Certainly, considering the state of the rest of the UK retail industry. The fact that SCS is still growing, albeit slowly, at a time when many other UK retailers are struggling to survive is notable.

What’s more notable in my opinion, however, is the company’s cash generation. During the 26-week period the company generated £20.7m in cash from operations, up £2.5m year-on-year, or just under 14%. With cash flowing into the group’s bank accounts, SCS’s net cash balance at the end of January hit £62.5m, a staggering 70% of its market capitalisation at the time of writing. 

Cash cow

Few other companies have such a strong, cash-rich balance sheet, and that’s why I think this stock deserves a place in your ISA today.

Alongside today’s numbers, management also announced an increase in the group’s interim dividend of 3.8% to 5.5p. A similar full-year increase will give a total payout of 16.8p per share for 2019, offering a yield of 7.6% at the time of writing, according to my number crunching.

As the total dividend only cost the firm £6m last year, it looks as if SCS has more than enough capital to meet its dividend obligations for many years to come. 

Keeping your portfolio fit

One future income champion that I also think would be worth keeping an eye on is The Gym Group (LSE: GYM).

This company is still in growth mode. Today, it reported a 35.6% increase in revenue for the year to the end of December 2018. Adjusted profit before tax increased 19.4% to £14.4m. Off the back of this growth, management has announced an increase in the full-year dividend of 8.3% to 1.3p.

At the current share price, a distribution of 1.3p gives a dividend yield of 0.6%, which I don’t think is particularly attractive when the market average is above 3%. However, it’s the Gym Group’s future potential that really gets me excited.

Last year, the company generated just under £34m in cash flow from operations. Right now, all of this money and more is being reinvested back into the business. But the figures tell me that when management decides to take its foot off the growth pedal and start returning cash to investors, returns could soar.

Indeed, according to my research, the average profit margin on each of the Gym’s established locations is over 40% and return on capital — a measure of profitability for every £1 invested in the company — is above 30%.

In my opinion, these high levels of probability imply the company is a future dividend champion. With earnings set to expand another 38% in 2019, according to the City, it also appears as if the shares are undervalued on a group basis as they are currently dealing at a PEG ratio of 0.8.

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The modern obsession with always being ‘beach body ready’ and living a healthy lifestyle is here to stay, and going to gym for an increasing number of people is as natural as going to work or cleaning your teeth.

This was reflected in The Gym Group’s latest set of brilliant financials in which it advised that revenues jumped by almost a quarter year-on-year during 2017, to £91.4m, while the number of members on its books grew 35.5% during the period to 607,000.

These brilliant numbers were helped by strong underlying demand as well as the fruits of the company’s fizzy expansion drive, the firm turbocharging the number of sites it operates to make the most of the strong environment for such businesses. It opened 21 sites in 2017 and acquired a further 18 from Lifestyle Fitness, and it plans to cut the ribbon on an additional 15 to 20 gyms in the current year alone.

As I said, it is difficult to see fitness-crazed Britain rowing back and gym demand slumping in the years to come. But The Gym Group has an added layer of protection as, unlike its more expensive competitors, the company’s low-cost and no-contract membership model should ensure reliable footfall even in the event of economic conditions toughening further down the line.

City analysts are predicting blistering earnings growth of 25% and 29% in 2018 and 2019 respectively, projections that produce a PEG reading bang on the bargain benchmark of 1. This suggests the business is exceptionally priced relative to its anticipated growth trajectory, and I reckon it should provide plenty of upside for long-term investors.

Medical marvel

I also reckon ConvaTec Group (LSE: CTEC) should churn out exceptional earnings expansion in the years ahead.

Like The Gym Group, the FTSE 250 firm — which provides a range of medical products from wound bandages to stoma bags — is no stranger to doling out double-digit profits growth in recent times, and it is expected to keep going with rises of 9% in 2018 and 7% next year.

