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15 Jan 20

Games Workshop Group - ‘Record sales and profit’ again

Games Workshop’s (GAW) interim results are ahead of expectations. The highest rates of revenue growth were achieved in the channels with the highest operating margins, ie Trade (40% margin) and Online (64% margin). This has produced a strong improvement in free cash flow generation and ROCE has improved from 96% to 111%. We upgrade our forecasts for FY20 and FY21 by a further 3% following the 9% upgrade in November. Our DCF-based valuation increases by 11% to 5,748p.

Companies: Games Workshop Group

20 Jan 20

Rapid growth confirmed

Kape have announced a full year trading update confirming the expected strong growth in top-line and adjusted EBITDA. Kape’s sales growth accelerated sequentially to 19% h/h in H2 (H1: 7%), supported by continued growth in the Group’s core Digital Privacy segment. Full year revenues of c.$66m (N1S: $68.9m) were achieved after some reallocation of marketing investment towards Digital Privacy (sales recognised over time), which has in turn led to an improvement in revenue visibility for future periods. Adjusted EBITDA is now expected to be ahead of expectations: ($14.5m; N1S: $13.9m) as a result of a higher than expected proportion of Digital Privacy sales. Management guidance targets revenue growth of 85% and adjusted EBITDA growth of >150% in FY’20E (inc acquisition of PIA), in-line with expectations, and we make no changes to forecasts at this time. FY’20E OpFCF yield is forecast at 5%, ahead of comparative high-growth peers.

Companies: Kape Technologies

14 Jan 20

IQE - Leading innovation from within

The breadth of IQE’s technology portfolio and ability to serve compound semiconductor chip customers in the US and Asia puts it in a good position to benefit from rising demand for compound semiconductor applications for 5G and connected devices. The share price has been hit by the shift to Asian-centric supply chains caused by US-Chinese trade tensions, and resultant reductions to management guidance. Although the timing of a recovery is difficult to gauge, we see scope for earnings recovery as IQE secures additional contracts in Asia and leverages its IP portfolio into sustainable profit growth and cash generation.

Companies: IQE

16 Jan 20

CloudCall

FY trading update: In rude health; Buy

Companies: Cloudcall Group

20 Jan 20

Kape Technologies

Strong trading update; Buy

Companies: Kape Technologies

14 Jan 20

Boku - Payments profits support Identity growth

Boku’s FY19 trading update confirmed that it met consensus expectations for revenue and EBITDA, albeit aided by recognition of one-off revenues of $3.2m in H2. The Payments business showed strong underlying revenue growth driving a 90% increase in adjusted EBITDA while the Identity business made progress in building out supply outside of the US. We continue to consider the Payments business as the engine for profits while we view the Identity business as a longer-term investment in growth.

Companies: Boku

20 Jan 20

The Industrial Revelation

US factory output rises in Dec better than expected, Schlumberger sees continued weakness in North America, Fastenal saw a continued slowdown in Q4

Companies: HEAD HILS HTG JHD RNO SCPA TRI ZTF SOM

16 Jan 20

LIBERUM: Judges Scientific* - FY19E EPS beat

We increase our FY19E EPS by 4.7% to reflect an encouraging FY trading update from Judges. Our FY20E forecasts remain cautiously set and we think that the risks are to the upside as the year progresses.

Companies: Judges Scientific

20 Jan 20

Hurricane Energy - Updated drilling campaign for 2020–21

In December 2019, Hurricane Energy provided a trading and operational update on its activities, announcing a strong ongoing performance of the Lancaster early production system (EPS), with well tests supporting guidance of 20,000bopd for FY20 (before operational downtime). Hurricane was also granted a five-year extension to its P1368 licence, covering Lancaster and Lincoln, which resulted in changes to its near-term work programme. One or more sub-vertical wells will be drilled on both Lincoln (in 2020) and Lancaster (in 2021) to determine the maximum vertical extent of each reservoir. Hurricane estimated FY19 revenue of c $165m and year-end unrestricted cash of c $150m, relatively in line with our estimates for the year. Our risked valuation stands at 109.9p/share (from 102.8p/share) as we roll forward our NAV, adjust our short-term oil price assumptions and update forecasts to reflect Lancaster EPS performance and the 2020–21 work programme.

