Microcap soared after announcing a hefty increase in EPS and pre-tax profit forecasts

Companies: SpaceandPeople plc



SpaceandPeople shares rocketed 46% this morning after the microcap told investors that trading in the first quarter had been strong, and profitability was ahead of expectations.

 

SAL, which provides companies with public space to promote their products or services, said revenue and pre-tax profit for the first four months of 2017 were ahead of management expectations due to strong sales in its UK promotions division. 


As a result of the increased revenues and a reduction in costs, the Board says it now expects FY pretax profit to be around £1.1m, with a basic EPS of about 4.5p. Cash generation was also strong, and management is expecting it to continue, forecasting net cash for the year to be around £1.25m.


Today's news sent shares up markedly as consensus estimates for EPS were 2.85p in FY17 and 3.20p in FY18. The company's revenue tends to be weighted towards H2, so investors will be keeping a close eye on whether the company can continue its performance into Q2 and the second half, of which it says it is confident. 

 

CEO Matthew Bending said the year had started strong thanks to better than expected revenues and reduced costs, saying the positive impact of restructuring in 2016 had helped. 



The information contained within this post is based on personal experience and opinion and should not be considered as a recommendation to trade nor financial advice.