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21 Oct 20

SP Angel Healthcare Conditions- Novacyt (NCYT.L): Initiation of Research

Novacyt Initiation of Coverage: Through the rapid commercialisation of a COVID-19 test, Novacyt has transformed its financial position. Demand for the Group's COVID-19 test and other COVID-19 reagents are expected to make up the majority of revenue generated until FY22E, whereupon the Group is looking to drive long-term growth across its business via the development of high-margin clinical diagnostics and establish itself as a leader in infectious disease testing.

Companies: Novacyt SAS

21 Oct 20

Tremor - Strengthening momentum drives FY20 upgrades

Tremor has announced in today’s trading update that its platform has continued to gather further momentum since H1 20 results on 22 September, and it now expects FY20 revenue and EBITDA to be in the range of $340-360m for revenue and $30-36m for EBITDA. This leads us to upgrade our FY20 revenue forecasts by +6% to $350m from $330m, and upgrade our FY20 EBITDA by +32% to $33m from $25m at an incremental margin of 40%. This reflects that Tremor’s platform benefits from strong operational gearing that translates to EFCF, and we increase our FY20 net cash to $79m from $71m. This strengthening momentum for Tremor’s differentiated platform reflects that it is capitalising upon a rebound and shift in advertising spend through the success of the initiatives it launched in 2019 and the successful integration of Unruly, and we explain these factors in more depth from p9 of our 22 September report. Today’s announcement also marks the second upgrade to our Tremor forecasts since COVID-19 impacted the advertising market and Tremor in Q2, and this reflects that Tremor has adopted a prudent approach to its guidance. Applying a similar approach to our estimates, we conservatively do not change our FY21 forecasts, and this means that we continue to forecast FY21 organic revenue growth to $420m or +20% YoY, with organic EBITDA growth to $55m or +67% YoY. This conservative, strong FY21 organic growth means that Tremor looks substantially undervalued on 7x FY20 EV/EBITDA or 5x NTM, and a NTM EFCF yield of 6%; vs peers on 13-19x EV/EBITDA with NTM EBITDA growth of 18-47%, and EFCF yields of 1-2%.

Companies: Tremor International Ltd.

22 Oct 20

SDI Group - Positive trading update drives FY 2021 upgrade

A positive trading update from SDI Group justifies upgrading FY 2021 sales and adjusted EPS forecasts by 10% and 15%, respectively, broadly to the levels we were forecasting before the COVID-19 pandemic struck in early 2020. Contract wins for MPB Industries (flowmeters for ventilators) and Atik Cameras (supplying cameras for PCR DNA amplifiers) are expected to be fulfilled within FY 2021 and consequently we leave FY 2022 forecasts unchanged. We are encouraged by the news that the other businesses within the group are seeing order patterns returning towards normality. We upgrade our target price to 110p, at which level the stock trades on multiples that compare favourably to both the market and peer comparators. Our forecasts exclude the potential for further acquisitions as the company continues to execute on its buy and build strategy.

Companies: SDI Group plc

21 Oct 20

WHI Morning Comment: Spectra Systems (SPSY) - Significant Contract Announcement – Central Bank secured

Spectra Systems Corporation, a leader in machine-readable high speed banknote authentication, brand protection technologies, and gaming security software, has announced that it has executed a comprehensive services contract with a ‘long standing' central bank customer for the development, manufacture and servicing of a sensor system. The initial development phases underpin our FY2021E estimates (with risk likely to the upside), but moreover, the balance of development work, comprising supply of sensors (estimated value up to $34m in 2024-25), servicing revenues ($7.5m) and resultant high margin material sales through to at least 2035, provides significant underpinning of future prospects. Our updated Sum-of-the-Parts valuation (reflecting higher than anticipated development revenues and margins) indicates a risked fair value of 240p (from 200p).

Companies: Spectra Systems Corporation

21 Oct 20

Cenkos: Seeing Machines Ltd -- MOU with L3Harris Technologies

Seeing Machines has announced that it has signed a non-binding Memorandum of Understanding with global aerospace and defence technology company L3Harris Technologies. The MOU frames the intent to enter into a global non-exclusive license agreement to enhance pilot training technology with Seeing Machines's dedicated precision eye-tracking system for flight crew training in the full flight simulator (FFS) environment. A license arrangement is currently in advanced discussions between the parties and subject to the negotiation and execution of definitive, binding licensing and other legal agreements. Further announcements regarding the progress of the negotiations in relation to such binding documentation will be made when appropriate.

