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30 Jul 20

Belvoir Group - Forecasts upgraded, strategy continues to deliver

Since the restrictions were lifted in mid-May, Belvoir has seen a surge in activity due to pent-up demand, resulting in June being a record breaking month for the group’s Newton Fallowell estate agency network in terms of instructions and sales and the financial Services division in terms of written income. Management have stated that with the positive impact of the stamp duty reductions still to take effect they are confident that the Group is well positioned to capitalise on the current market upturn and to take advantage of the opportunities arising from more challenging conditions. We have upgraded our PBT forecasts for FY 2020 to the level we forecast pre-COVID. We have also upgraded our target price from 169p to 233p and highlight that H1 2020 has demonstrated the resilience of the group, management’s ability to navigate difficult market conditions and the power of the franchise-led strategy.

Companies: Belvoir Group Plc

29 Jul 20

Avacta Group - Termination of coverage

Edison Investment Research is terminating coverage on Avacta Group (AVCT), BCI Minerals (BCI), Destiny Pharma (DEST), Globalworth Real Estate Investments (GWI), Henderson Alternative Strategies Trust (HAST), Herantis Pharma (HRTIS), Jupiter Green Investment Trust (JGC) and Rockhopper Exploration (RKH). Please note you should no longer rely on any previous research or estimates for these companies. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website

Companies: Avacta Group Plc

03 Aug 20

Cenkos: Seeing Machines Ltd - Better trading than expected

Seeing Machines has released a trading update demonstrating the business is performing better than expected on key metrics: Revenues of A$39.7m were 13% ahead of our expectations of $35.1m and cash of A$38.7m was 21% ahead of our expectations of A$32.0m. We believe this strong end to the financial year reflects the continued demand for the company's Fleet product by sophisticated fleet owners and that the key home markets of Australia and New Zealand have been less affected by COVID than feared. We believe this strong cash performance should reduce the perceived funding risk weighting and help the valuation recover towards previous levels. We iterate our Buy recommendation and 7.2p price target.

Companies: Seeing Machines Ltd.

04 Aug 20

Games Workshop Group - Winning performance

Games Workshop’s (GAW) FY20 results show that demand post lockdown, during which the company initially suspended all trading, has surprised on the upside, leading to a greater profit outturn than recently anticipated by management. Management is aiming to grow revenue in FY21e, while maintaining the operating margin given a focus on leveraging Online (19% of group revenue) as the economic environment will likely lead to lower growth for Trade (52% of group) and a decline in Retail (29% of group) revenue. Our new forecasts for FY21e are for revenue to increase by 2.1% and PBT to decline by 5% due to lower royalty income.

Companies: Games Workshop Group Plc

03 Aug 20

Making the most of lockdown

As is characteristic of this company, management has acted swiftly to execute an additional acquisition, putting the placing proceeds to work with another immediately earnings-enhancing acquisition, creating a Group with diversified revenue and profits, significant growth potential and greater visibility in a post-COVID world. We reintroduce estimates with CAGR in revenues of 29% between FY 2021 and FY 2023 and a CAGR in EBITDA of 34%. Quantuma, an insolvency and restructuring specialist targeting SMEs, is being acquired for £26.95m from existing resources to give an EBITDA multiple of 7.47x (EBITDA March 2020: £3.6m). Our forecasts take into account the greater visibility and predictability that the recent acquisitions bring to the Group. Our new SOTP valuation arrives at a reinstated price target of 300p.

Companies: K3 Capital Group Plc

05 Aug 20

First UK order for Primestore MTM device

EKF has secured its first order in the UK for the Primestore MTM sample collection device, worth £3m over the next 7 weeks. The purchaser is a partner from the private sector, with the device being used in a Covid-19 testing programme for UK staff. With these increasing orders, EKF has expanded its production line in Cardiff and now has capacity for 25,000 sample collection tubes per day. In addition, the production line in Germany is now up and running. We increase our FY20 revenue estimates by a further £3m and EBITDA by £2m. Given the nature of the device, which is agnostic over which molecular test is used, we expect demand to continue at elevated levels for the duration of the pandemic and continue to see further upside potential to our already materially upgraded estimates. EKF remains one of our best Ideas for 2020.

Companies: EKF Diagnostics Holdings Plc

30 Jul 20

Still winning major deals

Sopheon has this morning announced a major win for Accolade – the global snack food giant, Mondelez. The deal is good evidence that Sopheon continues to win material deals despite the pressures of COVID-19, and that its innovation management platform is genuinely market-leading. We continue to believe that the group will see a return to strength as the market slowly recovers, and see today’s announcement as a useful signal.

Companies: Sopheon Plc

03 Aug 20

The Ince Group plc* - Stabilisation and Cause for Optimism

While Ince's FY20 results are complex given the various movements in reported figures associated with accounting for the Ince International consolidation, our assessment is that there are emerging signs of increasing operational effectiveness and reasons for optimism for investors. The operating environment and outlook remains opaque and thus we keep our forecasts and recommendation for the Group withdrawn at this time.

