Sunday share tips: San Leon Energy, Kier Group, Franchise Brands
Sell shares in San Leon Energy, was the verdict in the Sunday Times' Inside the City column. Tuesday's shareholder vote will determine whether to complete a £170.3m fundraising that has already been conditionally agreed with backers at a price of 45p a share to buy a stake in the OML 18 Nigerian onshore oil and gas producing asset. Since listing in 2008, executive chairman Oisin Fanning has accumulated a scattered portfolio of projects for San Leon its native Ireland and Albania, Morocco, Poland and Spain.
Construction & Materials
12,314.10
16:38 14/11/24
Franchise Brands
170.50p
16:55 14/11/24
FTSE 250
20,522.81
16:38 14/11/24
FTSE 350
4,459.02
16:38 14/11/24
FTSE AIM All-Share
729.38
16:54 14/11/24
FTSE All-Share
4,417.25
16:54 14/11/24
Kier Group
150.60p
16:45 14/11/24
Oil & Gas Producers
7,938.55
16:38 14/11/24
San Leon Energy (CDI)
16.50p
17:30 24/06/24
However, all of them are still in the pre-production stage. Since 2010, the column pointed out that while Fanning has been paid €6.8m, including bonuses and shares, which is more than three times €2.1 revenue the company has drummed up in the time. As an explorer, San Leon would be more expected to locate rather than produce much, however it is now buying into a producing asset before any oil has spurted from its existing fields, though main shareholder Toscafund is backing what could be a rewarding Nigerian venture.
Shares in Kier Group are worth buying, said Questor in the Sunday Telegraph, as they appear cheap after sinking back to 2013 levels despite potential for potential for increased infrastructure spending in coming years. The stock trades on a p/e ratio of under 9.0 for the 2017 financial year, while yielding more than 7%. Full year results on Thursday are expected to show adjusted profits before tax rising almost 50% on sales up by more than a third. Since the Brexit vote the company has won access to a whopping £5bn-plus of new long-term framework contracts that provide solidity for investors, with the government's Hinkley decision providing hope that money is available for major projects as well as the motorway upgrades Kier is already banking on.
As well as the core construction business, the company has three other segments, of which services represents more than a third of group sales and property development and housing a combined 10%. Next year while the construction industry is forecast to shrink, Kier has already tied down 85% of its expected revenue. Management said the huge four-year £4bn framework agreement with the Department of Health, which begins in October but will include five other suppliers, plus framework agreements with Gatwick Airport and Cambridge University, indicate the company's ability to win work and the strength of its offering across a wide variety of sectors.
Franchise Brands is a 'buy' for Midas in the Mail on Sunday. The company is led by Stephen Hemsley, who has been part of a management team that has delivered major investor returns at Domino's Pizza UK & Ireland. Franchise Brands was built by Hemlsey and major investor Nigel Wray from the remnants of cleaning business MyHome, which the pair bought out of receivership and have turned into a group where MyHome is only a small part, with the two main brands being oven cleaning franchise OvenClean and car dents and ships repair franchise ChipsAway.
Both have 400 potential territories in the UK, of which Ovenclean has 100 franchisees and ChipsAway 225. Hemsley, who is paying himself a modest salary but has a 30% stake, is also on the hunt for new franchises to acquire. With MyHome having delisted in 2008, FRAN floated back on AIM in August and last week posted its first half-year results, which showed pre-tax profits up 18% to £0.7m on sales that were up 10% to £2.5m. For the full year, with both brands growing, the City forecasts PTP of £1.1m and a small dividend, edging up to £1.25m profits next year.
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