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30 Jul 20

Belvoir Group - Forecasts upgraded, strategy continues to deliver

Since the restrictions were lifted in mid-May, Belvoir has seen a surge in activity due to pent-up demand, resulting in June being a record breaking month for the group’s Newton Fallowell estate agency network in terms of instructions and sales and the financial Services division in terms of written income. Management have stated that with the positive impact of the stamp duty reductions still to take effect they are confident that the Group is well positioned to capitalise on the current market upturn and to take advantage of the opportunities arising from more challenging conditions. We have upgraded our PBT forecasts for FY 2020 to the level we forecast pre-COVID. We have also upgraded our target price from 169p to 233p and highlight that H1 2020 has demonstrated the resilience of the group, management’s ability to navigate difficult market conditions and the power of the franchise-led strategy.

Companies: Belvoir Group Plc

29 Jul 20

Avacta Group - Termination of coverage

Edison Investment Research is terminating coverage on Avacta Group (AVCT), BCI Minerals (BCI), Destiny Pharma (DEST), Globalworth Real Estate Investments (GWI), Henderson Alternative Strategies Trust (HAST), Herantis Pharma (HRTIS), Jupiter Green Investment Trust (JGC) and Rockhopper Exploration (RKH). Please note you should no longer rely on any previous research or estimates for these companies. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website

Companies: Avacta Group Plc

03 Aug 20

Cenkos: Seeing Machines Ltd - Better trading than expected

Seeing Machines has released a trading update demonstrating the business is performing better than expected on key metrics: Revenues of A$39.7m were 13% ahead of our expectations of $35.1m and cash of A$38.7m was 21% ahead of our expectations of A$32.0m. We believe this strong end to the financial year reflects the continued demand for the company's Fleet product by sophisticated fleet owners and that the key home markets of Australia and New Zealand have been less affected by COVID than feared. We believe this strong cash performance should reduce the perceived funding risk weighting and help the valuation recover towards previous levels. We iterate our Buy recommendation and 7.2p price target.

Companies: Seeing Machines Ltd.

03 Aug 20

K3 Capital - Making the most of lockdown

As is characteristic of this company, management has acted swiftly to execute an additional acquisition, putting the placing proceeds to work with another immediately earnings-enhancing acquisition, creating a Group with diversified revenue and profits, significant growth potential and greater visibility in a post-COVID world. We reintroduce estimates with CAGR in revenues of 29% between FY 2021 and FY 2023 and a CAGR in EBITDA of 34%. Quantuma, an insolvency and restructuring specialist targeting SMEs, is being acquired for £26.95m from existing resources to give an EBITDA multiple of 7.47x (EBITDA March 2020: £3.6m). Our forecasts take into account the greater visibility and predictability that the recent acquisitions bring to the Group. Our new SOTP valuation arrives at a reinstated price target of 300p.

Companies: K3 Capital Group Plc

29 Jul 20

Cenkos: Shearwater Group Plc -- Cautious on Covid

Shearwater delivered adjusted EBITDA ahead of expectations. FY20A was a strong year with the Group delivering maiden profitability and an enhanced margin profile. Cybersecurity and resilience are enduring themes but we are now cautiously presenting a picture of unchanged profitability in FY21E as a measure against the impact of COVID-19.

Companies: Shearwater Group

30 Jul 20

Still winning major deals

Sopheon has this morning announced a major win for Accolade – the global snack food giant, Mondelez. The deal is good evidence that Sopheon continues to win material deals despite the pressures of COVID-19, and that its innovation management platform is genuinely market-leading. We continue to believe that the group will see a return to strength as the market slowly recovers, and see today’s announcement as a useful signal.