Companies: The Ince Group plc

03 Aug 20

Another positive trading update lifts forecasts

Byotrol released a further positive trading on the back of a strong Q1 FY 2021, citing product sales in excess of £3.4m in the quarter and for the business to significantly exceed full-year market forecasts. With the order book at the end of June still being c.£2m (similar to at 30 April) and continued improving supply chain management for biocidal ingredients, we have upgraded forecasts to reflect this outlook. We increase FY 2021 revenues, adjusted EBITDA and EPS by 15%, 38% and 55%, respectively. Consequently, we upgrade our target price to 10p, at which level the stock would trade on 3.7x sales. As previously indicated, we think the pandemic should result in a secular shift towards improved disinfection prevention, reducing the prospect of FY 2021 being a one-off exceptional performance. The prospect for further upgrades should current monthly revenues extend for longer than anticipated and additional IP monetisation events should not be discounted, in our view, either.

Companies: Byotrol Plc

05 Aug 20

Low interest rates wipe out operating resilience

L&G reported an operating profit from continuing divisions (excluding Mature Savings and General Insurance businesses) of £1,128m, -2.2% yoy. The COVID-19-related cost was £129m. LGR posted a growing operating profit to £721m. Net profit amounted to £290m vs. £874m a year before, being affected by the reduced discount rate used to calculate LGI reserves. The Solvency II ratio stood at 173%. The Board recommended an interim dividend of 4.93p/share, stable relative to H1 19.

Companies: Legal

04 Aug 20

Cenkos: Shearwater Group Plc -- Cautious on Covid

Shearwater delivered adjusted EBITDA ahead of expectations. FY20A was a strong year with the Group delivering maiden profitability and an enhanced margin profile. Cybersecurity and resilience are enduring themes but we are now cautiously presenting a picture of unchanged profitability in FY21E as a measure against the impact of COVID-19.

Companies: Shearwater Group Plc

03 Aug 20

Signs Softcat as a reseller, momentum elsewhere

Smartspace released positive news for both Space Connect and SwipedOn on Friday, sending the stock nearly 50% higher. Space Connect has signed a distribution agreement with Softcat and the SwipedOn has posted 80% yoy growth in AAR. Encouragingly too, SMRT also flagged current net cash at £1.7m (vs. £1.9m in April) demonstrating impressive reliance despite a challenging macro backdrop. In fact, SMRT has adapted quickly and is proving a ‘Covid beneficiary‘, seeing strong inbound demand as customers look for safe news ways to conduct business. Reassured by this, we continue to believe that Space Connect and SwipedOn could be worth considerably more than the current market cap.

Companies: Smartspace Software Plc

29 Jul 20

Resilient performance and confident outlook

Hargreaves’ FY20 results are very solid indeed. As previously reported, the only noticeable impact from COVID was in the slippage of Blindwells’ land sales, which were due to conclude during the lockdown period. Site activity has resumed and sales remain on track to conclude in the current year. A final dividend of 4.5p has been declared and the outlook statement is measured but confident. We reintroduce forecasts today, effectively reinstating our pre-COVID expectations. Hargreaves is well positioned to deliver a period of significant, renewed growth with the prospect of a double digit dividend yield from FY22 as HRMS profits are distributed.

Companies: Hargreaves Services Plc

03 Aug 20

Rebound post lockdown

What’s new: Purplebricks Group results for the year to 30 April 2020, show the Australian and US units as discontinued; but include the Canadian unit sold for C$60.5m (i.e. £35m) in July. Investors will focus on the UK unit which revealed:  11% fall in UK revenue to £80.5m (FY19: £90.1m), as the number of instructions fell 23% (impacted by early Covid uncertainty and lockdown), but the average revenue per instruction “ARPI” rose 12% to £1,394;  UK gross profit margin improved to 64.1% (FY19: 63.0%);  UK marketing costs to revenue improved to 25.6% (FY19: 29.6%);  Spend on Digital capacity pushed UK operating costs 32% to £26.2m (FY19: £19.9m), as new management team pursued initiatives which are being “delivered at pace with significant opportunity for further innovation.”  UK adjusted EBITDA fell 53% to £4.8m (FY19: £10.2m).

Companies: Purplebricks Group Plc

29 Jul 20

Cenkos: Pelatro Plc -- Expansionary raise

Pelatro has raised $2.7m in an equity Placing to fund an expansion in sales headcount and marketing activities in order to further expand the business, subject to shareholder approval. The product suite is fully developed and ready to be taken to a much broader set of customers. The beneficial impact of this expansion should be felt from the end of 2021E onwards.

