Interim results that is from Maintel (MAI) the small £65m Aim listed telecommunications company which currently Scores 90 on the Compound Income Scores and is in the Mechanical Scores Portfolio. Similar to other smaller telecoms companies like Alternative Networks (AN.) and Adept Telecom (ADT) this one has grown by doing add on acquisitions. This period was no different as they saw the benefits of last years acquisition of a firm called Proximity enhancing their results as expected.
Underlying profits were flat but earnings were up by 8%. However, this includes various cost associated with acquisitions and when they adjust for these their reported adjusted numbers show earnings up by 30% with the dividend being raised by 38% as they bring the pay out ratio up towards 50% of adjusted earnings. This was achieved on Sales up by 20% and with increased gross margins of 38.3%.
The CEO sounded pretty bullish on the back of this when he said: "After another successful period, we have never been better placed; with a broader range of services and skills we have the ability to manage highly technical transformation projects for customers. Our new sales pipeline continues to grow and being appointed as an approved supplier on the new public sector network services framework agreement offers us the opportunity to tender for business not previously available to us".
The shares have been somewhat becalmed as you can see in the chart at the end of this piece, but I guess the news flow could act as a catalyst for a re-rating as they look good value compared to other similar companies like those mentioned above (Stockopedia Subscribers see here for a comparison). If you are not a subscriber to Stockopedia see free trial details.
They currently stand at about 670p +11% today and trade on around 10x with a 4.5 to 5% yield which seems like good value to me given the growth and the bullish outlook. However be aware that it is not terribly liquid stock as it only has about 37% free float and the spread is fairly horrendous at around 6% - 630 - 670p. Finally looking at the chart and technical picture it has been stuck in a 600 - 700p range so resistance and all time highs not far away, although proximity to 12 months high can be bullish for momentum. So if it can break out of that range that might suggest it could move up into the 700 - 800p range - the top of which would still only leave it on a more reasonable looking 13x with a 3.7% yield.