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14 October 2023
By Maynard Paton
Whisper it, but a few UK small-caps are still progressing well and maintaining resilient share prices in this difficult market.
Fonix Mobile is a good example. Recent full-year results from this £206 million business showed revenue up 21%, earnings up 10% and the dividend up 12%, which ensured the shares remain within touching distance of their all-time high:
Fonix currently appears on an old SharePad screen of mine that seeks respectable companies that have grown without acquisition. I have always believed the very best companies are those that can expand ‘organically’ and do not rely on purchasing other businesses for higher profit.
The screen’s filter criteria are:
- Positive five-year turnover and operating profit growth;
- A minimum of 15% for both return on equity (ROE) and operating margin;
- Net bank borrowing of no more than zero (i.e. a net cash position), and;
- A five-year acquisition spend of zero.
I selected Fonix as it had exhibited the strongest revenue growth after Alpha Group — which broke its organic-growth history by announcing an acquisition last month — and VAALCO Energy — an American oil explorer that I had no desire to review.
Let’s take a closer look at Fonix.
Read my full FONIX MOBILE article for SharePad >>Maynard Paton
