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26 Nov 20

Boohoo Group Plc (BOO LN) - Actions not words

Boohoo has announced meaningful progress in its Agenda for Change Programme, to deliver long lasting change to its supply chain and business practices. Sir Brian Leveson PC has been appointed to provide independent oversight of the programme, with KPMG engaged to provide additional resource, expertise and independence, working alongside the Group’s internal responsible sourcing and compliance team, as well as with external supply chain audit specialists Bureau Veritas and Verisio. We believe the calibre of the appointments reflects the Group’s unwavering commitment to implementing in full, and with complete transparency, all recommendations of the Independent Review.

Companies: boohoo group Plc

30 Nov 20

Tremor - Accelerating momentum drives FY20 & FY21 upgrades

Tremor has announced in today’s update that its platform’s momentum has continued to accelerate since its last update on 22 October. Tremor now expects FY20 revenue and EBITDA to be in the range of $390-400m for revenue (from $340-360m), and $50-52m for EBITDA (from $30-36m). This leads us to upgrade our FY20 and FY21 revenue forecasts by +13% and +12% to $394m and $470m, and upgrade our FY20 and FY21 EBITDA by +54% and +12% to $51m and $62m. The upgrades reflect that Tremor’s differentiated platform is capitalising upon the rebound and structural shift in advertising spend towards digital video and connected TV, through the success of the initiatives it launched in 2019 and the successful integration of Unruly. It is also the third upgrade to our Tremor forecasts since COVID-19 impacted the advertising market and Tremor in Q2, and Tremor subsequently adopted a prudent approach to its FY20 guidance. We have mirrored this conservatism in our FY21 EBITDA of $62m, which compares with H2 20 EBITDA of $49m, and includes additional investment in R&D and new product releases with greater marketing spend, as Tremor looks to gain share within a market growing at c20% pa. We also highlight from p10 that Tremor is demonstrating the same trends and performance as its US peers Magnite and The Trade Desk, with each forecasted to see +15-35% organic revenue growth and +15-60% organic EBITDA growth in FY21, as they focus on expanding in connected TV. However, Tremor’s share price has only increased +22% since 1 October, while after Q3 results in November, Magnite and the Trade Desk have increased by +169% and +57%. Tremor is also trading at a vast discount to its US peers on all metrics, such as FY21 EV/EBITDA of 6x vs 32x and 129x, and at a discount to the finnCap Tech 40 on 14x with +9% EBITDA growth. As Tremor continues to deliver and exceed expectations, we do not expect that its current valuation will be sustainable due to market or external interest, and we upgrade our target price to 700p based on 20x FY21 EBITDA.

Companies: Tremor International Ltd.

25 Nov 20

D4T4 Solutions - Switch to recurring revenue builds a platform for growth

The H1 results are as announced in the October update; COVID delayed several new contracts until earlier this month, leaving H1 revenue at £5.1m. However, management remained comfortable with a FY sales forecast of £21.7m on the basis of a strong pipeline and the substantial tranche of annually renewed revenue billed each H2. Reassuringly, the new contracts have now been signed for both the Celebrus Customer Data Management (CDM) solution and the Celebrus Customer Data Platform (CDP), and they cover a range of verticals from financial services to automotive manufacture and ecommerce provision. With significant net cash, D4t4 is in a strong position for long-term sustainable growth on the back of rapidly growing global demand for CDP/CDM. It remains confident on prospects in new geographies (N America and APAC) and new use markets (fraud, risk analysis and healthcare) plus a high level of recurring revenue. Our forecasts and target price remain unchanged save for a tweak to cashflow and raised dividend expectation. We reiterate our 310p target price.