It may deal on a slightly-toppy forward P/E ratio of 17.2 times, but I believe the promise of reliable earnings expansion long into the future makes ConvaTec a worthy stock for a slight premium. Indeed, the firm can look to favourable demographic trends like ageing populations, lifestyle choices and increased access to healthcare to keep its products well bought in the future years. Indeed, UBS puts organic sales growth for its underlying markets at between 4% and 6%.

The company has encountered severe manufacturing issues that has seen it fail to keep up with orders. However, this is unlikely to have a significant long-term impact on demand for its products, and measures like boosting its salesforce in the US and Europe, allied with an improvement in its market strategy, should lay the groundwork for strong revenues growth in the medium-to-long term.

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Since April 2013, shares in the company have produced a total return of more than 800% excluding dividends. Including dividends, over the past five years, the stock has returned 60.4% per annum for investors. 

Over the past 10 years, IG has added 26% per annum, enough to turn an initial investment of £1,000 into £11,500 or £100,000 into £1.2m. I believe that this performance is set to continue as the company builds on its past successes. 

Indeed, City analysts have forecast earnings per share growth of 38% for 2018, followed by an increase of 9% for 2019. According to a trading update published by the company today, it looks as if IG is well on track to hit these targets. 

Management notes current figures indicate trading for the fiscal year to 31 March will be in line with expectations thanks to a robust performance from all regions. What is even more impressive is the fact that the company expects to achieve this growth despite “record levels of capital expenditure invested” during the year. Capital spending, coupled with the acquisition of Biscay Greetings in Australia, should help the group continue to expand its global sales volumes across the world. 

The update also states “net cash ended the year positive” after property sales, organic cash generation and capital spending. Even though the company expects to end the year with a clean balance sheet, average leverage during the year is projected to have been below 1.5 times earnings before interest tax depreciation and amortisation (down from 2.3 times last year). 

So overall, IG’s business continues to grow rapidly, and management is complementing organic growth with acquisitions, funded by cash generated from operations. To me, this indicates that the company still has plenty of potential. With this being the case, the stock’s valuation of 21.5 times forward earnings does not look to be too demanding. 

Just getting started 

Another growth stock I like the look of is the Gym Group (LSE: GYM). This company is a trailblazer in the low-cost, pay-as-you-gym exercise market, which has been expanding rapidly over the past decade as consumers shift away from the tired contract-based gym business model. 

Gyms require a lot of capital to start up, but then go on to generate steady returns for many years without needing any more significant spending. As a result, the Gym Group started life with losses and high costs but as its portfolio has grown, economies of scale have begun to work in its favour. 

For example, as revenue has tripled over the past five years, the firm’s operating profit margin has increased to 11% from -0.5%. 

Analysts expect this trend to continue. Earnings growth of 41% is slated for 2018, and an increase of 29% has been pencilled in for 2019. The 2019 target implies the shares are trading at a forward P/E of 20, which might seem expensive. But when you consider the fact that the group only has 128 gyms (year-end 2017) and just over 600,000 members, compared to the total UK fitness industry membership of 10m across 6,800 gyms, it quickly becomes apparent just how small the company still is and how much room it has left to grow. 

Considering the above, in my opinion, the stock deserves a high earnings multiple.

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And Petra was recently down an extra 18% on Monday after it downscaled its profits estimates for the full year.

The stones specialist advised that “due to due to the recent strengthening of the rand and its potential impact on Petra’s cost base in US dollar terms,” EBITDA for the year concluding June would likely fall 10%-15% short of market consensus.

But this was not the only scare story to come out today. The Jersey-based firm cautioned that full-year production will fall short of prior estimates — this is now forecast at 4.6m-4.7m carats versus 4.8m-5m carats previously. Petra said that this is because of lower grades at its Cullinan mine, combined with the impact of industrial action in South Africa during the first quarter.

Jersey gore

As I said, this is not the first time it has spooked investors in recent times, and not just because of strikes in the turbulent mining territories of South Africa.