Companies: Seeing Machines Limited

21 Oct 20

Strong Q1, +6% FY21 revenue upgrade

Positive update today, reporting that trading in FYJun21 has begun well. As a result – and also thanks to DOTD’s strong revenue visibility – revenue guidance is already being upgraded. Consequently, we lift FY21E sales by 6% to £53.0m, so now expecting +12% y/y growth. To put this into context, growth fell to +9% in 2H20. We find this rapid recovery to more typical growth levels highly encouraging. Guidance for profit and cash is reiterated, meaning we leave both profit and cash forecasts unchanged. Somewhat obviously, this requires us increasing our cost assumptions….and if these don’t fully materialise, provides upside risk. Cash continues to build, now £27.7m as at Q1 – we might expect this to be strategically deployed, to enhance what is impressively consistent organic growth.

Companies: dotDigital Group plc

22 Oct 20

Impressive H1 sales and gross margin growth..

G4M’s H1 trading update confirms the continued strength of the top line sales growth already disclosed in its Q1 sales update. H1 sales have risen by an impressive 42% to £70.2m, complemented by gross margin expansion of 330bps to 28.5%, reflecting G4M’s focus on profitable sales growth. This translates to gross profit growth of £7.5m (+60%) compared with last year and will deliver interim financial results materially higher than last year. While sales momentum has continued into October, management remains mindful of the ongoing uncertainties around Covid-19 and Brexit heading into the peak trading period. With market estimates already raised on the Q1 update, this prudent caution tempers our full year PBT upgrade to 13%.

Companies: Gear4music (Holdings) PLC

27 Oct 20

Revolution Bars Group - Proposed CVA

The group has announced a proposed Company Voluntary Arrangement (“CVA”) in order to reduce the size of its Revolution Bar estate and rental cost base and improve profitability over the longer term. There is no impact on the Revolucion de Cuba brand. The initiative is one of several that management have introduced to counter the impact on trading of COVID-19 and will have the dual benefit of trimming the estate of underperforming sites and delivering a cash flow benefit of c.£2m p.a. The group’s balance sheet remains strong.

Companies: Revolution Bars Group Plc

20 Oct 20

Open Orphan - £10m COVID-19 challenge contract with UK Govt

ORPH has signed a contract with the UK Government for the development of a COVID-19 human challenge model. This will involve manufacture of the challenge virus and a first-in-human characterisation study. The contract begins immediately and is likely to be worth c.£10m. The government has also reserved the first three slots to test vaccines using the challenge study at a total cost of £7.5m. We revise our forecasts and increase our SOTP target price to 28p (range 25-31p), reflecting ORPH’s world-leading position in traditional challenge models, and now COVID-19 challenge models, with additional upside from the potential development of new challenge models, the monetisation of valuable challenge model data and the potential sale of its non-core pharmaceutical assets.

Companies: Open Orphan Plc

19 Oct 20

Bioventix - FY 2020 results

Bioventix reported a strong set of full-year results, that were 8% above expectations, assisted in part by a c.£0.2m (+3%) FX benefit, which helped offset the obvious drag on performance in Q4 due to the impact of COVID-19 on routine testing in hospitals. A 53p special dividend was proposed, resulting in a full-year dividend of 141p, up 18%. Due to the COVID-19-related disruption to testing, which only exacerbates the poor visibility to customer royalty streams, we are withdrawing forecasts until normality returns. That said, the business remains in very good shape, with evidence that: (i) high sensitivity troponin is gaining momentum; (ii) physical antibody sales growth remains robust (+34%); and (iii) progress in its development pipeline (particularly pollution monitoring programme) is being made. The business is expected to remain cash generative, and with c.£8.1m of cash at 30 June, the company is a strong position to weather this period of disruption before returning to growth.

Companies: Bioventix Plc

20 Oct 20

Open Orphan* - Material UK Government COVID Study Contract

Open Orphan has announced a contract with the UK Government to develop and perform the UK's first COVID-19 (COVID) human challenge studies. The multi-faceted agreement provides strong endorsement and validation of hVIVO's capabilities, with material revenues driving forecast upgrades and further upside risk to earnings as pipeline conversion continues and industry awareness and penetration of challenge studies accelerates.

Companies: OPORF ORPH CRO VENN

20 Oct 20

Cenkos: TP Group Plc -- Interim Results

TP Group (TPG) delivered robust organic growth of 13% during H1/20A. However, the impact of COVID-19, together with increased investment and a shift in business mix, meant that Adj EBITDA reduced by £0.9m YoY to £1.4m. TPG has today announced it is in advanced discussions to dispose of its non-core oil and gas focused engineering business. Despite the strong and expanding order book, COVID-19 continues to create uncertainty around the timing of contract deliveries. As such, our forecasts remain withdrawn and our rating Under Review.

