Brokers' view: Brewin Dolphin

The duo of Jon Lienard and James Tetley wax lyrical over the potential of tape manufacturer Scapa Group following a recent AGM statement. They remark that the company has made a ‘positive start to the year’, with revenues in line with expectations and ahead of last year as Scapa makes the ‘continuing transition towards higher-value business’.

Rating the shares as a buy, with a target price of 75p, they argue that it trades ‘at a discount to chemicals sector peers’ adding that the current discount ‘undervalues the group’s near-term recovery and long-term growth potential’.

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Lienard and Tetley also examine engineering specialist Charter following interim results, which they note are in line with the reduced expectations of June’s profit warning. Following a recent bid from competitor Melrose, the analysts remark that ‘new strategic targets have been set in an  attempt to ward off interest from predators’.

These targets include 10 per cent organic growth per year as well as working capital reductions and £38 million in cost savings. Rating the shares as a hold, with a 826p price target, they remark that it is ‘battling to retain independence but on balance we feel that this will not be achieved’.