A disagreement with the Tanzanian government last year resulted in a crushing export ban, and prompted a warning in October that the company could breach its debt covenants. Petra advised today that this has banned a shipment from its Williamson mine and contributed to a 1% fall in revenues during July-December, to $225.2m. This parcel remains blocked for export, the company has said.

These operational problems and its colossal debt pile (net debt ballooned to $644.7m as of December from $613.8m three months earlier) are not the only troubling signs with the outlook for diamond prices less than reassuring too. Rough stone values dropped by 3.5% during the first half, although Petra noted that prices have improved in recent months.

Now City analysts had been expecting earnings to go gangbusters now and beyond, recent forecasts suggesting rises of 160% and 53% in fiscal 2018 and 2019 respectively. Today’s update will see brokers downscale their expectations, of course, making the company’s cheap forward P/E ratio of 7.1 times largely irrelevant.

Given the multitude of problems facing Petra, I would not touch the share with a bargepole right now.

Work it out

I would be much happier stashing the cash in The Gym Group (LSE: GYM) today, another share the Square Mile expects to report eye-watering earnings growth.

The fitness giant is expected to follow a predicted 34% earnings rise in 2017 with advances of 23% this year and 29% next year. And it is not difficult to see why as membership numbers soar (these leapt 35.5% last year to 607,000, due in no small part to its site opening scheme).

And thanks to its low-cost model, I expect the difficult economic environment in the UK to attract more and more people through its doors in the near term. And over a longer-term time horizon the London firm’s expansion programme should deliver strong and sustained profits rises (Berenberg sees scope for the company’s base to double to 250 sites eventually).

While the business carries a premium forward P/E multiple of 26.7 times, its corresponding PEG reading of just 1.2 suggests it is attractively priced considering current earnings estimates. In my opinion, The Gym Group is a growth star worthy of serious consideration today.  

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Following the release of half-year numbers it was down 10% from Monday’s close but, as you will see, there was little in the statement to prompt such a sudden drop.

Instead, today’s mild sell-off can be attributed to profit booking on the back of recent share price strength. IG Design’s market value swelled by almost a quarter in the month leading up to today’s results, with the firm hitting a record of 435p per share just yesterday.

Today’s release suggests to me that the Bedfordshire-based firm should resume its upward charge sooner rather than later.

Global superstar

In a sign of further progress, chief executive commented today that it had enjoyed yet another “robust performance” in the six months to September, a period in which it saw “all regions trading profitably and growth being achieved both organically and through acquisition.”

Revenues at IG Design — which designs and manufacturers gift packaging, greetings, stationery and a variety of other giftware — leapt 14% in the six months to £166.5m, with organic sales at constant currencies increasing 10% year-on-year. As a result, pre-tax profit at the firm ballooned 27% in the first half to £10.5m.

Buoyed by this impressive performance, IG Design decided to light a fire under the interim dividend, hiking the payment by 14% to 2p per share.

It’s little surprise to see IG Design striking such an upbeat tone as its broad catalogue of products fly off the shelves across all major territories. In the Americas and the UK, IG Design saw revenues climb by 18% and 4%, respectively, in the period to September, to $91.3 and £57.5m. And sales are likely to continue booming Stateside thanks to the shrewd acquisition of US-based rival Lang last year.

As if this wasn’t enough, IG Design also continues to make impressive progress in its other international markets; in Continental Europe and Australia sales advanced 19% and 13%, respectively, in the first half.

City analysts are expecting earnings at the business to rise 10% in the year to June 2018 — and follow this with a 14% advance in fiscal 2019. And I reckon that these impressive projections could be subject to meaty upgrades in the weeks and months ahead.

With IG Design’s improving balance sheet also raising, the possibility of additional earnings-boosting M&A (net debt fell £6.2m during the first half to £70.2m), I reckon the business is a brilliant growth share worthy of a premium forward P/E ratio of 19.5 times.

Looking good

The Gym Group (LSE: GYM) is another London-quoted share predicted to deliver exceptional profits growth in the near-term and beyond.