Companies: D4t4 Solutions plc

26 Nov 20

Litigation Capital Management:Initiation of Coverage

Litigation Capital Management (LCM) is an alternative asset manager specialising in disputes financing, with its main operations in Australia and the UK. The company provides funding for litigation in exchange for a share of any settlement and has built a strong track record of supporting winning c

Companies: Litigation Capital Management Ltd

27 Nov 20

Digital driven outperformance

Reach’s trading update highlights revenue growth tracking comfortably ahead of market expectations going into December. Digital sales, underpinned by strengthening customer engagement, has accelerated substantially to +16.2% y/y in the 5-months to 22 November (H1’20: -1.0%), and is strongly ahead of N1S H2 forecasts (+2.7% y/y). Print sales were in-line, with increased cross-promotion across Reach’s portfolio leading to stabilisation in HY y/y trends (H2 to date: -19.7%; H1: -20.1%). Management also report a ‘significant’ reduction in costs in-line with the Group’s transformation strategy, which combined with a higher Digital weighting, has pushed up AOP margins ‘materially’ on a sequential basis. As a function of this strong update, we upgrade FY’20E sales, AOP and adj FCF forecasts by 1%, 7% and 8% respectively. FY’21E FCF yield of 22% (pre-pension contributions) is materially ahead of global peers (4%-7%); a yield of 10% generates an intrinsic value of 310p/share.

Companies: Reach plc

25 Nov 20

IQE - Outperformance in both wireless and photonics

IQE has announced that the strong performance in H120, which resulted in record first-half revenue, has continued into the second half. It has updated FY20 revenue guidance from at least £165m to over £170m, with adjusted EBIT guidance remaining at the mid-single-digit million level. We have updated our FY20 and FY21 forecasts accordingly, giving adjusted PBT upgrades of 34% and 10% for FY20 and FY21 respectively.

Companies: IQE plc

01 Dec 20

Upgrading on strong H1 outturn, maiden dividend

H1 has seen a clearer outlook for portfolio valuations which has allowed Mercia to recoup some of the reduction at the Finals. Cash earnings are better than expected as costs have remained lower for longer. A well-funded portfolio and £25m cash has prompted declaration of a maiden 0.1p interim dividend – a strong signal of confidence. Lower costs and increased asset values have prompted 30-45% upgrades to adj. EBITDA across the horizon. The shares are trading at a 32% discount to NAV, of which 17% is cash. This disregards all value for the asset management platform. A 10x EBITDA multiple ascribed to 3rd party asset management earnings plus NAV points to a c.40p/share intrinsic value, before further value creation.

Companies: Mercia Asset Management PLC

27 Nov 20

Highly impressive H1 update

Gateley’s H1 update is highly impressive, confirming a year on year improvement in activity levels in September and October and a strong sense of optimism at the beginning of H2. The Platforms continue to drive new business, whilst operating margins have benefited from cost actions taken in response to the pandemic (H1 PBT will show growth year on year). In light of the confident tenor of the statement, we reintroduce headline forecasts this morning, assuming stable revenue this year - which would be a considerable achievement - with profits returning to pre-pandemic levels by FY23.

Companies: Gateley (Holdings) Plc

23 Sep 20

Confirmation of stellar H1

LoopUp has announced a very strong H1 period, in line with the previous trading update and reflecting a number of months of exceptional performance. This is allowing the business to invest in the major identified new opportunity, to provide telephony within Microsoft Teams, where the early signs are extremely positive. We look forward to further detail on the Teams pipeline and sales levels over time.

Companies: LoopUp Group PLC

30 Nov 20

Omega Diagnostics - FY 2021 interims – three key value drivers

Interim results were in line with the 28 October trading update, reflecting the impact of the pandemic, with sales down 27% and LBITDA of £1.3m. However, c.10% LFL growth for Health & Nutrition (HN) in October and November is encouraging and points to long-term growth. Together with confirmation that first shipments against the initial 1m order for AbC-19 rapid antibody tests have taken place as well as first shipments of VISITECT CD4 Advanced Diseases tests to Africa, we expect a strong H2 (c.75% of FY sales), with potential upside driven by a currently poorly visible, yet anticipated long-term opportunity from its three key value drivers: Food Detective in China, VISITECT CD4 and COVID-19 lateral flow devices (LFDs). We leave our forecasts unchanged until we have further clarity on the unfolding COVID-19 opportunities. Whilst this implies c.£9.4m sales in H2, this is still eminently achievable given that supply has the ability to generate in excess of £9m of sales in Q4 FY 2021, should the demand materialise.

