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18 Apr 19

FY 2019 ahead of expectations

The post YE trading update revealed that a strong Q4 performance meant that the company’s FY March 2019 revenue and earnings will be ahead of expectations and we raise our forecasts accordingly. We expect this strong demand for data solutions to continue and cautiously ease forward FY 2020 forecasts too. However, we note that IFRS 15 adoption saw £1.7m of revenue brought forward from FY 2018 (now restated) into FY 2019, skewing organic growth comparisons. Furthermore, EPS will also be skewed; not only by IFRS 15 adoption but also by an exceptionally low FY 2019 tax rate, due to relief on management options. Thus adj. FD EPS appears to fluctuate unpredictably when actually, underlying these headline numbers, the D4T4 business is steadily growing and maintaining margins while also increasing investment in the US operations. This is another year of excellent performance and we lift our TP to 300p in response.

Companies: D4T4 Solutions

18 Apr 19

LIBERUM: Sylvania Platinum* - More value and more options

We recently attended a company site visit which highlighted that we have considerably undervalued the tail of Sylvania’s operations. Also, now that its host Samancor has grander ambitions, Sylvania too has possible growth opportunities.

Companies: Sylvania Platinum

24 Apr 19

LIBERUM: Frontier Developments* - Franchise IV: Planet Zoo

Frontier has announced that Franchise IV will be the development and PC release of Planet Zoo this autumn. It builds on Frontier's extensive experience in management simulation games, and in particular the launch and continued success of Frontier's second and third self-published games Planet Coaster and Jurassic World Evolution.

Companies: Frontier Developments

24 Apr 19

FY19 Results beat expectations

Boohoo Group plc has announced a solid set of results for the full year ended 28 February 2019, ahead of our forecasts which were revised higher in January. In recent years the boohoo group has transformed from a single branded e-commerce player into a scalable multi brand platform with proven ability to execute rapid growth. Its disruptive model, centred on a customer led proposition with strong social media engagement is enabling it to take market share from its competitors. The Group’s well-invested infrastructure is now capable of supporting revenue of up to £1.5bn with significant projects including the Sheffield warehouse relocation and Burnley automation delivered in on time, on budget and with minimal operational disruption. In the year ahead, we forecast the boohoo group to break through £1bn of revenue and generate more than £100m of EBITDA. It’s growth rates and profitability are at a premium to its listed peer Group whist its brandownership gives it, in our view, unmatched flexibility in its proposition. Operational cash conversion in excess of 100% translates to positive free cash flow despite record levels of investment meaning it ended the year with net cash of £190.7m on the balance sheet giving it substantial fire power with which to execute its next stage of growth.

Companies: Boohoo.Com

11 Apr 19

Quarterly Research Outlook

We’re just over three months in to 2019 and we’ve seen a 10% UK market rally, retracing much of the Q4 decline, such is the nature of fickle market sentiment. That said, many of the issues we wrote about three months ago that were impacting markets remain: notably Brexit, trade wars, geopolitics and global monetary policy. The 2019 rally thus far feels somewhat fragile, with competing forces of optimism on a potential trade deal which could underpin the rally, against the deterioration in underlying economic data that could ultimately undermine the recent market gains. In this context, we look at what the lead indicators and the market are telling us about the industrial cycle and the stocks most exposed to various industrial trends. The Q4 derating in short cycle industrials and autos had been vicious and while these sectors have seen a more solid footing in 2019, with earnings downgrades being priced in, it will likely take a trough in lead indicators before short cycle stocks can start to perform again and re-rate relative to the market.

Companies: ARS CYAN HYR LIT SOM ABBY AMS AMER ANX ATYM AVON BLVN PIER BUR CGS CAML CALL CSRT TIDE DTG DEMG EMR FPO FST GTLY GENL GOR GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO INDI JHD JOG KEYS KCT KGH LAM LOK MACF MNO MANO MOD MKLW OXIG PCA PANR PARK PGM PHC PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TRAK TRI VNET VTC ZOO ZTF

24 Apr 19

Planet Zoo announced for an Autumn launch

The fourth major game release due out exclusively on PC this Autumn will be Planet Zoo. Players will be able to build and manage a zoo filled with highly authentic animals in a high quality simulation. An impressive video preview is available online here. Fitting in neatly alongside the existing Planet Coaster and Jurassic World Evolution games, it utilises some of the knowledge developed with those two previous park simulations to bring the historically successful and popular Zoo Tycoon concept up to date in a beautifully crafted and creative game that should appeal to a broad audience. Our forecasts and TP are unchanged.

