Sunday share tips: Stobart Group, 1pm
Stobart Group shares were a 'sell' in the Sunday Times' Inside the City column, sparked by a share sale by former boss Andrew Tinkler to cut his stake to 5.3%.
The "bizarre" FTSE 250 conglomerate of Southend airport, aircraft leasing, biomass and a rail business has been hit by boardroom battles in the three years since it split from the trucking empire that made founder Eddie famous, though it still owns an eighth of that AIM-listed business.
High profile fans include Neil Woodford and Invesco, which together own 20% and 27% of the shares. At just under 285p per share, Stobart's market capitalisation is a little over £1bn. Last year the group lost £8m on revenues of £129.4m as the biomass business sold less than a third of its target, though investors were kept relatively sweet by the 6.3% dividend yield and hints of a special payout as it sells off investment properties. After Tinkler was replaced by ex Easyjet man Warwick Brady he spends more time on private equity unit Stobart Capital, which Tinkler runs independently. Brady wants to upgrade Southend airport to grow passenger numbers 40% a year to 5m by 2022.
Shares in 1pm Plc were a 'buy' for Midas in the Mail on Sunday as chief executive Ian Smith gets to grips with the small business lender and step up growth. Smith joined three years ago as chairman and has overseen six acquisitions, four of which since he moved to take the CEO role last year, when profits before tax and exceptional items rose 24% to £4.3m and are forecast to grow to roughly £8m in the year to next May. The group's combined asset and loans portfolio stood at a value of £89.5m, an increase of 32%, with bad debts accounted for a charge of £0.9m, or only 1% of the total. Smith is focused on ensuring all acquisitions are integrated and aims to more than double the market cap from £42m to £100m.
1pm's loan finance has developed with the acquisitions it has made, branching out from the soft-asset finance to help companies buy stock, to now providing loans and hard-asset finance to enable SMEs to purchase equipment, as well as invoice finance. The AIM-listed group has 152 employees serving around 16,150 SME businesses versus circa 5m or so of small businesses in the UK that are increasingly not going to their bank for a loan. Detailed analysis is taken out of client accounts and past histories before a loan is agreed and 1pm also talks to potential borrowers and goes on site visits, especially if larger sums of money are involved.