Bottom-line rises of 33% and 21% are anticipated in 2017 and 2018, correspondingly, estimates that are clear to understand as member numbers at the business steadily explode. It saw its membership base improve 19.8% during January-June, to 508,000, and with The Gym Group steadily expanding (it snapped up 18 gyms from Lifestyle Fitness in September), I expect the number of gym-goers on its books to keep steadily expanding.

I am convinced The Gym Group is a brilliant share to consider today despite its elevated  forward P/E rating of 28 times.

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Screen gem

Cinema giant Cineworld lit up the market in Wednesday trading with the release of stunning full-year results.

While the stock was last 1% lower from last night’s close, this represents nothing more than light profit-booking after recent share price strength — the screen star struck record peaks above 600p in the prior session.

Cineworld announced today that admissions hit an all-time high above the 100m marker during 2016, with blockbusters like Star Wars: Rogue One and Fantastic Beasts and Where To Find Them prompting moviegoers to flock to their local multiplexes.

As a result, total revenues at Cineworld surged 12.6% last year. And not surprisingly the business remains upbeat looking into this year and beyond, and expects a fresh line of exciting releases like Star Wars: Episode VIII and Pirates of the Caribbean: Dead Men Tell No Tales to keep driving ticket sales.

And Cineworld is embarking on further expansion to capitalise on rising footfall and keep revenues tilting higher. The firm plans to open six new cinemas in the UK this year alone and another seven overseas.

Not surprisingly the City expects these measures to keep driving the bottom line. Cineworld is expected to follow anticipated growth of 4% last year with expansion of 14% and 8% in 2017 and 2018 respectively.

These forward projections create P/E ratios of 15.9 times for this year and 14.7 times for 2018. I reckon this is a snip given Cineworld’s excellent momentum.

In rude health

Britons’ love of the cinema is just one of the themes to play this year, in my opinion, with the still-rising fitness craze also set to keep driving revenues at The Gym Group.

Revenues at the company soared 25.1% during January-June, The Gym Group advised in its latest trading statement, with membership numbers leaping by almost a fifth in the period. And the company plans to open between 15 and 20 new gyms each year to make the most of surging demand.

The number crunchers expect The Gym Group to have flipped back into the black in 2016, swinging to earnings of 5.3p per share from losses of 2p in the prior period.

And fitness freaks are expected to keep this positive trend rolling with excellent bottom-line growth of 43% in 2017 and 25% next year.

Although P/E ratios of 25.3 times and 20.3 times for this year and next may be slightly toppy on paper, PEG figures of 0.5 and 0.8 for 2017 and 2018 suggest The Gym Group is attractively priced relative to its near-term growth prospects. A number below one is broadly considered brilliant value.

And I reckon the company’s next trading update scheduled for this week (January 12) could provide The Gym Group with fresh share price fuel.

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Sure, British cinema stubs may be some of the most expensive on the planet. But a trip to the flicks still remains one of the cheapest ways to have a night out in the UK, particularly for those taking advantage of Cineworld’s Unlimited membership card scheme.

Exceptional outlook

City analysts certainly expect the bottom line at Cineworld to keep swelling, and earnings rises of 3% and 14% are marked in for 2016 and 2017 correspondingly. A subsequent P/E rating of 17.2 times for this year may rise above the benchmark of 15 times widely considered reasonable value. But Cineworld’s multiple slips in line with this figure based on 2017’s earnings.

And I reckon this is a bargain given Cineworld’s exceptional revenues outlook.

Not only should a steady stream of blockbusters keep movie lovers flocking through its doors — the latest fare from Marvel and Disney helped power admissions 2.7% higher, to 46.1m, during January-June — but the screen operator’s ambitious expansion across the UK and central and eastern Europe bodes well for future earnings, too.

Cineworld opened four new multiplexes in the first half (two in the UK, one in Israel, and one in Romania), and the firm’s ongoing acquisition drive saw it vacuum up five Empire cinemas in August.