Companies: Frontier Developments

25 Apr 19

Photo-Me - Entering a new, large market

Photo-Me has acquired 96% of Sempa, a manufacturer of commercialised fresh fruit vending equipment, based in France. The net cash consideration is €11.6m, and Sempa reported sales of €9.4m and PBT of €3.7m in 2018, meaning the group has paid an attractive 3.1x PBT. We have upgraded our FY 2020E EPS by 6% and we now forecast net cash of £10m at April 2019. We reiterate our view that the 10% dividend yield supported by a net cash balance should continue to provide good support for the shares that now have the added interest of potential growth in the large juice vending machine market.

Companies: Photo-Me International

18 Apr 19

Cenkos: Venture Life Group Plc - Delivering on the strategy

Venture Life's full year results show a strong growing company generating profits and positioned to deliver both organic and M&A driven growth going forward. Revenues were £18.8m (trading update expectation £18.7m) and adjusted EBITDA was £2.7m versus our expected £2.3m. The 17% revenue growth was relatively evenly split between organic and M&A driven, demonstrating the potential of both aspects of the group's strategy. The company closed the year with a net cash position of £5.8m (2017A net debt £6.3m). We maintain our Buy recommendation.

Companies: Venture Life Group

02 Apr 19

Strategy update due in April

AB Dynamics’ (ABD) trading update for the first six months of FY 2019E states that revenues and adjusted operating profits are expected to be ‘significantly ahead’ of the same period last year. Consequently, management expects the full year to be in line with market (and its own) expectations. Market demand for track testing products and ABD’s own operational improvements are cited as the main drivers of a continuation of the strong performance seen in FY 2018. The announcement also highlights an updated strategy, which will be presented at the time of the interim results - CEO Dr James Routh notes that the focus is on “successfully implementing the strategy which builds on our strong foundations to create long-term sustainable growth." Noting the strong first half performance and the in-line trading update, we bring our revenue estimates up from the lower end of market expectations, adding 8% and 5% for FY 2019E and FY 2020E respectively. We adjust EBITDA to reflect previous guidance on investment in growth opportunities.

Companies: AB Dynamics

17 Apr 19

Games Workshop Group - Marching on up

As outlined in our recent initiation note, ‘On a mission’, Games Workshop’s (GAW) focus on international multi-channel expansion, customer engagement and product innovation, alongside its openness to exploring ways in which to leverage its rich intellectual property (IP) to generate royalty income, is continuing to deliver outstanding results. Strong trading since the half year, and new licensing agreements, lead us to upgrade our FY19 and FY20 earnings forecasts by c 14%.

Companies: Games Workshop Group

18 Apr 19

Walker Greenbank - Tough FY19, dividends rebased

A new CEO appointment follows other board changes; with tough UK conditions set to persist, operational improvements, international growth and brand development are all firmly on the agenda and a refreshed strategic update will come from the new team later in the year. With a broadly maintained payout ratio in FY19, lower earnings drove a similar reduction in dividends. With lower earnings anticipated in FY20, the company is trading on a prospective 3.8% dividend yield and a 7.8x P/E.

Companies: Walker Greenbank

17 Apr 19

Market bounce gives FUM bounce

City of London has announced its FUM as of 31 March for 3Q’19. They were positive on all counts, with strong markets complemented by net inflows into most strategies and outperformance as well. Overall, FUM grew by 11% to $5,268m, supported notably by the MSCI Emerging Markets Index, which was up 10%. The EM strategy also saw welcome net inflows of $45m, with Developed Markets receiving another $101m, and Opportunistic Value $7m. These three strategies also outperformed due to narrowing discounts and some positive NAV movements. The Frontier strategy was the exception, with no net flows and underperformance.

Companies: City Of London Investment Group

18 Apr 19

Encouraging year-end trading update, slight EPS boost

An encouraging year-end update, with profits slightly ahead of expectations, although signalling that the trading environment has become more challenging. Revenue growth has been achieved across all regions. New banking facilities have been announced, providing firepower for future acquisitions. We slightly upgrade 2019 expectations, with a 1.5% EPS increase. Momentum is returning to the shares but they still look attractive at these levels, with 26% upside to our maintained 270p price target.

