Specifically, TP reported that based on current trading it expects full-year earnings before interest tax depreciation and amortisation to “significantly exceed current market expectations” and 2017 EBITDA is now expected to be “materially ahead of current market expectations”. Generally speaking, if management uses terminology such as “materially” and “significantly” the figures are more than 20% above (or below) current expectations. 

As well as TP’s better-than-expected trading, management also expects the group’s year-end cash position to now exceed expectations. 

For the full-year, City analysts were expecting the company to report a pre-tax loss of £0.5m but it now looks as if the group might on track to report its first pre-tax profit in nearly a decade. For 2017 analysts had pencilled-in a pre-tax profit of £0.7m on revenues of £25m. 

A record year

Today’s trading update from TP rounds off what has been a great year for the company. The company, which manufactures carbon dioxide removal equipment for submarines, heat exchangers and fabrication components, has won a number of significant contracts with large customers this year, including the Ministry of Defence, BAE Systems and most recently GE Oil & Gas. It’s these contracts that have helped power revenue and earnings above expectations for the year.  

Nonetheless, TP is still trying to recover from past mistakes. The shares remain 93% below their 2008 high of 86p and for the past seven years, the company has struggled to make a profit. 

In comparison, TP’s larger peer Cohort (LSE: CHRT) has nearly doubled revenue and grown pre-tax profits by 240% since 2012. 

Restructuring 

TP’s problems have stemmed from its exposure to the energy industry, which management has been working to diversify away from in recent years. The diversification plan seems to be working but as a defence/technology play, Cohort still looks to be the better option. 

Indeed, while Cohort generates tens of millions in revenue from defence contracts every year, the company also works with bodies such as Transport for London. The group recently signed a deal with TfL for £7m to help develop digital traffic management systems. Cohort’s earnings per share have grown by an average of 25% per year since 2012 and while City analysts have pencilled-in a modest earnings decline this year, next year growth is expected to resume. 

For 2017 the City is expecting Cohort to report earnings per share growth of 15%. 

A look at valuation 

When it comes to valuation, Cohort also looks to be a much more attractive buy than TP. At present shares in Cohort are trading at a forward P/E of 16.3 and support a dividend yield of 1.7%. 

Shares in TP trade at a forward P/E of over 100, but this is based on current forecasts. When the City has had time to digest today’s trading update from the company, its valuation may drop significantly as earnings projections are revised higher. 

The post Why TP Group plc shares soared by a quarter today appeared first on The Motley Fool UK.

Shares in specialist technology and engineering company TP Group (LSE: TPG) have risen by over 10% today, after the company continues to enjoy improved investor sentiment following its recent trading update.

With the company reporting just last week that it continued to make good progress in the final quarter of 2015, it now expects results for the full-year to be ahead of expectations. In fact, it anticipates achieving a key target for the year through being breakeven at the adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) level, which would be encouraging progress for the business.

TP Group’s share price is also benefitting from news that two of its directors yesterday purchased around 500,000 shares in the company between them. And with TP Group stating in its results that it has a strong pipeline of opportunities, providing good visibility for the business this year, investor sentiment could continue to pick up following the 30% rise in its share price in the year-to-date.

Clearly, TP Group is a small company and is therefore relatively high risk. However, it could be worth a closer look for less risk-averse investors.

Financially sound

Also rising by over 10% today is Victoria Oil & Gas (LSE: VOG). Like TP Group, it recently reported an upbeat set of results, with the Africa-focused company delivering a 73% increase in production in the final quarter of the year versus the comparable quarter of the previous year. Furthermore, Victoria Oil & Gas continues to be relatively unaffected by the slide in the oil price, reporting that it has had a minimal impact on its Gaz du Cameroun business in terms of gas price changes or customers changing back to oil.

In addition, the company reported that it has been able to maintain customers at their contracted prices and with a net cash position of $5.9m, it could prove to be relatively financially sound during a tough period for the wider industry. However, although the stock may be of interest to less risk-averse investors, with a number of other oil and gas plays being priced to sell, there may be more enticing companies to buy elsewhere within the sector.

Exceptionally volatile

Meanwhile, shares in investment company Concha (LSE: CHA) have risen by around 13% today, despite there being no news flow released in recent days. Of course, the last few weeks have been exceptionally volatile for the company’s share price, with it having fallen by 24% since the turn of the year. In fact, investor sentiment has been weak since the release of the company’s annual accounts which showed that Concha had made a loss of £628,000 for the year.

With Concha seeking new investment opportunities, it could successfully position itself for long term growth. But realistically, with only one investment at the present time, there appear to be better options available.

The post Are TP Group PLC, Victoria Oil & Gas plc And Concha PLC’s 10%+ Rises Set To Continue? appeared first on The Motley Fool UK.