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04 Mar 21

LIBERUM: Plus500* - Conditions remain attractive

In addition to highlighting the relatively attractive underlying conditions that prevailed in February, in this note we introduce our FY23 estimates. We believe that the latter helps to further highlight the attractive valuation and growth potential offered by the group, as well as the significant valuation discount that Plus500 trades on relative to its peers. We see the latter as inappropriate given the clear benefits of the group’s best-in-class platform, its scalable technology and agile marketing algorithms. We expect these factors to drive continued market share gains and superior financial returns, and as a result, we reiterate our BUY rating.

Companies: Plus500 Ltd.

05 Mar 21

RBG Holdings - Promising Outlook for 2021 – Updating Earnings

The recent capital markets day presentations provided a clear strategic direction and purpose to the RBG Holdings strategy and the resulting diversification of operations. The quality of Rosenblatt law has continued to show through and the flexible approach to staffing, allied to the business mix and fee arrangements, provides excellent margins. The branching out into other related professional services is strategically sensible and recent updates from the Group suggest execution is improving, particularly this morning's announcement of further deal completions at Convex. There's lots to like in Rosenblatt's business and we maintain our buy rating while seeing medium term strategic and competitive challenges for other mid-market UK focused law firms.

Companies: RBG Holdings Plc

01 Mar 21

Digital momentum building

Reach’s prelims were ahead of N1S estimates for H2 sales and EBITDA (1% and 3% resp.) and showed excellent progress with both the customer value strategy (‘CVS’) and business transformation agenda. Whilst FY’20 Group sales were 15% y/y lower as CV19 impacted Print, Digital revenue grew +11% y/y to £118m (H2: +20% to £70m), supported by a strong uptick in user engagement with content (page views/user: +39% y/y) and further progress in signing up new registered users (Feb’21: 5.8m; Dec’20: 5.0m; Dec’19: 0.7m). Meanwhile quick action to mitigate CV19 impact on Print volumes and execution on the business transformation plan saw AOP margins increase 50bps y/y, with Group H2 AOP down just 4% y/y (FY’20: -13%). Looking ahead, there were highly encouraging results from initial campaigns on the Group’s ReachID platform (+10%-40% uplift in click-through rates on early campaigns), whilst further cost savings of £11m are announced through rationalisation of the Group’s Print sites. Strong cash performance was reflected in £42m of cash inflow (post pension and historic legal and contractual payments), which gives management confidence to declare a final cash dividend of 4.26p/share. The path to sustainable top-line and FCF growth remain very much open, with FY’21E adj FCF of £120m generating an 11% yield at current valuation.

Companies: Reach plc

08 Mar 21

Webselenese – a key strategic acquisition…

…and immediately earnings enhancing

Companies: Kape Technologies Plc

01 Mar 21

AFC Energy (AFC LN) - Final results

Final results from AFC are very close to our projections, with net cash slightly ahead of our expectations. There is no new news in this announcement, and we marginally edge up the losses in 2021E and 2022E due to increased activity levels as the Group looks to capitalise on the vast opportunities available. We remain excited about the long-term investment thesis we set out recently and maintain our target valuation of 191.5p per share. As we have previously highlighted, our valuation excludes what we consider to be significant growth opportunities highlighted in the note.

Companies: AFC Energy plc

04 Mar 21

LIBERUM: Futura Medical* - Financing positive, Asia deal struck and EU approval on-track

Futura has secured £1.5m from convertible loan notes with a Hong Kong based PE fund. There is potential for a further £0.5m through warrants. It has also signed a commercial deal for its erectile dysfunction product MED3000 for certain Asian countries including China. Under the deal its partner will fund all development and related costs with Futura set to receive 50% of future profits. Lastly, its EU regulatory filing remains on-track with approval likely in the coming months in our view. We think this update gives management the room to deliver an EU approval which can unlock a major out-licensing deal whilst it also secures costless access for the Asian opportunity. This will put the firm on a strong footing to execute its US study this year that should lead to a further value inflection. BUY.

Companies: Futura Medical plc

08 Mar 21

LIBERUM: Frontier Developments* - The Odyssey begins this month

We believe that all of Frontier’s games will continue to make strong revenue contributions through H2 of FY21, but the key sales event will be the release of Elite Dangerous: Odyssey expected before the end of May. Our FY21 revenue forecasts look well underpinned, but in this report we look at the upside sensitivity to our numbers as c.0.5m active Elite players embark on a new Odyssey, and the company seeks to attract 3.5m+ of inactive/lapsed players back into the franchise. Simultaneously, there is an intriguing potential pool of eight million Elite base game owners following on from last year’s Epic Free Week. No changes to forecasts, TP £35.40.