Companies: Hurricane Energy

20 Jan 20

LIBERUM: AFH Financial Group* - Impressive growth and positive outlook

In FY19 AFH delivered 8% organic net flows and revenues are up 47% yoy. The revenue model change in Protection responds to investor concerns and leads to significantly increased cash conversion.

Companies: AFH Financial Group

20 Jan 20

Cenkos: Seeing Machines Ltd -- The DMS challenge palpable at CES2020

Interior and Occupant Monitoring was a notable theme of CES2020 with around fifteen different concepts demonstrated, up from three in 2019. However, these did not outnumber Driver Monitoring System (DMS) demonstrations and did little to deflect from the openly discussed challenge of sourcing and designing reliable primary safety DMS at appropriate costs for the automotive mass market. This task is being exasperated by a confluence of factors including vehicle design complexity and regulatory time pressure, and especially in the absence of knowing what technical specifications are required to meet the forthcoming Euro-NCAP and EC certification standards. We view the many demonstrations of IMS/OMS and emotional analysis as a distraction from the DMS challenge and, in this respect, our primary thesis for Seeing Machines remains unchanged following what we saw at CES2020: We believe Seeing Machines remains on track to win the largest market share of the DMS safety system market. We maintain our Buy recommendation and 12p DCF derived price target which is based on a 16% discount rate.

Companies: Seeing Machines

15 Jan 20

LIBERUM: Frontier Developments* - Successful PZ launch underpins F/Cs

Frontier has provided a trading update for H1 FY20 which shows revenues up nearly 30% sequentially and confirms the very successful launch of fourth franchise Planet Zoo. Further, Management highlight that all four of Frontier’s game franchises performed well, as expected, over the Christmas period which supports FY forecasts. The next 12 months will see a major paid-for release for Elite Dangerous, the console launch of Planet Coaster as well as a well-planned and increasingly optimised PDLC schedule for JWE and PZ. We retain our Target Price of £18 and our view that Frontier is a core holding in a UK SMID fund.

Companies: Frontier Developments

15 Jan 20

Cenkos: 1pm plc -- Sustainable business in difficult markets

1pm's interim results are robust but slightly weaker than expected with revenues of £15.6m (-2% YoY) and adj EBIT of £3.2m (-21%). Originations growth remained healthy through difficult macro conditions, with the hybrid model allowing 1pm to generate income without taking on unnecessary risk. Consequently, in combination with the costs in running a long-term sustainable business, 1pm is encountering some profit headwinds. We have updated our forecasts accordingly. The shares remain materially undervalued on most metrics.

Companies: 1PM

14 Jan 20

A record Christmas drives upgrades

Boohoo Group has delivered a stellar performance over the key Christmas trading period resulting in a further upgrade to FY20 guidance, its third since 5 th September. Strong growth has been seen across all brands in all key geographical regions. We note the excellent performance seen at the Group’s most mature brand boohoo, where sales in the four months to December are up 42%, an acceleration on the 27% YOY growth posted in Q1 and a continuation of the exceptional 41% growth seen in Q2 of this year. Revised EBITDA margin guidance of 10.0% to 10.2% (previously c.10.0%) is after accounting for investment in three brands acquired in the year and implies strong underlying trading in the Group’s more established brands (boohoo.com PLT and Nasty Gal). The Group continues to deliver an impressive cash performance, with £245m net cash at 31 December.

Companies: Boohoo.Com

14 Jan 20

Consistently high achiever

It’s sometimes easy for investors to get caught up in the latest ‘buzz doing the rounds’, and lose sight of the big picture. Namely finding quality stocks that can out-perform across the economic cycle. Cue Watkin Jones, a developer/manager of large scale, multi occupancy accommodation, who - since IPO’ing at 100p in March 2016 - has delivered a total return of 163% (28.6% IRR):- split 142p capital appreciation and 21p dividends.

