Event review: AIM Investor Focus October 23rd saw the Blackthorn Focus event AIM Investor Focus run for the fifth time. Five companies were present on the day. Each met with an AIM Prospector staff writer. Here is the lowdown on all five.
In the last five years, defence supplier Cohort plc has grown net profits from £3.8m to £5.9m. In that time, the dividend per share has been increased five years running: from 1.2p for 2009 to 4.2p for 2014. The market forecasts further significant profit and dividend increases in the next two years. The positive outlook given in the Cohort management presentation at AIM Investor Focus further underlined the growth potential. Cohort is a group of four companies: MASS, technical consultancy for the education and military sector; SEA, systems, software and electronic engineering services particularly for the submarine fleet (recently beefed up with the September acquisition of J+S); SCS, advisory services to the MoD; and MCL, acquired in July, which delivers electronic communications and surveillance technology. The company has a strong balance sheet, with a net cash position of some £4m, even after the purchase of J+S for £12m. Cohort’s biggest customer is the MoD. The company is well embedded in the submarine manufacture sector, which remains a growth area. The business is thus positioned to deliver long-term, 10
sustainable operating margins, generating the cashflow required to support further acquisitions and/or dividend increases.
that was recruited following a 2007 acquisition. The company’s market valuation remains attractively modest relative to both small and large-cap IT Services sector peers.
SCISYS is a computer software supplier to specialist industry (media broadcast, defence etc). The company has steadily improved operating margins over the past six years and has increased its dividend to shareholders every year for the last four years. In that time, net profits have increased almost fourfold. In their presentation at AIM Investor Focus, management confirmed their hope to bring in revenues exceeding £60m at double-digit operating margins by 2018. According to Stockopedia, the market is forecasting a double-digit increase in earnings per share for 2014. SCISYS’ recent half-year results showed a 19% increase in adjusted earnings per share and a 10% dividend hike. SCISYS is strongly cash generative and achieved an operating margin of 7.6% in 2013, demonstrating the completion of its operational rehabilitation following the demerger of CODA in 2006. Much of the recent strong financial performance has been down to the management team
After many years listed on PLUS/ISDX, fire safety products firm Sprue Aegis joined AIM in April 2014. In 2008, revenues were £9.4m and net profit was £1.1m; for 2013, revenues were £48.4m and net profits hit £4.2m. The company declared a maiden dividend of 0.5p for 2009 and the payout has increased every year since, reaching 6p for 2013. 2014 interims revealed sales up 11% and a 34% increase in earnings per share; net cash was £11m and a 2p maiden interim dividend was announced. At the AIM Investor Focus presentation, management confirmed the continuing strong markets in France and Germany with a record order book extending into 2015. For Sprue’s 2014 full year, the market is forecasting a 20% increase in sales to £60m and a jump of over 70% in net profits to £7.5m. Whilst growth in sales and profits will be more modest from 2015 onwards, the magnitude of future growth will likely remain significant enough to justify www.aimprospector.co.uk
Published on Nov 6, 2014
Published on Nov 6, 2014
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