Companies: Frontier Developments Plc

08 Mar 21

Touchstone Exploration - Pedal to the metal

Aside from a minor delay to its gas testing programme Touchstone is keeping its Ortoire exploration and development plans moving along rapidly. Q2 will see several important catalysts – oil and gas testing results from Chinook and Cascadura Deep, the start-up of production at Coho and drilling at Royston, its largest exploration prospect – which could add another 30% to our risked-NAV. A third rig will also be employed, allowing the pace of exploration and development drilling to accelerate from late 2021. There is a lot still to come from TXP.

Companies: Touchstone Exploration Inc

02 Mar 21

WHI Morning Comment: AFC Energy (AFC) - AFC Energy's Final Results

AFC Energy's Final Results for the year ended 31 October 2020 indicate the company is in a position of strength and at inflection point of sales growth. Results were better than we had forecast with a reported loss of £4.2M (WHIe £4.5M) and cash flow from operations of £4.3M (WHIe £4.2M). Most importantly, the company ended the period with a stronger cash balance than we had expected of £31.6M (WHIe £29.9M) reflecting the capital light strategy the company is applying. The year-end confirmed order book of £1.1M indicates that AFC Energy, after decades of investment, is past the inflection point that is translating its globally unique technology into a highly-compelling, long-term commercial growth opportunity.

Companies: AFC Energy plc

02 Mar 21

Delivering sustainable, quality growth

Begbies Traynor’s track record demonstrates its ability to generate consistent growth in increasingly sustainable revenues across the economic cycle. This stems from a strategy driven by value-accretive acquisitions over the past six years, designed to build both upon existing and develop new, complementary disciplines. Returns have also been enhanced by organic investment in service line expansion, employee development / recruitment, and processes focused upon improved working practices and client service. The results are clearly visible in 16% CAGR in EPS from FY16-FY20, consistently positive cash generation and 8% pa dividend growth since 2017. Earnings growth is significantly ahead of the UK insolvency market (4% CAGR FY16-FY20), reflecting improved market shares from an increasingly diversified business, divisional cross sales / referrals, and the benefit of the acquisition strategy.

Companies: Begbies Traynor Group plc

02 Mar 21

Emphatic validation on Oxgene sale, plus upgrades

Mercia has validated the model emphatically with the sale of Oxgene, the second-largest portfolio investment, for £30.7m. This is nearly double the carrying value and a £14.6m realised gain, equating to a 5x return/51% IRR. 3rd party funds also benefited. This underscores embedded value, prudent carrying values and the “Complete Connected Capital” model. An accompanying update points to strong underlying performance which drives a 56% FY21e adj. EBITDA upgrade and +13-15% in outer years. The shares trade at an unwarranted ~30% discount to our revised NAV (+12%) and a ~40% discount to our SOTP intrinsic value.

Companies: Mercia Asset Management PLC

05 Mar 21

New skin

Aviva released its 2020 figures, with an operating profit of £3,161m and an IFRS profit after tax at £2,910m up 9.2% yoy. The Board will propose a final dividend of 14p/share. The insurer announced new financial targets with at least $5bn of cumulative cash remittance, £300m of cost reduction and a debt leverage ratio <30%. This update was expected regarding the sale of many operations in 2020. Aviva plans also to become a net zero carbon emissions company by 2040.

Companies: Aviva plc

01 Mar 21

THE MONTHLY March 2021

UK railway privatisation, which was launched in the mid-1990s, has finally turned full circle: the Department of Transport has recently confirmed that its controversial railway franchise system will be scrapped. In this month's feature article, Nigel Hawkins, the Infrastructure analyst at Hardman & Co, examines the 25-year history of railway privatisation and chronicles its ups and its downs. The successes of railway privatisation, such as new rolling stock, are addressed, along with the many shortcomings, which included minimal vertical integration. With the winding up of the franchise system, the UK railway sector is effectively reverting to its former status as a nationalised industry, a shift started with the renationalisation of the collapsed Railtrack – later re-badged as Network Rail – in 2001.