Companies: Watkin Jones

20 Jan 20

Positive update on Cascadura for Touchstone Exploration

20 Jan 20

Henderson International Income Trust - Overseas income fund with attractive total returns

Henderson International Income Trust (HINT) was launched in 2011 with the aim of enabling UK-based investors to diversify their sources of income by investing overseas. As shown in the chart below, the UK market suffers a high degree of dividend concentration, with the top 10 dividend payers accounting for 55% of total UK dividends in 2018 compared with 9% for the top 10 payers globally. Since launch, HINT’s investors have enjoyed total returns of c 10% a year, supported by well-covered dividends that have grown at a compound annual rate of 5.2%. While manager Ben Lofthouse’s value-oriented investment approach has been somewhat at odds with growth- and momentum-driven markets recently, he is finding plenty of attractive investment opportunities.

Companies: Henderson International Income Trust

20 Jan 20

Cenkos: Seeing Machines Ltd -- The DMS challenge palpable at CES2020

Companies: Seeing Machines

20 Jan 20

Proactive Analyst Ed Stacey looks at Itaconix

20 Jan 20

Executive interview - CentralNic Group

20 Jan 20

Proactive Analyst Ed Stacey's take on Location Sciences

20 Jan 20

SP Angel . Morning View

Sirius Minerals (SXX LN) / Anglo American (AAL LN) - Anglo American agrees to buy Sirius Minerals for 5.5/s (£404m) | Chaarat Gold* (CGH LN) 36p, Mkt Cap £169m – Issue of shares | Keras Resources* (KRS LN) – Keras hires local team for Q1 start of production

Companies: AAL SXX CGH KRS

20 Jan 20

Oil & Gas Daily Flow

Union Jack Oil* (UJO LN), STRONG BUY – 0.70p TP: Wressle Development granted Planning Consent on appeal | Touchstone Exploration (TXP LN): High pressures encountered during Cascadura-1ST1 testing | Echo Energy (ECHO LN): High pressures encountered during Cascadura-1ST1 testing | President Energy (PPC LN): Subscription for new shares by Trafigura, conversion of debt into equity | Trinity Exploration & Production (TRIN LN): Q4 2019 Operational Update

Companies: UJO TXP ECHO PPC TRIN

20 Jan 20

Glad Q3 tidings….

Distil has performed strongly in its core Q3 trading period covering October to December despite a backdrop of economic uncertainty and generally weak consumer demand. Against a very tough comparative of 29% growth in Q3 last year, Distil has reported revenue growth of 7% for Q3 this year. This continues to be driven by RedLeg Spiced Rum, with volume sales increasing by 16% in an intensely competitive market. With the company remaining positive on the outlook for Q4, it expects full year profits to be ahead of last year and broadly in line with market expectations.

Companies: Distil

20 Jan 20

Location Sciences - Verify product gaining presence

Location Sciences, the world leader in location verification for mobile advertising, recently released a trading update for the financial year to December 2019. The main focus remains the Verify product which verifies location data for targeted mobile advertising campaigns.The company reports that

Companies: Location Sciences

20 Jan 20

Cenkos: 88 Energy Ltd -- Quarterly Update

This morning, 88 Energy released its quarterly update ahead of the spudding of the potentially transformational Charlie-1 well in February. Charlie-1 will appraise BP's 1991 Malguk-1 well, which encountered oil shows across multiple horizons but was not tested due to operational complications. Charlie-1 will intersect seven stacked targets, with a total gross mean prospective resource of 1.6bnbbls (480mmbbls net to 88 Energy). As part of farm-out to Premier Oil, Premier will fund the cost of the well up to a cap of US$23m. With everything on track for a February spud, we look forward to one of the most anticipated onshore wells in 2020. We maintain our 4.8p price target and our BUY recommendation.

Companies: 88 Energy

20 Jan 20

Union Jack Oil hails huge Wressle site victory

20 Jan 20

Welcome strategic move

BAE Systems has entered into an agreement to buy Collins Aerospace’s Military Global Positioning System business (GPS) and Raytheon’s Airborne Tactical Radios business. We expect the acquisition (fully financed by additional debt) to be both EPS and cash flow accretive while maintaining a healthy balance sheet for further potential acquisitions.

Companies: BAE Systems

20 Jan 20

The City Pub Group grows

20 Jan 20

Merkel's initiative for a peaceful Libya

German chancellor, Dr Merkel, had invited all relevant ‘players’, which are directly and indirectly involved in this complex situation. Germany is valued as an ‘honest intermediary’ in this currently-failed country. But Germany has some interest in solving this issue, which are not related to the official ones (e.g. migration to Europe): business.

Companies: BASF