Companies: Sopheon

28 Jul 20

Open Orphan* - COVID-19 Vaccine Ph I Trial Contract Signed

Open Orphan has announced the signing of a new contract with Codagenix Inc, a vaccine developer, to conduct a phase 1 trial for a COVID-19 vaccine candidate. The trial will focus on evaluation of safety and immunogenicity of the single-dose intranasal candidate in 48 volunteers. Although this is a phase I trial, in our view, it goes some way to validate Open Orphan's offering in the market and could lead to follow-on contracts. We expect the opportunity available to Open Orphan continues to increase and that H2 2020 should bring further good news flow and momentum to the stock. Reiterate buy

Companies: Open Orphan Plc

03 Aug 20

The Ince Group plc* - Stabilisation and Cause for Optimism

While Ince's FY20 results are complex given the various movements in reported figures associated with accounting for the Ince International consolidation, our assessment is that there are emerging signs of increasing operational effectiveness and reasons for optimism for investors. The operating environment and outlook remains opaque and thus we keep our forecasts and recommendation for the Group withdrawn at this time.

Companies: The Ince Group plc

03 Aug 20

Byotrol - Another positive trading update lifts forecasts

Byotrol released a further positive trading on the back of a strong Q1 FY 2021, citing product sales in excess of £3.4m in the quarter and for the business to significantly exceed full-year market forecasts. With the order book at the end of June still being c.£2m (similar to at 30 April) and continued improving supply chain management for biocidal ingredients, we have upgraded forecasts to reflect this outlook. We increase FY 2021 revenues, adjusted EBITDA and EPS by 15%, 38% and 55%, respectively. Consequently, we upgrade our target price to 10p, at which level the stock would trade on 3.7x sales. As previously indicated, we think the pandemic should result in a secular shift towards improved disinfection prevention, reducing the prospect of FY 2021 being a one-off exceptional performance. The prospect for further upgrades should current monthly revenues extend for longer than anticipated and additional IP monetisation events should not be discounted, in our view, either.

Companies: Byotrol Plc

28 Jul 20

Trading activity improves and NED appointment

The group has announced its H1 trading update, with a challenging Q2 due to lockdown effects albeit with improving trends throughout the quarter. With previously outlined cost savings of £1.6m and additional restructuring delivering a further £1m of annualised savings, the group expects the second half to be profitable and cash generative. Net debt at £14.6m has reduced a further £1m since March. Our forecasts and price target remain under review.

Companies: Flowtech Fluidpower Plc

03 Aug 20

Signs Softcat as a reseller, momentum elsewhere

Smartspace released positive news for both Space Connect and SwipedOn on Friday, sending the stock nearly 50% higher. Space Connect has signed a distribution agreement with Softcat and the SwipedOn has posted 80% yoy growth in AAR. Encouragingly too, SMRT also flagged current net cash at £1.7m (vs. £1.9m in April) demonstrating impressive reliance despite a challenging macro backdrop. In fact, SMRT has adapted quickly and is proving a ‘Covid beneficiary‘, seeing strong inbound demand as customers look for safe news ways to conduct business. Reassured by this, we continue to believe that Space Connect and SwipedOn could be worth considerably more than the current market cap.

Companies: Smartspace Software Plc

30 Jul 20

Reduced credit loss absorption capacity

As expected, the quarter saw a sharp increase in loan impairments. However, one can wonder if the increase was not capped by the group’s willingness to keep its results afloat. Management’s downbeat guidance in terms of revenue recovery potential and cost reduction does not bode well as regards the group’s future credit loss absorption capacity.

Companies: Lloyds Banking Group

31 Jul 20

Cenkos: SkinBioTherapeutics Plc - Significant progress

SkinBioTherapeutics has provided a development update for its two lead commercial programmes, demonstrating strong progress towards accessing two significant market opportunities, cosmetic ingredients and psoriasis. Sederma, the division of Croda which is developing SkinBiotix, has completed initial manufacturing development and has progressed to scale up validation. Following completion of the AxisBiotix formulation development ahead of schedule, SBTX has established a protocol for a self-managed food supplement trial, designed to mitigate the restriction associated with the COVID-19 pandemic. The trial is anticipated to commence in early 2021. We maintain our Buy recommendation.

