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12 Jun 18

LIBERUM: Frontier Developments* - Strong outlook across 3 franchises

The trading update for the FY to May'18 shows revenues and profits ahead of our forecast with strong performances from both Elite Dangerous and Planet Coaster. This highlights the success of Management's multi-year franchise strategy as a games developer and self-publisher.

Companies: Frontier Developments

12 Jun 18

53% group growth delivered in Q1, trading in line with FY expectations

boohoo.com has delivered solid Q1 Group revenue growth of 53% to £183.6m, with standout like-for-like growth of 158% delivered by PLT. At a Group level, the UK saw strong growth of 49%, while international sales were up 60%. Group gross margins increased 100bps to 55.2%, reversing the downward trend seen over the last few years, driven by strong full-price sales performance in PLT. The boohoo brand delivered growth of 12%, however we flag this is versus a tough comp of 48% growth in Q118, with increased sales and promotional activity early in the quarter causing a reduction in gross margin to 52.0% from 53.9%. Promotional activity has since slowed, and the GM exit rate actually was up YoY, giving scope for the business to implement growth measures which should boost growth rates as the comps get easier.

Companies: Boohoo.Com

13 Jun 18

Profit dynamics bolstered by gross margin strength

Sales grew 53% in Q1 despite slower Boohoo growth, and gross margin smashed consensus expectations. This increases flexibility to reinvest and drive future growth and upgrades. Boohoo’s growth should pick up via overseas expansion, improved customer frequency and easier comps. We have raised FY19 EPS by 4% but growth assumptions in H2 and outer years still look prudent. To reflect confidence in the growth and future profit dynamics we lift our target price to 250p (225p). If PLT’s DC move is executed well, and Boohoo growth rebuilds back to c20%, we would expect the share price to test new highs. Interims in September will better inform us on these dynamics. Sustainable growth, attractive EBITDA margins and strong cashflow, helped by a sector-leading working capital surplus, means we stay at BUY.

Companies: Boohoo.Com

13 Jun 18

Now’s the time

Amerisur is an E&P operating onshore Columbia. The company has high margin production from its Platanillo field and Mariposa-1 well supported by ownership of the OBA pipeline, which connects Platanillo into the Ecuadorian pipeline system. A new up-to-14 well drilling programme is about to begin, providing newsflow and a route to 20mbbl/d. Buy, 30p target (from 25p).

Companies: Amerisur Resources

11 Jun 18

Enhanced EPS returns at current strip

The development of Hurricane’s Lancaster early production system (EPS) remains on track for H119 first oil. We estimate a 1 January 2018 point-forward IRR of 63% for the EPS phase based on current commodity price forecasts. We use the EIA’s short-term oil forecast with Brent at $66/bbl for 2019 and long-term $70/bbl (from 2022). We believe the market is fully valuing a 10-year Lancaster EPS phase (34.7p/share net of debt), a project that has the potential to significantly de-risk our RENAV of 81.0p/share (increased from 78.4p/share). Our RENAV includes a risked value for Lancaster full field development and two mid-sized field developments (250mmbo) at Lincoln and Halifax.

Companies: Hurricane Energy

14 Jun 18

Results in line/ 20% FCF yield forecast

R1 has reported FY results for the year to March to 2018, and they are in line with the April 19th trading statement, although cash at $27m was $1m better, as the working capital build in H1 more than unwound. FCF yield of 17% for 2019E and 20% for 2020E. Retain Buy Pt 770p

Companies: Rhythmone

13 Jun 18

Business looking strong for FY’19… despite IFRS 15

Eckoh’s full year results to March’19 are in-line, as flagged at the May trading update. US Secure Payments continues to lead the way, driving 32% underlying growth in the US division. The UK is returning to form after a weak H1’18, with strong momentum going into the current year. We are making small underlying upgrades to our FY’19 forecasts, however the picture is complicated by the non-cash impact of adopting IFRS 15. Adoption of the new standards is expected to result in a delay in revenue recognition, meaning a material reduction in P&L profitability in the near term. We continue to be excited about the group’s growth prospects, which combined with the high level of recurring revenue makes the shares fundamentally attractive.

Companies: Eckoh

04 Jun 18

The Monthly

Hardman & Co recently welcomed Milan Radia to our roster of established, industry expert analysts. Milan has 25 years of equity market experience at major investment banks and in asset management, and has worked on many high-profile successful IPOs. In 2017, he was ranked the No.1 earnings estimator in the UK for his sector in the Thomson Starmine Awards. Milan has also been techMARK Analyst of the Year and achieved top three Institutional Investor sector rankings for his coverage of the software and telecoms sectors. In our lead article this month he gives an insight into his thinking on some key themes in the sector.