Companies: Pelatro Plc

05 Aug 20

Hygiene worries drive a strong H1 20 showing

Reckitt reported strong H1 20 results, beating consensus as well as our estimates. Sales were up 11.9%, driven by Hygiene (+16.1%) and other health (+22.7%). The top-line growth was mainly attributable to volumes (+11%), which largely contributed to a 90bp expansion in operating margin (24.5%). Following the strong H1, management now expects high single-digit growth in FY20 (vs higher than 0.8% previously) with margin expectations unchanged (-350bp vs FY19). We will be raising our estimates.

Companies: Reckitt Benckiser Group Plc

05 Aug 20

EBITDA beat on lower costs

Q2 EBITDA of USD 110m vs Cons of USD 106m FSU conversion delayed by 6months but terms remain unchanged Limited news flow in the report GLOG 2022’s should continue pull towards par

Companies: GasLog Ltd.

05 Aug 20

ECSC Group reports first half profit and strong growth in managed services

05 Aug 20

A very good set of results

Wolters Kluwer released solid H1 20 results with revenues up 3% organically at €2,294m, in line with expectations, and above expected adjusted OP (€577m, i.e. a 25.2% margin compared to 25.2% a year earlier). Adjusted net profit at €426m (+21%) and interim dividend raised from €0.39 to €0.47. The FY20e guidance remains suspended due to the COVID-19 context. Globally, the very good set of results is likely to be share-price supportive, with forecasts and target price expected to be upgraded.

Companies: Wolters Kluwer NV

05 Aug 20

Tiziana Life Sciences PLC's clinical plan is shaping up says analyst Emma Ulker

05 Aug 20

On the rebound

Seneca Global Income & Growth Trust’s (SIGT’s) UKbiased value style and mid-cap exposure suffered heavily during the first quarter of 2020 as markets collapsed – its net asset value (NAV) fell by some 30.4%. However, the manager used the rout to take advantage of deep value opportunities and SIGT has benefitted as markets have rebounded – up 16.5% during the second quarter. The manager believes there is much more to come.

Companies: Seneca Global Income & Growth Trust

05 Aug 20

Media and Games Invest - Scorching Q220, FY20 guidance raised boldly

Media and Games Invest (MGI) is a fast-growing and profitable games and digital media business. In its maiden results following the group’s Scale listing in July, the group has reported a like-for-like increase in Q2 revenues of 97% to €30.0m, with EBITDA up 68% to €6.3m. These results were driven by sustained supernormal levels of demand for MGI’s games in Q220, supported by acquisitions. The group reported preliminary H120 revenues of €56.6m (H119: €28.6m) and EBITDA of €11.6m (H119: €7.5m). Given this performance, management raised its guidance for FY20, with a revised revenue target of €115–125m (growth of 37–49% y-o-y). Management also introduced EBITDA guidance, with FY20 EBITDA expected to be €20–23m (growth of 29–48% y-o-y). These forecasts exclude the impact of any potential M&A in H220. The half-year report is due on 12 August 2020.

Companies: Media

05 Aug 20

On the rebound

Seneca Global Income & Growth Trust’s (SIGT’s) UKbiased value style and mid-cap exposure suffered heavily during the first quarter of 2020 as markets collapsed – its NAV fell by some 30.4%. However, the manager used the rout to take advantage of deep value opportunities (increasing exposure to UK equities, for example) and SIGT has benefitted as markets have rebounded – up 16.5% during Q2. The manager believes there is much more to come.

Companies: Seneca Global Income & Growth Trust

05 Aug 20

SP Angel . Morning View

AfriTin (ATM LN) – July concentrate production at Uis mine increases by nearly 80% | Europa Metals Limited (EUZ LN) – Board changes and progress report on Toral zinc, lead, silver project in Spain | Hummingbird Resources (HUM LN) – Production dips in Q2 but FY20 guidance maintained at 110-125koz and net cash status expected in H2/20 | IronRidge Resources* (IRR LN) – High grade drilling results at the Zaranou Gold Project in Côte d’Ivoire | Prospect Resources* (PSC AU) – Assays confirm Arcadia as an ultra-low iron lithium producer | SolGold* (SOLG LN) – Board changes | Sunrise Resources (SRES LN) – Mine reclamation permit is granted | Talga Resources* (TLG AU) – Feasibility Study and Talnode anode demand leads Talga to go directly to commercial production in 2022

Companies: ATM EUZ HUM IRR PSC SOLG SRES

05 Aug 20

Oil & Gas Daily Flow

Mosman Oil & Gas* (MSMN LN): Fully funded for upcoming work programme

Companies: Mosman Oil

05 Aug 20

SP Angel Healthcare Conditions

Diurnal (DNL.L): Israeli approval for Alkindi

Companies: Diurnal Group plc

05 Aug 20

Low interest rates wipe out operating resilience

Companies: Legal

05 Aug 20

Massive provisioning effort, upgraded top-line guidance

The second quarter was marked by a massive provision frontloading effort. On the positive side, management now expects a better-than-previously guided top-line resilience. It remains that the group will post a loss this year with limited visibility on the recovery potential next year.

Companies: Bank of Ireland Group Plc