Sam is a trader and one of our lead stock analysts at AskTraders. After starting his career predominantly in the forex markets, Sam now focuses on gold and stocks with a preference for macroeconomic analysis.
Shares of health, safety, hygiene and environmental consultancy services and security solutions company PHSC (LON: PHSC) are surging on Thursday after the company announced the commencement of a share buyback programme.
The announcement came soon after PHSC released a trading update for the year ended March 31 2021, revealing the impact of the coronavirus pandemic.
The company said it was heavily reliant on the coronavirus job retention scheme in the first half, with income under that scheme along with grant funding totalled approximately £440,000 for the financial year.
PHSC's health and safety division saw increased activity over the financial year in certain operational segments, such as risk assessment. However, they could not service many clients in the leisure and education sectors due to the requirement for their premises to be closed or to operate at a reduced capacity because of COVID-19 restrictions.
The AIM-listed company's management systems subsidiary remained profitable despite reduced revenues.
Its security division, which is primarily a supplier to the retail sector, continued to suffer due to the lockdown and the closure of non-essential retail. However, with grant funding and the coronavirus job retention Scheme contribution, it operated at breakeven.
The corporate failures of PHSC clients such as Debenhams and Edinburgh Woollen Mill resulted in the write-off of certain amounts due to the group.
The group's revenue for the year came in at £3.29 million compared to £4.44 million, while earnings rose to £520,000 compared to £255,000 the previous year.
Revenue for the second half of the year improved to £1.92 million from £1.38 million. Earning for the second half came in at £338,000 from £182,000 in the first half.
PHSC also announced a share buyback programme of £325,000 as part of its strategy to deliver shareholder value. It will be, in part, funded by the £305,000 generated by the sale of an Essex property.
They said the 14p share price “represents a significant discount to its net asset value per share of approximately 35.42p”.
PHSC's share price is trading 27.71% above Wednesday's close at 17.9p at the time of this publication.
PHSC shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are PHSC shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
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