finnCap Research Company Notes - 30 January 2019

Jan 30, 2019 / News

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Sector: Consumer & Other

Best of the Best (BOTB) : Corp

Strong H1 = Yet another positive profit surprise

Key data                              

  • Share price (p)                  220.0
  • Target price (p)                350.0
  • Market cap (£m)                              22.2
  • Enterprise value (£m)                    20.0

Today’s strong H1 FY19 results are another positive profit surprise, following on from the two in June and November 2018. We increase our FY19 adj. PBT forecast by +12.5% to £1.8m and introduce FY20 and FY21 ests. BOTB catches the eye as one of the very small handful of consumer-facing companies delivering consistent earnings upgrades amidst a turbulent UK consumer backdrop. A Tender Offer is announced, returning up to £3.5m of surplus cash, consistent with BOTB’s broader strategy, in recent years, of returning surplus cash to shareholders.

Peter Smedley | psmedley@finncap.com

 

Sector: Financial & Insurance

STM (STM) : Corp

Building blocks firmly in place after governance upgrade

Key data                              

  • Share price (p)                  57.0
  • Target price (p)                100.0
  • Market cap (£m)                              33.9
  • Enterprise value (£m)                    17.6       

Governance upgrade is a long-term positive in helping to deliver secure growth but will come with increased costs.

Nik Lysiuk | nlysiuk@finncap.com

 

Sector: Industrials

Solid State (SOLI) : Corp

Positive trading update – 26% EPS upgrade

Key data                              

  • Share price (p)                  365.0
  • Target price (p)                475.0
  • Market cap (£m)                              30.8
  • Enterprise value (£m)                    34.9

This is a really encouraging announcement, with stronger underlying demand as well as the start of new shipments and improvements in the gross margin mix. Revenues are ahead of expectations and profits for the year are said to be significantly ahead – as such we upgrade our EPS forecast for 2019 by 26.4% and 2020 by 21.2%. We also raise our price target from 400p to 475p (up 19%). This announcement should be taken well and we see good scope for share price performance.

David Buxton | dbuxton@finncap.com

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