Companies: TP Group Plc

22 Oct 20

GB Group - Resilient H1 trading drives upgrades

GB Group (GBG) expects to report underlying revenue growth of 10% y-o-y for H121, with a one-off contract in the US making a material contribution to revenues. Combined with strict cost control this resulted in adjusted operating profit growth of 26% y-o-y and a £32m h-o-h reduction in net debt. With management guidance for revenue well ahead of our and consensus forecasts for FY21, we have upgraded our revenue and EPS forecasts for FY21–23. Despite COVID-19 related pressure on new business in the short-term, we view GBG as well placed to benefit from the accelerated shift in the digitalisation of business processes.

Companies: GB Group PLC

21 Oct 20

Hurricane Energy - Forecast and valuation update

Forecast and valuation update

Companies: HUR HUT HRCXF

20 Oct 20

Solid State - Encouraging H1 trading update

The group’s H1 trading update is reassuring, with a strong first half, pointing to a continuation of previously indicated trading patterns. Revenue and profit has been resilient, while cash flow has been strong, returning to normalised patterns having repaid PAYE and VAT and also its final dividend in September. H1 trading benefited from a strong order book heading into the lockdown and due to some delays in order intake over recent months has an order book around 7% less than last year. Management is cautiously optimistic, but still considers that the trading outlook remains uncertain, so guidance remains withdrawn. As such, we look to the December interims to resume forecasts, when order visibility will be clearer.

Companies: Solid State plc

27 Oct 20

Q3 20 sales post view

Q3 20 sales in line with our estimates Assystem published Q320 revenues that were broadly in line with our expectations at EUR115m down 1% LFL compared to our EUR116m estimate. Back to growth in the core business Nuclear activities returned to growth (+1.6% LFL) driven by France and the UK while onsite operations in Saudi Arabia (KA Care contract) were held back by local measures to contain the pandemic (-2.8% headwind on divisional LFL growth). Non-nuclear activities also saw a quarter to quarter improvement with a -3% LFL decline vs. -20% in Q2, driven by project management in Building Infrastructure. The division was said to have returned to growth in September. Staffing (-13.2% LFL) remained under pressure, adversely impacted by travel restrictions. FY 20 guidance fine-tuned - we leave our estimates unchanged Assystem fine-tuned its FY 20 guidance. The group now expects 1) revenues of EUR470-475m vs. EUR485m previously and 2) EBIT margin of 5.2%-5.3% vs. 5.0% previously. The net effect of this new guidance on our estimates is neutral (negative at the revenue level / positive at the EBIT level). The group also indicates that its order book and pipeline of tenders open up good prospects for 2021.

Companies: Assystem SA

27 Oct 20

Impairments close to zero and solid growth

SpareBank 1 Østfold Akershus (SOAG) published its Q3 report today and overall we found recurring revenue on the strong side, operating expenses in line and cost of risk close to zero. Lending growth was a solid 2.2% within retail and 1.5% within corporate. We have increased 2020e/2021e/2022e EPS 10%/5%/5%. A run-rate RoE around 9% should be obtainable even in a zero interest rate environment, we reiterate Buy and our NOK 270 target.

Companies: SpareBank 1 Ostfold Akershus (SOAG:OSL)SpareBank 1 Ostfold Akershus (0M9E:LON)

27 Oct 20

Fireside Chat Feedback and Q3 20 preview

Our fireside chat with Javier Lopez Belmonte, CFO of ROVI: Doria on track in Europe The CFO reiterated that the company expects EMA approval for Doria by the end of this year or beginning of 2021 in Europe. Rovi is already recruiting sales force in Germany and will do so in the UK in the short term. Filing with the FDA and the way they plan to commercialise Doria in the US will depend on the launch in Europe. Moderna vaccine: ''It could be very material'' Despite the company maintaining its cautious approach, clinical trials are close to being over. ROVI commented that it will be a 2-dose vaccine with a relatively short ''protection'' period, and it could become a required item on vaccination calendars. Long-term target reiterated The company not only reiterated its FY20 target of growing in the mid to high double digit in sales (+8% in H1) but also, and more relevantly, its mid-term target of doubling 2019 sales by 2023 and multiplying EBITDA ex-RandD by 2.5 on the same time horizon. The company expects to achieve this mainly with a good performance of heparins (strong growth of Becat plus raw material price decrease) and a small contribution of Doria. Preview: Results on November 5th before market open We expect both Enoxaparin (+20% vs Q2) and Hibor to show positive sequential figures, despite continued lower hospital activity. Additionally, this quarter we expect a strong toll manufacturing contribution thanks to the positive flu vaccine campaign. We expect sales to be 9% above Q3 19. The high price of heparin should be offset by the higher margin of toll manufacturing sales. However, we expect gross margin to decline c.330 bp, which is in line with our FY20e. Despite that, and with lower RandD expenditure, we expect EBITDA to reach EUR19.4m.

