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HB Markets Daily Smallcap Newsflash including AEA Technology, Dart Group, MBL Group and others

Published: 18:20 24 Jun 2010 AEST

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AEA Technology (AAT, 17.75p, £40.16m) Finals to March 2010 saw revenues up 21% to £113.2m (£93.7m) with adjusted PBT of £11.0m (£10.4m), EPS 4.7p (5.0p) and net debt of £26.2m (£27.3m). Encouragingly the orders book has risen to £119.2m (£84.3m), a book to bill ratio of 1.06 (0.9). The group is benefitting from the Obama greening of America, including the first significant ($45.7m) win from the US Department of Energy. Indeed, this helps the group identify a potential order pipeline around $3bn over the next 3 years. In the UK AEA appears to be reasonably well protected as it is linked to green and efficiency drives that the current Government surely must continue. With news that some areas of the UK are already facing water-pipe bans unless rain falls this week AEA’s identification of water as a major growth area is clearly well targeted. We move to a BUY with a 25p price target.

Dart Group (DTG, 55.5p, £78.38m) Finals to March 2010 saw revenues of £434.5m (£439.3m) with profit before tax of £19.1m (£28.8m) ahead of exceptions of £3.1m (£4.7m). EPS came in at 9.54p (16.97p) and the group generated £77.3m from operations leaving net cash at £51.6m (£11.8m), though that does reflect forward bookings – itself an encouraging sign. The group has declared a final dividend of 0.75p (0.71p) which with the interim of 0.36p (nil) takes the total for the year to 1.11p (0.71p) – or a year yield of 2%. Jet2.com suffered from poor demand, especially in the off-peak season to skiing destinations, partially addressed by adding far-off sun destinations and by paring back seat capacity by 7%. The Fowler Welch-Coolchain chilled and ambient food distribution business is switching to the recently acquired “Hub” in Manchester, expanding capacity to match the group’s continued customer wins. Despite the dangers of an aircraft as opposed to a passenger tax depressing all air-travel related businesses we maintain the BUY recommendation, though EPS is expected to fall towards the 9p level.

MBL Group (MUBL, 150.5p, £26.03m) has acquired a 15% stake in U-Explore Limited, an online careers advice and information provider, for £2m. MUBL will see Trevor Allan join the board of U-Explore and receive £0.1m for the first year of management services. While expanding the UK presence there is no financial information given on U-Explore – but it is hard to justify a valuation on U-Explore of £13.3m. We are unsure that the level of holding and the valuation is sensible so we drop the group from a buy to a HOLD.

Sabien Technology (SNT, 43p, £13.54m) has been awarded a contract from Greenwich Borough Council for 45 installations of its M2G boiler control systems, worth £256,360. We remain concerned regarding the over valuation and maintain the SELL.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

6 hours, 54 minutes ago