14.01.2025
Filtronic (LON:FTC) - stay belted in for the ride
Yesterday’s unexpected Trading Update from this designer and manufacturer of components and subsystems for complex antennas helped to give the Sedgefield-based group’s shares a useful boost in price.
It would appear that the group’s Order Book for its products for its clients in the aerospace, defence, space and telecoms infrastructure sectors has been showing some real strength.
Certainly, it has been enough for the company to guide the market that order intake for delivery in the current financial year is at a higher rate than anticipated.
Consequently, the Board now expects to deliver stronger results for the full year than the recently upgraded market expectations.
Analysts Edward Stacey and Kimberley Carstens, at Cavendish Capital Markets, duly upgraded their current year revenue estimates by £5.0m for the period to end-May 2025, from £43.4m (£25.4m) to £48.4m, lifting their adjusted pre-tax profits to £11.5m (£3.4m) up from £9.6m.
In turn that will see the group’s earnings more than treble to 4.8p (1.4p) per share.
They have a 91.9p per share Target Price for the group’s equity.
Well, yesterday they hit 99p in early response to the good news, traded in the 94p to 97p band for the best part of the day, before closing at 101p, 10.75p up on the day, on the back of some 3.77m shares traded.
The group’s Interim Results are due to be announced on Tuesday 4th February, which is when we could see a better description of current and future expectations.
There may well be some profit-taking in the intervening period, if so then be prepared to pick up some cheap stock by dipping in on any pullbacks.
As I suggested last week, holders should stay firmly belted in for the ride.
(Profile 04.02.22 @ 11.6p set a Target Price of 14.5p*)
(Profile 04.01.24 @ 21p set a Target Price of 24p+*)
(Profile 26.06.24 @ 67p set a Target Price of 80p*)
Team Internet Group (LON:TIG) - Looking for the Verdane Offer
Just a week ago, on Tuesday 7th January, following recent media speculation, this internet services group announced that it had received two separate approaches, one from TowerBrook Capital Partners and the other from Verdane Fund Managers, regarding the making of possible offers for the company.
Both companies had previously approached the service provider with offers, which were duly considered and rejected by Team Internet’s Directors.
They both came back to the table and suggested a 125p per share cash offer for the group’s equity.
Three days later, on Friday 10th January, TowerBrook Capital, which is an active investor within the financial services sector, backed out of the fray, stating that it no longer had any intention of making an offer for the company.
The group’s shares, which had seen double average dealings the day before the first announcement, with 908,561 trades at around 90p a share, closed last Tuesday night at 118p on the back of 2,434,676 dealt.
Last Wednesday they touched 121p, not too far away from the indicated possible cash offer.
However, on Friday, after falling to 101.80p on the TowerBrook withdrawal, they closed at 103.40p, down 14.40p on the day, with almost 1.7m traded.
Last night they closed at 102.20p on 543,756 dealt.
So, what is happening with the Verdane approach – with seven offices (London, Berlin, Munich, Oslo, Stockholm, Copenhagen and Helsinski) it partners with software, tech-enabled and sustainable businesses based in Europe to help them reach the next stage of international growth.
Will Verdane get full cooperation from the Team Internet side before firming up on a sensible and viable offer?
If it does firm up, then I would look for its cash offer to be in the 125p to 135p region.
Last year, on 29th January, Team Internet issued a Trading Update for its year to its end-December period – perhaps that is when we might expect to see a deeper comment on the approaches.
In the meantime, its shares at just 102.20p look like a good gamble on constructive news or events occurring.
Just think – some six months ago its shares were up to 207.50p meaning that any bidder could well be getting in cheaply to the equity of the veritable global ‘money machine’ that generates recurring revenue from creating meaningful and successful connections: businesses to domains, brands to consumers, publishers to advertisers.
(Profile 17.04.23 @ 123p set a Target Price of 150p*)
(Profile 18.01.24 @ 124.60p set a Target Price of 156p*)
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