Companies: Laboratorios Farmaceuticos Rovi, S.A.

27 Oct 20

Business improvement in Q3 20, 2020 guidance confirmed

In Q3 20, the decrease in organic revenue slowed significantly (-3.6% vs -7.7% in Q2 20). This was attributable to all sectors, geographies and business lines. Digital and cloud services continued to grow by more than 10%. The integration of Altran is on track and the combined group launched three joint offerings in the market. For 2020, guidance was confirmed. Management is targeting a turnaround in organic revenue growth in Q2 21.

Companies: Capgemini SE

27 Oct 20

Q3 20: strong consensus beat and positive outlook for Q4

NXP’s Q3 results beat the consensus, driven by Automotive and Mobile end-market recoveries as well as new product launches. The impact on profitability has been stronger than expected boding well for Q4 as NXP foresees continuing improvement across its core end-markets, leading to a Q4 upbeat on consensus.

Companies: NXP Semiconductors NV

27 Oct 20

Mediocre Q3 is only the beginning of the tough slog ahead

SAP’s Q3 results were average at best and missed our expectations. Consequently, the group not only lowered its FY20 guidance but also pushed its mid-term target out by two years from FY23 to FY25. These developments come as a result of two crucial mistakes: 1/being late to drive the push from licenses to cloud and 2/under-estimating how fast the transformation would occur, mostly aided by COVID. The result, a long road ahead to growth.

Companies: SAP SAP SAP SAP SAP SAP SAPGF

27 Oct 20

Condor Gold set for 'fast track approach to construction in next 6-12 months' at La India project

27 Oct 20

Bloomsbury Publishing' reports a page turning first half performance - with a revenue rise of 10%

27 Oct 20

3U Holding - weclapp to the fore

In 3U HOLDING’s diverse portfolio, it is the prospects for its cloud-based ERP software platform, weclapp, that investors should focus on. weclapp sales grew 52% y-o-y in H1 and contributed to a near doubling of information and telecommunication technology profits. weclapp is on track to sustain this growth in FY20/FY21 and for an IPO that could crystalise substantial value for shareholders. Favourable trends in 3U HOLDING’s other businesses (renewables, telecoms and sanitary, heating and air conditioning) resulted in a resilient performance in H1 despite COVID-19.

Companies: 3U HOLDING AG

27 Oct 20

Nothing stops SWMA

A new quarter, a new beat, a new record. Q3 sales and operating profit were driven higher by COVID-19-related effects on consumer demand and channel shifts. No easing expected for the rest of the year.

Companies: Swedish Match AB

27 Oct 20

Almost back to normal

The third-quarter results and management’s guidance, supported by the accrual of a dividend, confirm that the situation is almost back to normal for this well-managed and diversified group. Within this context, it is easier to understand management’s recent comments about its lack of interest in domestic consolidation.

Companies: Banco Santander S.A.

27 Oct 20

Just a short-term respite?

A very strong Q3 (+12.9% sales growth) driven by the on-premises re-opening during the peak summer aperitif season. However, a cautious view for Q4 with the re-emergence of restrictions, and continuing destocking in the US.

Companies: Davide Campari-Milano (CPR:BIT)Davide Campari-Milano N.V. (CPR:MIL)

27 Oct 20

The Closing of the pricing delta

Covestro had already reported preliminary figures earlier this month and raised guidance to the upper end based on the assumption that an expected second wave will not trigger spring-like lockdowns. This report provided some more details and confirmed the narrowing of the pricing delta.

Companies: 1COVN 1COV CVVTF 1COV 1COV 1COV

27 Oct 20

Too soon to claim victory

HSBC’s third-quarter results unsurprisingly comfortably beat expectations on the back of an end to provision front-loading. On the other hand, as a cash-rich bank, the top-line was strongly impacted by lower rates. The group intends to accelerate its restructuring/repositioning which should be facilitated by Asian growth opportunities but reckons that it will be hard to recover lost revenue. The conservative stance on capital distribution confirms that it is too soon to claim victory.

Companies: HSBC Holdings Plc

27 Oct 20

Buoyant Consumer segment

Q3 20 was above expectations. Organic sales increased by 4.4% thanks to the strong sales recovery in the Consumer market (+9.9%). Cookware benefited from consumers cooking at home due to the COVID-19 pandemic, temporary consumption incentives in some countries, retailer restocking in some regions and the development of online sales. There is no surprise for 2020 with guidance of a -5%/-6% decline in organic sales and -25%/-30% in the operational result from activity.

Companies: SEB SA