By Tom Winnifrith & Steve Moore | Saturday 11 March 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.
Symphony Environmental Technologies (SYM) has announced results for the 2016 calendar year and that “we expect to build on the positive momentum and are optimistic for a successful year ahead”.
The results show an adjusted pre-tax profit of £0.18 million, from a 2015 such loss of £0.99 million, on revenue 6.8% higher at £6.80 million. However, after particularly a £0.60 million net working capital outflow due to an increase in receivables, net debt increased by £0.32 million to £0.37 million.
The company noted this “primarily due to a change in terms for one of the group's major customers from letter of credit to 90-day open account, covered by credit insurance… The group has a £1.50 million trade finance facility with HSBC Bank plc, and the board do not envisage any working capital constraints should sales materially increase” - and net current assets were £0.28 million higher to £0.70 million.
The results statement added on the company’s ‘d2w’ offering that its “expectations for the short term are that more countries outside Europe will pass legislation in favour of a d2w-type oxo-biodegrading plastic solution, and that other countries who already have legislation will progress their enforcement programs” and that with regards its ‘d2p’ (‘Designed to Protect’) offering “we have more than 100 live projects in development with a wide range of customers and potential customers”.
Also noted is that its “focus will continue to be the delivery of products and technologies that create value in the near term for its shareholders” – and the shares have responded a tad higher to 8.5p, currently capitalising the company at £12.75 million.
The potential impact of further increased sales on the bottom-line performance here sees us continue to target a share price in the teens, though with the shares having already recovered from levels of around 4p earlier in 2017 and comfortably ahead of our initial recommendation, the stance is currently, at worst, strong hold.
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 TWO share tips from Tom & Steve within four weeks and ahead of a new shorting idea from Lucian Miers next week click HERE
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