Dividend increase

Shares in insurance group Randall & Quilter (LSE: RQIH) gained as much as 7% today after the company reported a more than tripling in profits in 2016. As after-tax profits increased from £2.8m to £8.3m, the Bermuda-based insurance investor and service provider also announced its first dividend increase since 2012, boosting its full-year dividend from 8.4p per share to 8.6p per share. This gives its shares a tempting prospective dividend yield of 6.8%.

The insurer is also upbeat about its prospects going forward. “2017 is expected to be a year characterised by further profit growth and strong strategic focus,” the company said in today’s announcement. R&Q sees further acquisition opportunities this year and expects to reap the rewards from the expansion of its product offering and stronger distribution in North America after years of investment and underperformance.

However, not everything is rosy. The company managed to deliver an extremely strong performance in its Insurance Investments Division following the completion of a series of 15 legacy transactions during the year and an improvement in investment returns. But profits fell sharply from its Insurance Services division, while losses widened at its Underwriting Management unit. This indicates an unbalanced reliance on investments as a source of growth, which could become a cause of concern should the company struggle to acquire new businesses and investment returns decline.

Growing acceptance

Meanwhile, Xeros Technology (LSE: XSG) announced the rollout of its commercial laundry machines continues apace. Shares in the developer and provider of polymer-based technologies gained by as much as 4% today as the company reported group earned income increased to £2.5m in the 17 months to 31 December 2016, up from £480,000 for the year to July 31 2015.

The company’s progress in the laundry market continues at a steady pace, with Xeros seeing multiple successful customer trials in the performance workwear market and increasing in its order backlog to 438 machines at the end of March. In addition, Xeros is seeing promising trial results for its polymer technology in tanning and textile manufacture applications, which could underpin the long-term growth prospects of the company.

Xeros is still some way away from delivering significant profits, as its pre-tax loss in the 17-month period widened to £21.1m, from a loss of £10.7m in the year to July 2015. However, the company is moving towards generating meaningful revenues — CEO Mark Nichols advised that “2017 will be a year of execution, in which we significantly progress the commercialisation of our highly disruptive, innovative technology.”

Year-to-date, shares in Xeros haven gained 26% — but they may yet have further to go. Xeros is looking to expand its distribution network and has recently secured a significant forward channel partner agreement to enter the Australian commercial laundry market. And as the rollout continues, Xeros could prove that there is growing acceptance and demand beyond the US and UK commercial laundry market. This would be a major boost to the company’s growth plans, increasing the penetration of its target markets.

The post Should you keep an eye on these small-caps after today’s results? appeared first on The Twelfth Magpie.

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Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Lock in smashing returns

Shares in Lok’N Store Group (LSE: LOK) shot 4% higher in start-of-week business, after the self-storage specialist released blockbuster trading numbers.

Lok’N Store saw revenues leap 4.7% in the six months to January to £7.99m, with like-for-like revenues surging 8% during the period. This sterling result helped propel pre-tax profits 156% higher from the corresponding six months last year, to £3.79m.

The space provider continues to benefit from Britain’s growing ‘hoarding’ culture, with occupancy rates rising 2.4% during July-January on a like-for-like basis. And I expect Lok’N Store to remain in vogue as strong economic conditions boost Britons’ demand for extra space.

This view is shared by the City, and Lok’N Store is expected to see earnings shoot 34% higher in the year to July 2016. A subsequent P/E rating of 29 times may be expensive on paper, but I expect this figure to topple as earnings explode — indeed, a predicted 33% bottom-line rise in 2017 pushes the rating to a much-improved 21.7 times.

On the march

Insurance play Randall & Quilter (LSE: RQIH) also headed for the stars on Monday after releasing solid financials of its own, the firm recently trading 15% higher from last week’s close.

Randall & Quilter announced that it had swung back into the black in 2015, reporting a £2.8m profit versus the previous year’s loss of £1.6m. The company put this improved performance down to the impact of recent acquisition activity.

And the insurer is upbeat about its prospects for the year ahead — indeed, chairman and CEO Ken Randall advised that “the board has a positive outlook for the current year” before adding that “the pipeline of potential legacy acquisitions is very promising with a diverse range of opportunities.”

The number crunchers expect Randall & Quilter to keep its strong momentum going with profits of £8.3m in the current period. Like Lok’N Store, I reckon the financial business could be in line for broker upgrades in light of today’s positive release.

Digger dives

Mining and energy leviathan Glencore (LSE: GLEN) was faring less well in Monday trade, however, with its shares currently 3% lower from Friday’s close.

The business has moved lower in lockstep with falling commodity prices. Investors are taking the opportunity to cash in on heady-looking resources values, with bellwether copper, for instance, slumping back below the $5,000 per tonne marker.

Like its industry peers, I believe Glencore is in serious danger of a colossal share price correction should data from China turn lower again. All major commodity sectors remain in a state of chronic oversupply, a situation that is steadily worsening as mining capacity across the globe increases.

The City expects Glencore to move back into the black in 2016 with earnings of 3.4p per share. This figure results in a mega-high P/E rating of 54.6 times, and I consider such a reading unfathomable given the operator’s murky profits outlook. And Glencore’s massive reading certainly leaves plenty of scope for a serious retracement.

The post Should you buy Glencore plc, Lok’N Store Group plc & Randall & Quilter Investment Holdings ltd ord 2p (DI) today? appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.