This week brought good news from two companies that I hold in my portfolio.
Firstly, Belgravium Technologies released their final results for the year ended 31 December 2014 which were as expected with EPS more than doubling to 0.5p from 0.22p the previous year leaving the shares on a p/e ratio of just 10 times falling to 8 times if they meet this year's forecasts. Cash generation was strong at £1.5m, and cash on the balance sheet improved from £219,000 (2013) to £731,000. The company has no debt.
I am still confident that the Belgravium share price will double this year from its 4p starting point:-
http://michae1mouse.blogspot.co.uk/2014/12/my-2015-stock-choice-will-it-double-in.html
Certainly the narrative in the final report is encouraging with John Kembery, Chairman of Belgravium, saying: "2014 was a much improved year with increased revenue and profits. The Group has made continued progress in extending its activities and offerings to cater for a wider and more discerning market. The Board believes that further progress will be achieved in the current year."
A final dividend has not been proposed, but may be paid at the interim stage depending upon the outcome of a proposed acquisition. Whilst I enjoy receiving increasing dividends, Belgravium have demonstrated that their recent acquisitions have been fairly priced, prudent and quickly earnings enhancing. In addition, any acquisition will be made with existing cash resources and bank debt. I'd anticipate that if the acquisition is successful then the EPS figure may be significantly higher than the anticipated 0.6p, otherwise investors can still look forward to a very healthy dividend and a less than demanding forward P/E ratio.
Further encouragement is provided from the fact that having established dominance in the airline industry, they are now gaining traction in the rail sector with a number of notable contracts, including First Great Western and Leo Express (Czech Republic). I look forward to news of further developments as the year progresses.
Avesco, a great favourite of mine, also released a trading statement ahead of it's AGM which stated that:- "the directors anticipate that results for the year to 30 September 2015 will be comfortably ahead of their previous expectations."
I have held shares in Avesco for a number of years,
http://michae1mouse.blogspot.co.uk/2015/01/playing-long-game.html
Two things strike me about this statement. Firstly, I have never known them release such a confident statement so early on in their financial year (just 5 months in), and secondly, as promised, they appear to be minimising the odd year dip effect that may have put off some investors in the past. Given the confident early statement, and clear forward visibility, I wouldn't be surprised to see further upgrades as the year progresses. The current p/e ratio is 13.1 for the current year falling to 8.1 in 2016. The company still trades below it's tangible NAV (backed by quality assets), and boasts a progressive dividend policy with a current yield of 4.6%.
Looking even further ahead, Avesco is likely to further dampen any odd year effect in 2017 when London hosts the World Athletics Championship. 2012 was a truly bumper year for Avesco when England hosted the Olympic games.
A pleasing week indeed, as these two growth companies appear to be going from strength to strength.
Good luck with all your investments.
