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19 Jun 18

LIBERUM: Footasylum* - A high growth story pushed out one year; doing all the right things

Footasylum is investing for growth in areas where there is a more predictable rate of return. The focus on more store upsizes is sensible as this aligns its strategy with the brands it retails but should also ensure a more predictable payback on capital spend.

Companies: Footasylum

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

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

19 Jun 18

Post results update

We reassess our forecasts below, no significant changes to the P&L and the company produced a strong start to FY18e where revenue in the 1Q18 was +60% YoY to €4.8m, maiden dividend of 0.25p proposed. AGM in July should provide detail on timing of dividend.

Companies: Veltyco Group

19 Jun 18

InnovaDerma

The trading update for the year ending June indicates revenues and pre-tax profit of c.£11m and £0.65m, respectively. This is lower than previously indicated (c.£1m), which is mainly due to supply chain issues and launch-related costs in H2. The decision by Boots to range Roots in 359 of its 2,500 stores in the UK and expansion into almost all Superdrug stores, however, is a strong endorsement of the company’s ability to create well-recognised beauty brands and gives us increased confidence in the growth dynamics for this perennial brand. We reintroduce new forecasts and a target price of 220p

Companies: Innovaderma

19 Jun 18

Unveiling Kape

Kape has made solid progress in refining its product set and is now fully focused on the consumer cyber security segment. By leveraging its marketing platform to scale new products while also transitioning to a subscription model, we expect to see strong revenue growth and margin expansion translating to our forecast 16% three year CAGR in EPS. With $69.5m net cash, acquisitions should enhance this further. We believe the shares should be on a growth rating yet despite the recent performance, the 21.8x FY18 P/E is below peers. We see upside towards 157p.

Companies: Kape Technologies

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

21 Jun 18

LIBERUM: Crest Nicholson Initiation - Long term attractions undervalued

The shares’ de-rating, after some margin erosion in 2018, has been overdone. We expect profit growth to resume as margins stabilise and geographic expansion drives output growth.

Companies: Crest Nicholson

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

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

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

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

19 Jun 18

Volatility returns

When we last published the FTSE 100 was reaching an all-time high of 7877. We have subsequently seen increased volatility and some of the previous progress made by markets surrendered. The escalation of the potential trade war between the US and China and the imposition of more tariffs has unnerved markets. At home, we have continued to see M&A activity. While company results have largely been as anticipated, the outlook in some sectors looks less promising. In Share News & Views, we comment on Aortech*, ECSC*, Location Sciences*, Norcros, NWF, Tricorn* and Warpaint London*.

Companies: AOR APC BMS CRPR DMTR ECSC ESC EUSP FDM GETB LSAI SNX SPRP TCN W7L

14 Jun 18

Positive corporate and premium pricing newsflow

The proposed acquisition of easyGym stacks up strategically and financially. It further reinforces the Groups roll-out and consolidation led growth model and strengthens its position in the value segment. Current trading is strong with positive commentary around the premium pricing initiative. We will publish formal forecasts in due course but our preliminary analysis suggest 9%/8% EPS accretion in FY19/FY20. Premium pricing success should add at least a further 5% to these estimates, implying a look through FY19 P/E of 18.5x vs a 3 year EPS CAGR >30%. We lift our 12m TP to 335p – Buy.

Companies: Gym Group

20 Jun 18

AGM upgrade driven by Bulgin

Elektron Technology’s AGM update has revealed a strong start to the year, with performance ahead of expectations. This has been driven by Bulgin, which is trading strongly across all territories. Management now expects Bulgin to report H1 19 sales of at least £13.5m (up c.8%) and anticipates modest sales growth for the business for FY19, despite a tough H2 comparative. Meanwhile Checkit continues to make good progress in driving adoption of its real-time operations management and monitoring solution, and Elektron Eye Technology is trading in line with expectations. We have increased our forecasts for Bulgin in line with updated guidance, driving an upgrade to adjusted group PBT and EPS of 20% for FY19, followed by 5% for FY20.

Companies: Elektron Technology

22 Jun 18

redT energy - 5 minute masterclass: energy storage in the UK

22 Jun 18

Trifast - Project Atlas helps map the future

Trifast delivered another record financial performance. FY18 results were modestly ahead of market expectations, but significantly ahead of expectations at the start of the year. Management is now launching Project Atlas to integrate its management, customer-facing and manufacturing processes through a £15m investment over the next three years. By maintaining leading customer service and quality levels, the move is a clear support for the invest and grow strategy. Following the recent acquisition of Precision Technology Supplies (PTS) in the UK, the company retains adequate resources to pursue additional M&A should appropriate opportunities arise.

