Share prices at these two smaller companies have been flying lately and todays results show continuingpromise, despiteone or two short-term setbacks.
Wealth of opportunity
AIM-listedW.H. Ireland Group (LSE: WHI) is up 2.41% today afterposting a 24% rise in group revenue to 14.9m in Mondaysinterim results, marking a confident reboundafter recent hesitancy.
Itsshare priceis now up almost 60% from 91p to 145p over 12 months, despite reporting a pre-tax loss of3.03m in February. Todays interims for the six months to31 May show group revenue up24% to 14.9m, with the highlight a 239% rise in corporate and institutional broking transaction revenue to 2.8m. Private wealth management fee income rose 23% to 5.4m.
Right lines
As well asrestoring profitability, the firmhasbolstered itscash balance through the previously announced sale of itsManchester office.Recurring revenues are now at 45% of total revenues, with the company boasting a strong business pipeline and a rise in private wealth management assets under management to 3.1bn.Operating profit before exceptional items was 400,000.
A relatively small-scale wealth manager like this, with a total market cap of around 41m, is always going to be risky, but right now the trajectory looks promising.
Retail therapy
The market was less excited by todays update fromMcColls Retail Group(LSE: MCLS), itsshare price dipping0.96% in early trading. However, nor was it overly concerned by the fact that profits have nearly halved, from 8.2m in 2016 to 4.5m, viewing this as an exceptional one-off.
The 237m convenience retailers interim results for the 26-week period to28 May covers a timeof change and opportunity as the group integrates 298 new convenience stores acquired from the Co-op at a cost of 117m. Total revenue rose7.6% to 504.8m, up from 469.2m in 2016, as the new stores steadilyopened.
Bring me sunshine
However, like-for-like sales were flat, rising just 0.2% in the first half, although accelerating to 1.4% in Q2 on the back offavourable weather, which boostedalcohol and grocery sales. Performance in newly converted stores rose a healthier2.8% in H1, and an even better 3.8% in Q2.Gross margins crept up 90 basis points to 25.4%. Progress may be slow, but it is steady.
That sharp dropin pre-tax profits was downto 1.3m of store pre-opening costs, and 2.3m of exceptional costs, mostly professional fees and write-off of historical banking fees resulting from the Co-op acquisition and refinancing. Markets retain their faith in the firmsgrowth story, which has seen thestock rise 38% in the last year.
The Plus side
McColls chief executive Jonathan Millerexpects further profit and sales growth from the integrated stores in the second half of the year, with 700,000 customersnow holding itsPlusloyalty card. As the wider convenience and wholesale sector evolves and continues to grow, McColls is in a strong position to benefit, Miller concluded.
Trading at 16.25 times earnings, McCollsis priced for further growth, plus you get an attractive 4.95% yieldas well.
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