Buy ILX, Huveaux and Hargreaves Services
A support services stalwart has captured the imagination of Charles Stanley this month. ILX Group’s acquisition of financial training concern CTG for £7 million gives ILX an ‘exciting entry into a new training sector’ according to Paul Bates. The earnings enhancing deal brings balance to a seasonal business and should double profits, he says.
Full year forecasts were upgraded on the news, with revenues hiked up by 28 per cent to £12.3 million and pre-tax profits upgraded 47 per cent to £2.4 million. Earnings should hit 9.68p and 11.72p over the next two years, placing ILX on forward multiples of only 9.7 and 8.1 at the current 93.5p, leaving the shares in strong buy territory.
Elsewhere, Bates has upgraded business publisher Huveaux to a strong buy following encouraging interim figures. The successful integration of last year’s acquisitions has significantly added to the group’s allure and Bates reckons second half prospects are positive. At 44.5p the shares trade at a discount to other small cap publishers – which he thinks is underserved – and could be worth as much as 56p.
City luminary Peter Ashworth tips minerals trading and handling group Hargreaves Services to continue its strong run in the wake of the acquisition of a tyre crumbling plant for £1 million.
A legislative change preventing tyre disposal in landfill sites means the plant is a worthy addition to the companies offering. The group has substantial long-term contracts with blue-chip clients, giving it ‘strong visibility of earnings’. Half time figures to November revealed that turnover increased 104 per cent to £70.8 million. Ashworth sees the shares – currently trading at 395p – as a buy.