Companies: ARBB BBGI CLIG DNL FLTA ICGT OCI PCA PIN PXC RECI SCE TRX SHED VTA YEW

02 Mar 21

Regional REIT - Q420 dividend as guided

Regional REIT’s (RGL’s) Q420 DPS, in line with the company’s previous guidance, takes the aggregate FY20 DPS to 6.4p, and is supported by continuing strong rent collection. The company has previously indicated that it was targeting dividends to be fully covered by EPRA earnings and we expect this to be confirmed when detailed FY20 results are released on 25 March.

Companies: Regional REIT Ltd.

04 Mar 21

Cenkos: HeiQ Plc -- Synbio Inside: Chrisal acquisition

HeiQ has announced the acquisition of a 51% stake in Chrisal, a Belgian company developing pre- and probiotic formulations (Synbiotics) to support a healthy, stable microbiome on the surfaces to which it is applied. HeiQ will pay €7.5m (in cash and shares) for its majority holding, providing access to a complementary technology platform and adjacent markets such as cosmetics, surface hygiene treatment and water purification. Chrisal generated revenues of €5.5m in the 12-months to Dec-20 and an operating profit of €1.6m. We maintain our Buy recommendation on HeiQ.

Companies: HeiQ PLC

08 Mar 21

BioPorto Diagnostics - Multiple upcoming readouts

BioPorto has started 2021 firing on all cylinders as it prepares to resubmit its application to the FDA for the paediatric NGAL Test for detecting acute kidney injury (AKI) in summer 2021. This should set it up for a clearance decision in H221, after which it plans to submit the application for the adult NGAL Test. Concurrent with this, the company is initiating clinical testing of its COVID-19 dipstick. It expects this testing to be complete in early 2021 and emergency use authorisation (EUA) to be filed thereafter. We are taking this time to provide our comprehensive clinical outlook.

Companies: BioPorto (BIOPOR:CPH)BioPorto A/S (BIOPOR:CSE)

08 Mar 21

Cenkos: United Oil & Gas Plc -- Spudding of ASD-1X Well

Following the significant success of the ASH-3 development well, UOG has announced the spudding of the ASD-1X exploration well in the Abu Sennan licence, onshore Egypt. It is anticipated that the well will take up to 60 days to drill and complete, and if successful can be rapidly placed on production through existing infrastructure. Subject to final approvals a third well for 2021, the AJ-8 development well, targeting the Abu Roash and Bahariya reservoirs in an undrained area of the Al Jahraa field, will be drilled after completion of the ASD-1X well.

Companies: United Oil & Gas Plc

08 Mar 21

Dear LSEG...

The London Stock Exchange Group’s (LSEG) share price is down another 3% this morning. It follows a sharp fall of 13% last Friday following the FY2020 earnings release. The FY2020 results were not the cause of the sharp fall. The sluggish guidance regarding the costs for 2021 and following years and the recent sharp drawback in growth stocks (rich P/E or EV/EBITDA) have contributed to this (almost) 15% decrease in the company’s share price.

Companies: London Stock Exchange Group plc

08 Mar 21

SP Angel Morning View:

AfriTin* (ATM LN) – Uis tin mine Q4 and 2020 production report Beowulf Mining* (BEM LN) – MoU signed with EAMPL Bluejay Mining* (JAY LN) - BUY - Valuation 40p – Ilmenite prices rise 4% to $260-270/t W Resources (WRES LN) – Proposed share consolidation

Companies: ATM BEM JAY WRES

08 Mar 21

SP Angel Oil & Gas Daily Flow: 08/03/21

Market update - 08/03/2021

Companies: GENL SOU UOG

08 Mar 21

SP Angel Healthcare Conditions- 08-03-2021

Tekcapital PLC (TEK.L*): 510(k) Clearance Granted for Belluscura's X-PLO2R POC Avacta (AVCT.L): Rapid Antigen Test Detects SARS-CoV-2 Variants

Companies: Tekcapital Plc (TEK:LON)Avacta Group PLC (AVCT:LON)

08 Mar 21

Material upgrades following ‘robust’ H2

In a very positive pre-close trading update, finnCap announced that it has traded ‘materially’ ahead of the Board’s (and our) expectations so far during the second half of its current financial year to the end of March 2021. With evident strength across the Group, the capital markets business performed well in finnCap’s Q3 while, so far in Q4, the M&A team saw the closure of a number of deals accelerate in the run-up to the UK budget. Guidance that revenues will now be in excess of £43m leads us to upgrade our revenue and EBITDA estimates for FY 2021E by 20% and 43% respectively. CEO Sam Smith noted that finnCap had continued to invest in the business during H2 and we believe that its strategy of developing a full suite of products for growth companies will continue to benefit the Group in a sometimesvolatile operating environment.