Companies: Omega Diagnostics Group PLC

01 Dec 20

Well positioned for recovery

Tekmar’s H1 results were well flagged in the 30th October update. Revenue was slightly lower YoY at £15.2m (H1’20: £17.1m), with EBITDA of £0.8m (H1’20: £2.0m), reflecting the impact of COVID-19. Whilst there continues to be some short term disruption, the COVID-19 backdrop is improving and we believe Tekmar is well placed to return to growth as its markets recover. The balance sheet is robust, with net cash of £0.7m, and demand is strong, with the enquiry book increasing by 21% YoY to £225m. Industry forecasts point to significant long term structural growth in Tekmar’s end markets and new CEO Ally MacDonald is conducting a strategic review focused on positioning the Group to capitalise on this. N+1 Singer has been appointed joint broker and we will initiate coverage in due course. We believe the historic EV/EBITDA rating of 7.7x is undemanding and see the current share price as an attractive entry point given the scale of the growth opportunity and strong recovery prospects.

Companies: Tekmar Group Plc

25 Nov 20

Cenkos: Calnex Solutions plc -- Interim results and forecast upgrade

Calnex Solutions has announced very strong maiden interim results, with H1/21 revenue up 37% to £7.7m and adjusted PBT up 90% to £2.3m. Calnex has firmly established a trusted reputation worldwide, launching multiple first to market telecoms and network testing solutions. The exponential growth of data creation and secular migration of industries to cloud computing along with the long-term transition of the telecoms industry to 5G is driving demand for high value test instrumentation. Given the strength of H1/21 reported today we have upgraded our revenue forecasts for FY21E and FY22E by 10.6% and 12.2% to £15.4m and £16.4m and increased forecast EPS up 24.1%. and 14.3% respectively. Calnex is accelerating its growth investment plans, ahead of our previous expectations, expanding both R&D and sales capacity to capture increased market share within a substantial and growing global market.

Companies: Calnex Solutions Plc

26 Nov 20

First Property* - H1 Results: Ready to reinvest

H1 Results: Ready to reinvest

Companies: First Property Group plc (FPO:LON)First Property Group plc (GXZ:BER)

01 Dec 20

Cenkos: Equals Group Plc -- Positioning to produce free cash flow

Today's trading update demonstrates Equals producing robust FY20E revenues, as it rebounds steadily from a COVID-19 affected Q2/20. Material progress has been made on rightsizing costs, the benefits of which should be felt in FY21E. While our newly reissued forecasts expect a weaker profit delivery in H2/20E, we expect strong YoY EBITDA growth thereafter, as the group returns to double-digit revenue growth with a rationalised cost base and geared profit growth. Should these forecasts be met, we expect the current c2x EV/Sales multiple to move back towards Jan 20's pre-covid 4x multiple, hence we move back to “Buy”.

Companies: Equals Group Plc

01 Dec 20

The Ince Group plc* - Promising Interim Results – Cash Inflection

Ince has announced excellent interim results with promising trends for the near and medium term which bode well for the Group's earnings and cash progression. First half revenue has grown 6% YoY, a strong result considering the impact of COVID during the period.

Companies: Ince Group plc (INCE:LON)Ince Group plc (W1G1:BER)

01 Dec 20

FastForward Innovations' CEO joins Leap Gaming board to spearhead 2021 London listing

01 Dec 20

FastForward Innovations' boss joins Leap Gaming board to spearhead 2021 London listing

01 Dec 20

Premier African Minerals says 'what we have found compels us to do additional work' in Mozambique

01 Dec 20

EQS Group - More whistle-blowing

EQS is acquiring Danish-based Got Ethics, a (profitable) SaaS provider of whistle-blowing solutions, to add to its own offering in the segment, for €10m. This should enable the group to build market share across Europe more rapidly ahead of the implementation of the EU whistle-blower directive in 2021. The vendors are staying with the enlarged group, with completion expected in Q121. Our FY21 estimates are lifted, with revenue up 5.6% and EBITDA rising from €5.3m to €6.1m. The share price is up 125% year-to-date, yet the valuation remains around 35% of larger peers based on FY19–21e average EV/sales. P/E and EV/EBITDA multiples are currently inflated by the extra marketing spend.

