Torex Retail, which supplies IT solutions to retailers ranging from Punch Taverns to British behemoth Tesco, has finished with its acquisitive gold rush for scale, having snared a swathe of blue chip clients and gained global reach.
Figures for the half to June reflected the pain of its aggressive recent acquisition strategy, with restructuring, goodwill and interest charges causing a swing from profits of £2.1m to a £3.7m loss.
However, those same acquisitions helped to drive sales 151% higher to £132m and operating profits with goodwill and exceptional items added back powered ahead by 130% to £18.2m. Long-term, the prognosis looks good, with Torex Retail having acquisitively moved into ‘all of the major markets’ around the world – there was strong first half growth across Europe and the US – and its products now spanning high street and out-of-town retailers, as well as the hospitality and petroleum sectors. Furthermore, its 6,000 plus customer relationships include global giants like McDonalds and Shell, as well as the likes of Argos and Selfridges.
Significantly, the company says that its acquisitive growth phase is now complete and it will now focus 100% on driving organic growth and superior returns from its massive customer base and impressive global reach.
The shares gave up 6.5% at 57.5p – below the 59.5p level at which Growth Company investor first recommended them – as the market took fright at the losses and the bank borrowings racked up by acquisitions. However, we still think there’s plenty of upside here on the strength of blue chip clients, gross margins of 60% plus and with organic growth now the focus. If you did not sell at stop-loss levels, then hold, as the shares look compelling fare over the long haul.
Market cap: £220.7m
PE Forecast: n/a
Share price: 57.5p
More breaking news stories.
More extended feature articles.
And a depth of analysis you
can't find anywhere else.
Advertisement
VCT Report 2010 uncovers the money available
for investment in every single VCT, helping you get one step ahead in the race to attract funding for your unquoted, AIM-listed or PLUS-quoted
company.
Order VCT Report 2010 today using this online form
A comprehensive overview of cash shells on AIM and PLUS, companies that have become a significant feature on the market landscape. For more information and to order, click here or contact our marketing team on 020 7250 7056.
Informative features and research on fast-growing companies, small-cap and growth stocks, penny shares, stock market tips and share recommendations, directors' dealings, company news and analysis, new issues and upcoming IPOs.
A full year's subscription to What Investment magazine for £19.95, a whopping 58% off. Get the latest news, features and expert advice on ISAs, Investment Trusts and Funds, SIPPS, Investing for Children and much much
more. Find out more here.
is the definitive and most up-to-date guide to completing your self-assessment tax return, making sure that you get it right and on time, and showing how you can save tax. For more information and to order, click here or contact our marketing team on 020 7250 7056.
The new, fully updated AIM Guide is now available to buy for only £49.95 (saving you £30).
A 'must-have' for any serious investor or professional interested in the market for young, fast-growing companies. Order your copy today Hurry, as offer ends soon!
Small-cap and growth company share recommendations on AIM- and PLUS-listed companies. Latest analysts' stock tips and advice on which are the best shares to buy on London's junior stock markets.
Advertisement
Delcam, the international seller of CAD/CAM software to the engineering, aerospace and healthcare sectors among others, is a cash-generative small-cap seeing recovery in its markets.
Bombed-out biotech play Antisoma is hoping two of its drugs will lead to good fortune after experiencing disaster with lung cancer treatment ASA404.
London pub operator The Capital Pub Company is seeing continuing sales growth on the back of a surprisingly resilient market.