Primorus Investments Reports Significant Profit Turnaround in 2024 Results
Why we think this is good
The company has demonstrated a remarkable turnaround, swinging from a substantial loss in 2023 to a significant profit in 2024. This is reflected in the impressive improvement in EPS from -1.68p to 1.923p. The realised gain on financial investments of £3.168m is particularly noteworthy, indicating successful investment decisions. However, it's important to temper this optimism with some caution. The decrease in cash balance from £775,000 to £42,000 and the worsening operating cash flow are concerns that cannot be ignored. While the company's investment strategy appears to be yielding positive results, the nature of the business means that future performance is subject to market conditions and investment decisions. The low PE ratio of 1.82 suggests the market may be undervaluing the company based on current earnings, but this could also reflect uncertainty about the sustainability of these profits. Overall, while the financial performance shows significant improvement, the inherent risks and cash flow concerns prevent an extremely positive outlook.
Key Points
- Operating profit increased from -£2.349m in 2023 to £2.681m in 2024
- Earnings per share improved from -1.68p to 1.923p
- Realised gain on financial investments of £3.168m in 2024
- Cash balance decreased from £775,000 to £42,000
- Operating cash flow worsened from -£315,000 to -£648,000
- Increased investment in Fresho, now owning approximately 5% of its issued share capital
- New investments in Virtualstock Holdings Ltd and Pri0r1ty Intelligence Group PLC
- Disposal of investment in Engage Technology Partners Limited
- Special dividend of 1.5p per ordinary share paid in March 2024
Summary
Primorus Investments plc has reported a significant turnaround in its 2024 financial results. The company swung from an operating loss of £2.349 million in 2023 to an operating profit of £2.681 million in 2024. This improvement is reflected in the earnings per share, which rose from -1.68p to 1.923p. A key driver of this performance was the realised gain on financial investments of £3.168 million, compared to a loss in the previous year. However, it's important to note that the cash balance decreased from £775,000 to £42,000, and operating cash flow worsened. The company continues to focus on its investment strategy, including increasing its stake in Fresho and making new investments in companies like Virtualstock and Pri0r1ty Intelligence Group. While the profit turnaround is impressive, the nature of the investment business means future performance remains subject to market conditions and investment decisions.