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Veltyco cracking update - increase targets

By Tom Winnifrith & Steve Moore | Thursday 16 February 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Our 35p offer price share tip of Veltyco (VLTY) last month is looking good after another cracking trading update. There is more to come.…

The company updates that, further to a previous trading statement;

Trading in December continued to be strong. Based on the management accounts the board expects that the results for the year ended 31 December 2016 will be significantly ahead of market expectations with net revenues in excess of €5.7 million (2015: €2.6m) and the adjusted operating EBITDA for the full year 2016 in excess of €2.0 million (2015: € 0.7m). The board expects to publish the audited final results in April 2017.”

Broker to the company, Northland had forecasts of €1.4 million of adjusted EBITDA on revenue of €4.9 million for the year, with an adjusted pre-tax profit of more than €3 million on revenue of €8.8 million for the now current year.

Its forecasts are now under review – and we’d suggest the forward numbers now look conservative. The shares have responded to a current 41.5p – above our initial 40p limit buy price.

However, our initial target of 52.5p now looks light and we nudge the limit buy price up to 43p (which would currently represent a circa £29 million, c. €34 million market cap) and our target price to sell increases to 60p. Up to 43p, our stance remains buy.

This article first appeared on the Nifty Fifty website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next share tip from Tom & Steve and ahead of a new shorting idea from Lucian Miers this week click HERE

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