Companies: Trifast

02 Apr 19

Taptica and RhythmOne

The two leading adtech businesses on the AIM market – Taptica and RhythmOne – have come together, combining their programmatic advertising platforms to create a major player in the global video advertising market. Following completion of the deal, we now release preliminary forecasts for the combined entity. Taptica’s management has only just received access to a very complex and disparate organisation in RhythmOne, and there will doubtless be an evolution of expectations as understanding and integration proceeds. RhythmOne trading for the YE March 2019 was below expectation, but under Taptica’s management the combination nevertheless represents an excellent opportunity going forward.

Companies: Taptica International

16 Apr 19

Q1 2019 AIM Review

2019 started well for investors with U.S. stocks rallying on the back of trade talks between China and the U.S. resuming. Sterling rebounded in Q1 2019 as expectations built the UK would avoid a “no deal” Brexit, providing a further tailwind to more internationally focused UK companies. This sentiment spread across the globe and filtered its way down into small caps.

Companies: PRSM KMK SYS RAI MNO CCS MANO CBOX KGH

25 Apr 19

Thin Film Electronics - Route to break-even in FY21

Thinfilm’s recent investor update provided details on how its revised strategy, focused on driving market adoption of its NFC solutions, will potentially take the company to break-even in FY21. We will update our estimates to reflect the information given in the presentation.

Companies: THIN FILM ELECTRONICS

25 Apr 19

Anglo African Oil & Gas - CPR and SNPC payment update

AAOG has released an update on the timing and scope of its Competent Persons Report (CPR) for the Tilapia Licence in the Congo and the repayment of funds owed by SNPC, the Congolese national oil company. The CPR has slipped slightly, but this makes sense as it is important to understand the potential of the Djeno resource ahead of any decision on future activity across the licence. SNPC has paid the first $600k monthly instalment on the monies owed to AOOG, and negotiations to exchange a portion of SNPC’s equity interest in the Tilapia field in exchange for the debt forgiveness are ongoing.

Companies: Anglo African Oil & Gas

25 Apr 19

Acorn Income Fund - High-yielding fund with recovery potential

Acorn Income Fund (AIF) is one of the best-performing funds in the AIC universe over the past 10 years. However, it suffered a period of poor performance in 2018, as its high level of structural gearing compounded the ill effects of a sell-off in UK small-cap equities, in which c 75% of its portfolio is invested. The managers of the small-cap portfolio, Simon Moon and Fraser Mackersie at Unicorn Asset Management, remain very positive on the outlook, citing highly attractive valuations for the kinds of profitable, cash-generative, dividend-paying companies they seek. Meanwhile, the managers of AIF’s income portfolio (Paul Smith and team at Premier Fund Managers) are focused on generating absolute returns from a diversified selection of short-dated bonds, investment companies and structured notes.

Companies: Acorn Income Fund

25 Apr 19

Advertising revenue growth supported by strong audience shares

Q1 19 was satisfactory for advertising revenue. Group advertising revenue increased by +2.9%, o/w +2% for advertising revenue from the free-to-air channels. This was supported by a stable average audience share of the FTA channels at a high level (21.5%) on the WRP<50 segment. The EBITA margin improved (+0.7pt to 18.6% of revenue) thanks to additional synergies from the integration of the Radio business.

Companies: Metropole Television

25 Apr 19

Deinove - Preparing for DNV3837 Phase II trial start

With its latest H218 report, Deinove reiterated its focus on the major areas of bioactives and antibiotics. The most recent significant announcement was its collaboration with the Institut Pasteur, which will provide access to a selection of bacterial strains. The upcoming initiation of the company’s first Phase II trial with DNV3837 for C. diff infections is the key milestone this year. According to the released details, the trial is expected to start in mid-2019 in the US and Germany, enrol 40 patients and last for about a year. If positive, the next step would likely be a Phase III trial. Deinove’s commercial activities will continue to focus on the two marketed and several other cosmetics ingredients in development. Our valuation is virtually unchanged at €66m or €4.2/share.

Companies: Deinove

25 Apr 19

EPS and dividend guidance revised upward

Iberdrola released a strong set of Q1 19 results, higher than the consensus and our own expectations. Supported by higher network tariffs, and higher average achieved prices, when total production was slightly down. Consequently, the group moved its FY guidance for net profit and dividend from mid to high single-digit growth in both net profit and dividend.