In great shape

But Cineworld is not the only hot bet for those seeking robust earnings growth in turbulent times. Indeed, Britain’s rampant fitness craze should keep sending admissions into The Gym Group (LSE: GYM) higher, too.

The Guildford-based business saw revenues shoot 26.1% higher between January and June, to £36.1m, with membership numbers swelling 19.4% year-on-year to 424,000.

And The Gym Group’s low-cost model should keep member numbers sailing comfortably higher, in my opinion, particularly if worsening economic conditions drag fitness fanatics from more expensive gymnasiums like Nuffield Health.

And like Cineworld, The Gym Group is also expanding its estate to keep the punters coming in, with the company aiming to open 15–20 new sites in both 2016 and 2017. The company currently has around 80 facilities up and running, leaving plenty of upside in what is a fast-growing sub-segment. There are only 450 cut-price gyms in the UK, according to The Gym Group’s estimates.

With the company also snapping up gyms from its competitors, the number crunchers expect The Gym Group to swing into the black with earnings of 5.1p per share this year, before enjoying a 55% advance in 2017.

Consequent multiples of 39.1 times and 25.2 times may be too heady for some, but I reckon the potential for further explosive earnings advances makes The Gym Group one that growth-seekers should keep an eye on. 

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Trainer and tracksuit giant Sports Direct (LSE: SPD) has been a huge beneficiary of Britons’ galloping demand for sportswear, the business having seen earnings surge at a compound annual growth rate of 23.3% during the past four years alone.

And the City does not expect this momentum to stall any time soon — Sports Direct is predicted to enjoy further bumps of 11% and 15% in the years to April 2016 and 2017 respectively, driving a current P/E ratio of 16.4 times for the current period to 14.4 times for fiscal 2017.

Picking up the pace

Even though shares in the Mansfield business have recovered much ground from October’s heavy weakness — Sports Direct shed 16% of its share value in less than a fortnight last month — I believe the stock still provides plenty of value for money at these levels.

Like budget supermarkets Aldi and Lidl, Sports Direct understands that people demand much more bang for their buck, and consequently remains committed to keep flogging its products at bargain-basement prices. The retailer’s ‘discount’ brands like Dunlop, Lonsdale and Karrimor have remained resolutely popular with British shoppers, and Sports Direct has invested huge sums into the marketing and in-store positioning of these labels to maximise sales.

The firm has not neglected the needs of the more label-conscious shopper, however, and top-tier brands like Nike and Adidas are a stalwart of the company’s shelves. Indeed, last year Sports Direct developed its Glasgow flagship store in tandem with US sports giant Under Armour.

But Sports Direct is not content to rest solely on the retail side, and the company purchased 25 LA Fitness gymnasiums last year, taking its portfolio of fitness facilities to 27. And a backdrop of growing gym memberships is likely to result in further expansion at its Fitness division, in my opinion.

Exploding off the line

Like Sports Direct, treadmill trade The Gym Group (LSE: GYM) has seen sales rocket in recent years. From opening its maiden facility in London in the summer of 2008, the company now operates 66 gyms across the country and has a membership base of some 363,000 fitness fanatics. And the business plans to open another nine outlets in the near future.

The Gym Group’s approach of offering 24-hour, seven-days-a-week access to its users is clearly cooking up a storm in an environment of flexible working hours and changing lifestyles. And critically, the company’s model of offering ‘no contract’ membership schemes and cheap workout sessions is allowing it to run rings around premium-priced rivals like Virgin Active.

The company launched on the London Stock Exchange earlier this month, and I believe the stock is definitely one to watch. The Gym Group is the second-largest low-cost chain behind Pure Gym, which operates more than 90 facilities nationwide.

Although competition in this segment continues to intensify, I believe The Gym Group’s aggressive expansion policy — not to mention the benefits that industry veteran chief executive John Treharne brings to the table — could deliver stunning returns in the years ahead.

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