3 exciting small cap results I’m monitoring closely this week

Edward Sheldon explains why he’ll be monitoring these smaller companies’ results this week.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

A host of smaller companies report final or interim results this week and there are three companies in particular that I’ll be paying close attention to, in order to assess potential investment opportunities.

Patisserie Holdings

Coffee-and-cake chain Patisserie Holdings (LSE: CAKE) reports its final results for the year ended 30th September tomorrow.

The company enjoyed an extraordinary 18 month share price run after floating in May 2014 at 170p, with the stock climbing over 180% to hit 483p in January this year. Since then, however, Patisserie shares have been locked in a firm downtrend and the stock has fallen back to around 270p. At this price, Patisserie’s P/E ratio is 24 times last year’s earnings, which is not unreasonable for a company that has grown revenues at a compounded annual growth rate (CAGR) of 22% over the last five years.

Interim results in May were strong, with group revenue up 14.4%, basic earnings per share up 21.5% and net cash of £8.9m on the books,. I’ll be monitoring full year results tomorrow to see if the company is still growing at such a fast pace. Consensus estimates are for revenue of £105.1m and earnings per share of 13.5p.

easyHotel

Budget hotel operator easyHotel (LSE: EZH) also reports its final results for the year ended 30th September tomorrow.

EasyHotel’s portfolio currently includes three owned hotels and 18 franchised ones, for a total of approximately 1900 rooms, and the company has ambitious growth plans to add significantly more hotels and rooms to its portfolio in locations such as Barcelona and Amsterdam. The company recently raised £38m to fund the roll-out strategy and tomorrow’s results are likely to give some insight into the progress of the expansion.

Interim results in May saw total revenue rise 11.6% to £2.59m and the group announced an inaugural interim dividend of 0.11p per share Consensus estimates for the full year results tomorrow are revenue of £6m and earnings per share of 1.1p.

GB Group

Lastly, identity specialist GB Group (LSE: GBG) will be releasing its interim results tomorrow and this is a set of results I’ll be paying particularly close attention to.

It’s been a rough few months for GB Group, with its share price tanking from over 350p to 230p after announcing in October that it was experiencing delays in the roll-out of its GOV.UK Verify project, despite clarifying that the board remained confident about the outlook for the full year.

I owned shares in GB Group several years ago, and made the mistake of selling my entire holding when the shares doubled from 80p to 160p. I’ve been kicking myself ever since and have been waiting for an opportunity to re-enter the stock, yet could never justify paying the kind of price multiple that the group has often traded at.  

However after the recent share price correction, GB Group now trades on a P/E ratio of 21.7 times earnings which I don’t think is that high, given the company’s excellent track record and compelling growth potential. I’ll see what the comes up in the interims tomorrow and make a decision from there as to whether it’s time to buy back into GB Group.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon has no position in any shares mentioned. The Motley Fool UK has recommended Patisserie Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Young black man looking at phone while on the London Overground
Investing Articles

Investing £3.33 into an ISA every day from 22 could result in a £60,000 passive income

Millions of Britons use the Stocks and Shares ISA as a way to build wealth and generate an income. However,…

Read more »

Investing Articles

2 resurgent cheap shares that could skyrocket in 2025

Cheap shares can take our portfolios to the next level. Here, Dr James Fox highlights two stocks that appear to…

Read more »

Investing Articles

How much does an investor need in a Stocks and Shares ISA to earn £1,000 a month in passive income?

A Stocks and Shares ISA's a valuable asset for investors. Not having to pay dividend tax can be a big…

Read more »

Investing Articles

9% dividend yield! Could buying this FTSE 250 stock earn me massive passive income?

Assura looks like an outstanding stock for dividend investors to consider. But is the 9% dividend yield the passive income…

Read more »

Man putting his card into an ATM machine while his son sits in a stroller beside him.
Investing Articles

Why I think this month could be critical for the Lloyds share price!

Our writer explains why he thinks the bank's 2024 results will have a significant impact on the short-term direction of…

Read more »

British Pennies on a Pound Note
Investing Articles

This former penny share has soared 168%. Is the best yet to come?

When Christopher Ruane saw a penny share as a potential bargain last year, he was spot on. So having not…

Read more »

Mature couple at the beach
Investing Articles

£20k in an ISA? Here’s how it could generate £1 of passive income every hour — forever

With a long-term approach, Christopher Ruane explains how an investor could aim to earn a pound per hour in passive…

Read more »

One English pound placed on a graph to represent an economic down turn
Investing Articles

FTSE shares: overpriced or still a bargain?

Christopher Ruane reckons a storming FTSE 100 performance of late doesn't tell us much about whether there are still possible…

Read more »