Companies: OPM ABZA AVO AGY APH ARBB AVCT BNO BUR CMH CLIG COS DNL EVG GTLY GDR INL KOOV MCL MUR NSF OXB NIPT PHP RE/ REDX SCLP SCE SIXH TRX TON VAL

11 Jun 18

Significant order win

The company has announced an important order worth £4.3m for the supply of power units for autonomous robots. This is significant as it is with a new customer in a potentially high growth area, plus the size is significant, compared with annual revenues of £47m. No change to existing forecasts, but the contract provides a much greater degree of confidence in expectations for FY 2019 and should provide some upside to the shares, which had previously come under pressure after the last trading update.

Companies: Solid State

12 Jun 18

Initiation of coverage: Rising tide

We believe Crimson Tide’s high-visibility model and long-term growth prospects in healthcare and IoT are not fully appreciated by the market. The group has established a track record of sustaining both double-digit growth and a peer-leading EBITDA margin from sales of its proven and uniquely positioned enterprise mobility management platform, mpro5. Post 18 months of investment, we believe the business is now poised for accelerated growth into verticals beyond field worker management and new geographies. Our analysis indicates the opportunity is significant, with potential to tap into a US$47bn addressable market. We initiate coverage with a Buy rating and a PT of 4.4p, anticipating a re-rating as evidence of accelerating commercial traction emerges.

Companies: Crimson Tide

11 Jun 18

Keywords goes to Hollywood

Keywords’ acquisition of Blindlight for up to $10m gives the group the ability to apply Hollywood movie production resources to the games industry. Factoring in Blindlight and the May acquisition of Fire without Smoke, EPS is enhanced by 2% and 4% for FY18 and FY19 respectively. With the €75m revolving credit now secured, with scope to extend to €105m, the company has plenty of headroom to continue its consolidation strategy while enhancing earnings.

Companies: Keywords Studios

12 Jun 18

New projects to drive shareholder value

AorTech has raised a gross total of £2.6m to fund two new projects. As a licensing and royalty business of its patented Elast-Eon technology, AorTech has been marginally EBITDA positive. We believe there is substantial potential share price upside as, in our view, each of the new projects could create £50m of shareholder value. Textiles (patches and grafts) should have initial sales within two years while heart valves will potentially progress to a licensing stage in a similar timeframe. We initiate coverage with a 400p TP and Buy rating.

Companies: Aortech International

12 Jun 18

Prelims – setting the quality standard

iomart has delivered prelims in line with the trading update and unchanged expectations for the year to March 2018. The predictability of the high level of recurring revenue (and nature of the difficulty in growing, or even losing, such revenues quickly) means consensus is tight and delivery is at consensus: revenue of £97.7m was within 1% of consensus as it stood before the trading update; EBITDA delivery of £39.8m is also within 1%. iomart has, typically, added to underlying organic growth (7% in FY18; FY17: c.7%) with three acquisitions in the year, albeit none in the second half. The balance sheet remains strong and the group has an increased £80m debt facility, offering continuing strategic choices including further acquisitions. The board has made the decision to accelerate dividend growth to 20% (vs 15%E) to hit the 40% payout ratio early, with the promise to reconsider the parameters of the policy. iomart continues to show private equity and public peers how to do it: target lifted to 450p, equivalent to 10.5x FY20 EV/EBITDA and still delivering a 5.2% free cash flow yield, ahead of the market.

Companies: Iomart Group

13 Jun 18

Painting a bright future

Warpaint is a UK-based, colour cosmetics specialist that sells creative, designfocused and high-quality cosmetics at affordable prices. Warpaint’sflagship brand, W7, has established a loyal customer base, and brand awareness is growing rapidly. The company believes that, with Retra Holdings (Retra) now being well integrated into the group, it is well placed for the next phase of development – namely new product development and increasing market share, both domestically and internationally, particularly in its two key markets, the USA and China. Warpaint has never made a loss and has a very healthy profit margin; it is also net debt-free.

Companies: Warpaint London

14 Jun 18

LIBERUM: Majestic Wine* - More than delivering on promises

FY18 results confirm the progress made and have surprised significantly ahead on FCF, EPS and dividends. The group is increasingly well balanced with growing exposure to both online and international markets and we see the acceleration in customer growth spend as sensible capital allocation given: (1) an IRR of 89%, and (2) low leverage with Net debt 0.35x EBITDA.

Companies: Majestic Wine

18 Jun 18

LIBERUM: Aurora Investment Trust* - Excellent long-term returns

Aurora is a value investment trust that focuses on investing in high quality businesses. The manager’s flagship fund, Phoenix UK Fund, has outperformed the FTSE All Share by 378% since 1998.

Companies: Aurora Investment Trust

18 Jun 18

Casino at the cross-roads

We present the investment case on Casino with a re-assertion on our ‘Buy’ recommendation. In our opinion, the stock price is quite attractive at current levels as the concerns about the French business are exaggerated (the entity is better placed today to blunt any competitive onslaught), although the high leverage of parent Rallye remains a pain-point for the subsidiary.

Companies: Casino Guichard Perrachon

18 Jun 18

LIBERUM: Volex* - Positioned for growth

FY18 saw a return to growth, albeit modest at +1%. Adj. EBIT increased 26% as cost savings were delivered. The £36m placing has allowed for further consolidation of the cable assemblies market as well as strengthening the balance sheet in anticipation of the next deal.

