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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Luceco - Trading ahead of expectations

March 2024

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • LUCE
  • Price:
  • 149p
The shares spiked to intra-day highs of over 160p after a strong update from Luceco, which said it expects to report FY23 EBIT of between £23.5m-£24m. Even more startling, strong free cash generation meant net debt is expected to fall to just £23m (below Liberum’s forecast of £31.9m) with net debt / EBITDA at 0.6x against forecasts of 1x, paving the way for more eps enhancing acquisitions and/or a bumper dividend. This comes despite a challenging RMI market, albeit consumer confidence is improving according to recent surveys. As I said in my main write-up last June, Luceco is highly operationally geared and the expectation is that EBIT margins should significantly increase when RMI demand is primed by falling interest rates later ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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