Companies: Trifast

22 Jun 18

Morning Note

Synairgen (SNG): Corp SNG001 shown to be safe in COPD patients

Companies: Synairgen

22 Jun 18

Morning Song

Augean (AUG LN) Adjusted PBT increased to reflect sale of Colt | Carador Income Fund (CIFU LN) Strategic review announced, discount has narrowed to c5%

Companies: Augean Carador Income Fund

22 Jun 18

GMP FirstEnergy ― UK Energy morning research package

Gulf Keystone Petroleum (GKP LN) (not covered): Operational & corporate update | Victoria Oil & gas (VOG LN)1,6; Speculative Buy, £0.85: FY17 results

Companies: Gulf Keystone Petroleum Victoria Oil & Gas

22 Jun 18

AIM Market Update

April and May were another couple of strong months for AIM with total funds raised (new and further issues) of £561m and £564m respectively. To put this in context, since the beginning of January 2016, the monthly average is £502m. Through the end of May 2018 the total amount raised of £2.65bn is +40% on the same period in 2017 albeit 2017 had a big end to the year.

Macros: Indices and MarketsIndices and MarketsIndices and MarketsIndices and MarketsIndices and MarketsIndices and Markets

22 Jun 18

FLASH: FY17 results

FY17 gross production of 10.98 mmcf/d (2016: 10.23 mmcf/d) is in line with the figures previously reported.

Companies: Victoria Oil & Gas

21 Jun 18

Solo Oil - Update on Helium One Investment

21 Jun 18

Accsys Technologies - Clear strategic progress

Successful expansion of its established Accoya facility at Arnhem should pave the way for Accsys to become EBITDA positive at the group level during FY19. A dedicated Tricoya facility (construction underway, first production expected from mid-2019) provides another clear platform for further profit growth. As this becomes more apparent, we believe it will be a catalyst for positive share price performance.

Companies: Accsys Technologies

21 Jun 18

redT energy - Launch of Gen 3 energy storage machine

21 Jun 18

LIBERUM: Crest Nicholson Initiation - Long term attractions undervalued

The shares’ de-rating, after some margin erosion in 2018, has been overdone. We expect profit growth to resume as margins stabilise and geographic expansion drives output growth.

Companies: Crest Nicholson

21 Jun 18

Import duties and recalls take their toll on 2018 earnings

Chinese retaliation on US import duties takes its toll on Daimler’s profits. In addition, Dieselgate has reached Daimler as it has to recall diesel-powered vans.

Companies: Daimler

21 Jun 18

Morning Song

Microsaic Systems (MSYS LN) Distribution agreement with Amedis | Motor Retail Better dynamics in New put dealers’ PBT back into growth mode

Companies: Microsaic Systems

21 Jun 18

GMP FirstEnergy ― UK Energy morning research package

Echo Energy (ECHO LN) (not covered): Hydrocarbon column at EMS-1001 in Argentina | Hess (HES US) (not covered): Discovery in Guyana | ENI (ENI IM) (not covered): Croatia upstream divestment | Royal Dutch Shell (RDSA/B LN) (not covered): Shell to sell Draugen and Gjøa interests to OKEA | Zenith Energy (ZEN LN) (not covered): Equity placing | Oryx Petroleum (OXC CN); Under Review: Successful appraisal in Kurdistan | ShaMaran (SNM CN) (not covered): Payment for Kurdish export | SDX Energy (SDX LN/CN)1,6: BUY, £0.80; South Disouq and Morocco update

Companies: ECHO HES ENI RDSA ZEN OXC SNM SDX

21 Jun 18

Trading ahead of expectations

The provider of technology-based solutions to predict the effects of cancer treatment regimens for the biopharma industry, has confirmed that based on its current unaudited accounts, it is trading ahead of market expectations for its full financial year ended 30th June 2018. The Company’s anticipated total income for the full year is likely to be greater than £495k (we were forecasting £450k) and its anticipated loss will be materially reduced compared to current market expectations. We were previously anticipating a pre-tax loss of £0.34m.

Companies: Physiomics