Companies: Volex

18 Jun 18

Raising forecasts on new contract wins

The company has announced several new exploration and delineation contracts. The contracts are in existing areas of operation and leverage existing capabilities, raising rig utilisation rates. Management comments that there has been an increase in demand for exploration rigs over recent months. Management has raised its guidance and accordingly we increase our revenue by 4.7%, significant drop through results in an increase in our adjusted EPS of 13.7% to 3.6ȼ. The shares have started to see the start of a recovery, having been deeply oversold due to Tanzanian risks. We still see significant upside from current levels towards our 85p target, driven by positive trading.

Companies: Capital Drilling

18 Jun 18

Morning Note

Capital Drilling (CAPD): Corp Raising forecasts on new contract wins | Iofina (IOF): Corp Market update | M.P. Evans (MPE): Corp Strong crop growth in 2018 | President Energy (PPC): Corp Puesto Flores update

Companies: CAPD IOF MPE PPC

18 Jun 18

Morning Song

PROACTIS Holdings (PHD LN) New brand identity | Vernalis (VER LN) Tris Pharma liability clarified, sale talks underway (Hold to Not Rated) |

Companies: Proactis Vernalis

18 Jun 18

GMP FirstEnergy ― UK Energy morning research package

President Energy (PPC LN) (not covered): Operation update in Argentina | SDX Energy (SDX CN/LN): BUY, £0.80; SD-4X well, Egypt, & LMS-1 Well, Morocco

Companies: President Energy Sdx Energy

18 Jun 18

TMT UPDATE - 18.06.18 (BOOM.L, MBT.L, ECSC.L, ECK.L)

Audioboom plc* (BOOM.L, 2p/£20.2m) Restoration of trading and partner updates | Mobile Tornado plc* (MBT.L, 4.85p/£16.8m) AGM: Capitalisation of debt and extension of redemption date | ECSC plc (ECSC.L, 122.5p/£11.1m) AGM update: Growth across Managed Services and Consulting | Eckoh plc (ECK.L, 38.7p/£97.7m) Finals: Continued US growth opportunity

Companies: BOOM MBT ECSC ECK

18 Jun 18

Northland Capital Partners Limited Morning Report

N4 PHARMA (N4P.L) | VENTURE LIFE GROUP (VLG.L)

Companies: N4 Pharma Venture Life Group

18 Jun 18

FLASH: SD-4X well, Egypt, & LMS-1 well, Morocco

The SD-4X well at South Disouq encountered 89 ft of net gas pay in the Abu Madi horizon, with average porosity of 24%.

Companies: Sdx Energy

18 Jun 18

Small Cap Breakfast

RA International is a leading provider of services to remote locations in Africa and the Middle East looking to join AIM raising £18.8m and 56p, market cap of £97.2m. Expected 29 June Cake Box Holdings—franchise retailer of cakes with a growing store base across the UK looking to join AIM, Offer tbc, expected late June Mind Gym. Behavioural science business that uses scalable proprietary products to deliver human capital and business improvement solutions to large corporations. Offer TBA. Due 28 June Anexo -specialist integrated credit hire and legal services group. Offer raising £25m at 100p, market cap £110m. Due 20 June. i-nexus—develops and provides strategy execution software to assist global enterprises in effective execution of their strategic plans and initiatives looking to jon AIM. Offer TBC, expected 19 June Yellow Cake will use its expertise to generate value through the ownership of physical U3O8 (Uranium) together with a range of activities and opportunities connected with owning physical U3O8. Acquiring supply contract for up to $170m. Offer TBA. Tekmar— technology provider of protection systems for subsea cable, umbilical and flexible pipes and offshore engineering services—Offshore wind farms and Oil & Gas. Revenue of £21.9m and Adjusted EBITDA of £4.9m. £61.8m raised at 130p. Mkt cap c.£65m. Due 20 June. Knights Group— UK regional legal and professional services businesses. FYApr18 rev £34.9m and adjusted operating profit was £6.8m excluding Turner Parkinson (acquiring on IPO). Offer TBA, expected 29 June. TransGlobe Energy Corporation—an independent international upstream oil and gas company with headquarters in Calgary, Canada is looking to join AIM. No Capital to be raised, market cap of £131m. Expected 29 June Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June.

Companies: ERIS PTSG KOOV OPTI WSBN VRS MPL ING HVO JAN

18 Jun 18

SP Angel – Morning View

Arc Minerals* (ARCM LN) – Arc raises stake in Zamsort to 61% | Erris Resources (ERIS LN) – Swedish exploration update | KEFI Minerals* (KEFI LN) – 2017 results | Scotgold Resources* (SGZ LN) BUY, Target 61p – Scotgold appoints Peter Hetherington and Bill Styslinger III as new non-exec directors

Companies: ERIS KEFI SGZ