Companies: Iberdrola

25 Apr 19

Decent start to the year; full-year targets reinstated

FY19 started on a positive note with sales up 15.8% (at CER) driven by sustained market share gains for key oncology drugs – Somatuline, Onivyde and Cabometyx. The consumer healthcare segment also returned to the black after three consecutive quarters of negative organic growth. As the positive growth momentum is likely to continue, the FY19 financial targets look comfortably within reach. Buy recommendation reiterated.

Companies: Ipsen

25 Apr 19

Q1: outlook maintained despite the soft quarter

Q1 results are in line with the trading update released at the beginning of the month. While the quarter is weak with segment revenues at $142m (-28% yoy), the outlook is maintained, supported by an order book increase of $75m qoq to $238m and a pricing environment up 35% compared to 2018 (for contract work) as commented by management in the press release.

Companies: PETROLEUM GEO-SERVICES

25 Apr 19

Worst avoided ahead of next week’s AGM

This set of quarterly results was even more important than the group holding a particularly interesting AGM next week. Management has already bolstered its defences against Mr Bramson who is targeting a seat on the Board. We consider that the first quarter performance of the scrutinised CIB division proved relatively resilient, continuing to show good momentum vis-à-vis peers and strong cost control.

Companies: Barclays

25 Apr 19

Cost inflation, the first impact from money-laundering issues

Swedbank released this morning its numbers for Q1 19. Profit before loan losses is 6% above expectations, driven by volatile trading income. Management increased its cost guidance for 2019 (by SEK1bn). The CET1 ratio is disappointing as it is 40bp lower qoq.

Companies: Swedbank

25 Apr 19

Q1 19: strong start of the year

The Q1 19 trading update underlines a strong start to the year. Following this trading update and guidance, we expect to increase our sales forecasts as well as our EBITDA in line with the revenue increase, namely by about 5%. This should compound into a significant growth of net income from some 17% to slightly more than a 20% increase for FY19 compared to adjusted net income of FY18.

Companies: Crh

25 Apr 19

An expected weak Q1 pending the current restructuring bearing fruit from H2

Q1 revenues and EBITDA were down respectively by 3% and 4% yoy and lfl. A slightly disappointing performance, although it was expected and similar to the Q4 performance. We maintain our opinion at Add. The group is restructuring… getting ready for, in particular, a future significant market share on the TV side in Sweden, Norway and Finland. EBITDA should improve from H2 while the acquisition of Bonnier Broadcasting should strengthen Telia in the video content consumption market.

Companies: Telia Company

25 Apr 19

Cenkos: Synnovia Plc - A slight blip in what has been a positive year

Synnovia has provided a further trading update at FY19A's close, confirming the effect of previously highlighted capacity constraints in the Films division have not been fully overcome, leading to FY19A results being “marginally below” our previous expectations (revenues £83.1m, adj EBITDA £7.8m, adj EPS 10.3p p/s). While this event, along with additional costs associated with Synnovia's continuing investment programme, will now hinder meaningful EPS growth this year, we consider the former to be a temporary operational issue which is set to be resolved early into FY20E. Despite this, Synnovia is still set to deliver strong, organic YoY revenue growth (+9%) and profit/EPS improvement (albeit more modestly) this year.

Companies: Synnovia

25 Apr 19

Heliad Equity Partners - Management change amid weak results

Heliad has experienced a c 50% reduction in NAV per share in FY18 and reported a loss per share at €5.72. This was driven by the overall negative market sentiment, but also company-specific challenges, in particular at Sleepz. We understand that the recent changes in the company’s management (with two board members of its largest shareholder FinLab replacing the previous CEO) are a consequence of this poor performance. The company’s shares now trade at a c 29% discount to last reported NAV.

Companies: Heliad Equity Partners GmbH & Co

25 Apr 19

Avon Rubber - Mask system export order secured

Avon Protection has successfully secured another of its military sector prospects. The award of a $16.6m contract for C50 mask systems by a customer in the rest of the world segment will commence delivery in Q4 FY19, further securing growth expectations at Avon Protection for FY19. It also helps compensate for the flatter than expected year at milkrite | Interpuls noted in the AGM statement. Added to the recent major DoD awards for M69 aircrew mask systems and M53A1 mask and powered air systems, it should ensure a strong basis for our forecast growth in FY20.

Companies: Avon Rubber