
On a standalone basis, the websites are expected to generate at least $1.9m in annualised revenue and $1.4m in annualised adjusted earnings (EBITDA) post-acquisition.
This news was followed by the announcement of CentralNic’s maiden share buyback programme.
CentralNic said it intends to purchase some £4m worth of its own shares through open market transactions.
It is expected that the programme will be wrapped up by no later than 30 June 2023, though it may be concluded more quickly.
CNIC Daily Candle Chart
Enwell Energy drop following new Ukrainian legislation
Shares in Enwell Energy (ENW) dropped sharply yesterday following a change in legislation in Ukraine which “may adversely affect the company’s hydrocarbon extraction licenses”.
The oil and gas producer said provisions in the legislation, which comes into force in March, will allow the Ukrainian government to suspend or revoke a mineral or hydrocarbon licence if the ultimate owner of the licence becomes the subject of sanctions from the Ukrainian government.
Vadym Novynskyi, who owns a major indirect shareholding interest in Enwell, is currently sanctioned by the Ukrainian government, meaning the company’s licences could be impacted by these new provisions.
The shares gapped below support, but have started to claw back some losses – we continue to monitor this position as the stock trades at a discount to net cash on balance sheet.
ENW Daily Candle Chart
Science group sees operating profit ahead of expectations
Science Group (SAG) released a Q3 trading update last month in which it said, “revenue and adjusted operating profit for 2022 will be slightly ahead of current Board expectations”.
The ‘science as a service’ consultancy is benefiting from the strong US dollar which has more than offset rising costs.
Science Group maintained their rock-solid balance sheet, which had gross cash of £44.5m and net funds of £30.1m at the end of November.
The trading update also announced that the company would complete its takeover of consulting and engineering services provider, TP Group early next year.
The deal “should further strengthen the group through the entry into the defence market, together with synergistic opportunities for growth in the medium term” read the statement.
SAG Daily Candle Chart
Xpediator founder bids to take logistics company private
Xpediator (XPD) shares jumped last month as it came to light that founder Stephen Blyth is plotting to make an offer to buy it from public investors.
The freight management services provider said a consortium, lead by Mr Blyth was offering 42p per share in cash, with a partial loan note alternative.
Xpediator said its board understood that the consortium intended to effect the proposal by way of a scheme of arrangement. It added it reserved the right to implement the proposal, instead, by way of contractual offer.
The consortium included the company’s largest shareholder Cogels Investments Ltd, funds managed by Baltcap, one of the largest private equity investors in the Baltic states, and Justas Versnickas, the managing director of Delamode Baltics, a subsidiary of Xpediator.
Xpediator said it understood that the consortium had received non-binding letters of support for the proposal from its two largest independent shareholders, Shaun Godfrey and Sandu Grigore, who hold 38.5m shares, representing about 37% of the shares held by independent shareholders, and approximately 27% of the total issued share capital of the company.
XPD Daily Candle Chart
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