Companies: finnCap Group plc

08 Mar 21

WHI Flash Light: Malvern Interntional (MLVN) - Receipt of debtors; pathway numbers rising; new university group partnership on track

This morning's update from MLVN marks a working capital milestone, with a £760k receipt in respect of the significant trade debtor highlighted by the company in its January update. On the back of this, the company anticipates repaying the short-term loan facility provided by Boost & Co., which amounted to £350,000 and which was drawn in full as of January 8th, with interest charged at 11.25% p.a. In addition, MLVN has announced university pathway student numbers including the January intake, which stand at 167 – this represents a 90% YoY increase, which we view as a very creditable outcome in a year marked by Covid. The update also lays out progress in other areas of the business and flags the launch later this month of the international foundation year previously announced with a new university partnership organisation, the Northern Consortium of universities (NCUK), which has the potential to form a significant new strand of business from September 2021, while also diversifying MLVN's university pathway strand.

Companies: Malvern International plc

08 Mar 21

Capital Access' Hot Off The Wires - The Day Ahead

Today's news & views, plus announcements from RIO, CRH, DLG, DOM, TEAM

Companies: Rio Tinto plc

08 Mar 21

Allenby Capital TMT Update - 08.03.21 - BIRD.L, TERN.L

Blackbird plc* (BIRD.L, 22.5p/£76m) | Tern plc* (TERN.L, 8.4p/£27.7m)

Companies: Blackbird PLC (BIRD:LON)Tern Plc (TERN:LON)

08 Mar 21

Solid trading, investing in growth

Beeks Financial Cloud Group’s (“Beeks”) H1 21A results in our view demonstrate a solid trading performance against a COVID-impacted backdrop. Revenue in the core institutional business grew strongly during the period (+31% YoY), with underlying EBITDA also exhibiting double-digit growth. Operational highlights include the launch of the Beeks Analytics service and continued progress with the network automation project, as part of the Beeks Private Cloud. We adjust FY 21E estimates only to reflect increased Depreciation & Amortisation costs and introduce FY22 forecasts for the first time.

Companies: Beeks Financial Cloud Group Plc

08 Mar 21

Results demonstrate growth as well as security

17 February’s strong results for 2020 have prompted us to raise 2021E dividend to 6.25p, from 6.125p. Expansion of the market for modern primary medical assets accelerates and PHP’s confidence in its repeated ability to deploy the fresh equity raised in 2020 (and previous years) has had a direct positive effect on shareholder returns. We think this REIT has significant per-share value growth potential, through capital deployment prudently raising LTV, through measured but accelerating rent rises, prospective reductions in cost of debt and overhead cost efficiencies from the recent internalising of the management structure.

Companies: Primary Health Properties PLC

08 Mar 21

Continued strong trading drives further upgrades

Exceptional trading conditions through the Chinese Lunar New Year in February have prompted a further positive trading update from ECO, indicating revenue and EBITDA for FY21 will be significantly ahead of estimates that have already been upgraded several times. Conditions have also remained buoyant in markets such as the US and Brazil, with other territories remaining in line. As a result, we upgrade our FY21 revenue forecasts by a further 11% to £101.7m which translates to an adj EBITDA upgrade of 32% to £19.2m. We are also increasingly confident that the shift in China is structural rather than purely a recovery postASF. As such, we now factor in 3% group revenue growth in FY22 (from flat) and mid-single digit growth in FY23, supported by the familiar pattern of new geographic registrations and additional indications for lead product Aivlosin.

Companies: ECO Animal Health Group plc

08 Mar 21

Webselenese – a key strategic acquisition…

…and immediately earnings enhancing

Companies: Kape Technologies Plc

08 Mar 21

SP Angel Spec Sits: Belluscura Granted 510(k) for X-PLO2R (TEK LN)

The US FDA has granted clearance for the use of its X-PLO2R portable oxygen concentrator (POC). The X-PLO2R POC can deliver 95% pure oxygen to patients 24 hours a day, 7 days a week. The device is lightweight, and portable, designed to replace the metal oxygen tanks and heavy portable oxygen concentrator devices currently available on the market. The global medical oxygen concentrator market was valued at US$1.6b in 2018 and is expected to grow to US$2.4b by 2025 (8% CAGR), according to Global Market Insights.

Companies: Tekcapital Plc