Companies: EQS Group AG

01 Dec 20

New outlooks for COVID-19 claims and net profit

Munich Re forecasts a net profit of €1.2bn for FY2020 COVID-19-related claims expected at around €3.5bn for FY2020 Net profit guidance of €2.8bn released for FY2021 COVID-19-related impact expected at around €650m for FY2021

Companies: MEURV MUV MUV2EUR MUNICHRE MUV2 MUV2 MUV2N MURGF MUV MUV2

01 Dec 20

November construction update

2 WTGs erected in November taking the total count to 55 (of 62) 33 WTGs now commissioned up from 20 in October COD still expected in December, now for the first 10 WTGs Still no news on the Aker transaction

01 Dec 20

Britvic - Adapting to the new normal

As expected, the COVID-19 pandemic caused significant declines in out-of-home consumption, which were partly offset by gains in at-home consumption and market share. Full year revenue declined 6.8% on a constant currency basis, while adjusted EBIT was down 21.9% at constant currency, and adjusted EPS was down 27.8%. A full year dividend of 21.6p was confirmed, following the decision in H1 to prudently suspend the dividend. Management focused on cash and cost efficiency to mitigate the impact of the pandemic as much as possible. During the period, the company extended its carbonates relationship with Pepsi to 2040. The outlook is understandably cautious, given the uncertainty in terms of further restrictions in Britvic’s main markets. Nevertheless, management has carefully planned its approach, and the agility demonstrated so far should continue to help Britvic navigate the uncertain environment.

Companies: Britvic plc

01 Dec 20

Henderson High Income on identifying revenue-generating stocks in the current environment

01 Dec 20

As expected, a new product launched

Demant has launched a new product – Oticon More comes with an industry-first in-built Deep Neural Network (deep/ machine learning) which improves audiology performance. This is a multi-brand launch, allowing Demant to target a wider patient base and ensuring strong sales momentum into 2021. Nonetheless, given the stiff competition within the hearing aids industry, the new product is priced only marginally higher than the previous device as management’s focus is on market share gain.

Companies: Demant A/S (DEMANT:CPH)Demant A/S (DEMANT:CSE)

01 Dec 20

Checkit - Smarter operations management

Checkit has emerged from a period of corporate activity as a pure-play business focused on driving the adoption of its connected SaaS software, in particular its workflow management application. Checkit’s software is designed to enable smarter operations management, exploiting Internet of Things technology to connect people, processes and assets. With a proven ability to sign up blue-chip customers across a number of target verticals, growth in recurring revenues and an expanding customer base should help to close the valuation discount to software peers.

Companies: ECKTF CKT EKC

01 Dec 20

Symphony Environmental Technologies' hail antiviral glove and mask results as 'game changer'

01 Dec 20

Symphony Environmental Technologies hails antiviral glove and mask results as 'game changer'

01 Dec 20

Oil & Gas Daily Flow

Lansdowne Oil & Gas*, Providence Resources (LOGP LN, PVR LN): Barryroe Farm-out confirmed | Caspian Sunrise (CASP LN): Operational challenges at Deep Well 5 affecting gross production | Enwell Energy (ENW LN): Mekhediviska-Golotvshinska licence extension confirmed | Genel Energy (GENL LN): Government payments for oil sales | Gulf Keystone Petroleum (GKP LN): KRG pays US$7.5m for October sales

Companies: LOGP CASP ENW GENL GKP

01 Dec 20

SP Angel . Morning View

Altus Strategies* (ALS LN) – BUY, 132p – New 10m Canyon Resources shares to be issued to Altus | Beowulf Mining* (BEM LN) – New lead-zinc prospect identified at Wolf Mountain | Corcel Plc (CRCL) – Burwell Li-ion battery storage and solar power project positive review | Power Metal Resources* (POW LN) – Drilling progress continues in Botswana | Scotgold Resources* (SGZ LN) – BUY, 182p – First gold at Cononish | SolGold* (SOLG LN) – Adjustments to Alpala PFS schedule | Vast Resources* (VAST LN) – Final approval of the lending facility targeted for 15 Dec/20

Companies: ALS CRCL POW SGZ SOLG VAST BEM