Companies: SkinBioTherapeutics Plc

28 Jul 20

A strong FY20 despite Covid-19…. ……and increasingly optimistic on the future

IG Design Group has delivered another year of strong revenue growth (+10%), together with the transformational acquisition of the US company CSS. Adjusted profit before tax and diluted EPS were slightly down year-onyear but would have been ahead and in line with market expectations, adding back the adverse impact of Covid-19. A final dividend of 5.75p sees the full year figure up 3%. While the group has made a commendably strong start against its Covid-19 adjusted forecasts, the full year outturn for FY21E (and our view of a bounce back in FY22E) will nonetheless be adversely impacted by the ongoing changes brought about by Covid-19.

Companies: IG Design Group Plc

29 Jul 20

Resilient performance and confident outlook

Hargreaves’ FY20 results are very solid indeed. As previously reported, the only noticeable impact from COVID was in the slippage of Blindwells’ land sales, which were due to conclude during the lockdown period. Site activity has resumed and sales remain on track to conclude in the current year. A final dividend of 4.5p has been declared and the outlook statement is measured but confident. We reintroduce forecasts today, effectively reinstating our pre-COVID expectations. Hargreaves is well positioned to deliver a period of significant, renewed growth with the prospect of a double digit dividend yield from FY22 as HRMS profits are distributed.

Companies: Hargreaves Services

03 Aug 20

Wind of change

Adj. Q2 results largely as expected Fixtures indicate downside to near-term estimates Agreement to purchase wind turbine installation vessel at DSME Wind transition will be our focus on the conference call

Companies: Scorpio Bulkers

03 Aug 20

Agriculture leading the path, a long path, to recovery

CNHI released results which stated shrinking H1 20 revenue (-21.4% yoy), negatively impacted by its commercial and speciality vehicles segment (-26.6% yoy). This contraction translated into net income of €-1.3bn (vs. €654m in H1 19) and FCF of €-1.3bn (vs. €-541m in H1 19). For the outlook, the company expects FY20 revenue for its Industrial activities to reach €20.9-22.2bn, while keeping a negative FCF (despite its expectations of cash generating FCF in H2 20).

Companies: CNH Industrial NV

03 Aug 20

Negative estimate revisions to continue

We reiterate Sell with a new target of NOK 120 (130). Revenue revision has been negative post Q2 and we believe this trend will continue. While we expect 2H 2020 revenues of USD 196m, consensus is at USD 241m. Furthermore, 2021 estimates appear high as we do not believe TGS will be able to replace the 2020 backlog, which we believe will become evident over the next months. On 2020/21 numbers, we find no valuation support on FCF, P/E or EV/EBIT

Companies: TGS NOPEC GEOPHYSICAL CO

03 Aug 20

Stronger than expected North America will drive H2 recovery

FCA led in sales and volume losses among the European OEMs during H1. Operating performance also suffered significantly across most regions, though safe for North America, where a better than expected recovery in customer demand led to a positive EBIT surprise. For H2, FCA is once again banking on its North American strength to drive results, while Europe embarks on a more gradual recovery and Latin America remains deeply troubled.

Companies: Fiat Chrysler Automobiles

03 Aug 20

Over 60% of revenue coverage visible for 2020

The technology commercialisation Company focused solely on cyber security and risk has updated ahead of the Group's interim results for the six months ended 30 June 2020, which are expected to be released in September 2020. Within revenues, as anticipated, income from Consulting and product sales were 43% higher than the comparative period in 2019, with a planned reduction in revenues from software development. The Company expects to report total revenues of £674k, 18% ahead of the comparative period in 2019. The Company disclosed that although there is a high degree of uncertainty due to the current economic climate, the Company is cautiously optimistic of reporting full year results in line with market expectations, subject to the outcome of a few major product led bids over the coming months, and continued conversion of its pipeline of opportunities.

Companies: Crossword Cybersecurity Plc

03 Aug 20

SP Angel . Morning View

Adriatic Metals* (ADT1) - Non-Executive Director appointed | Alba Minerals (ALBA LN) – £450,000 fund-raising | Bluebird Merchant Ventures (BMV LN) – Southern Gold JV stake in S Korean JV “deemed” to be offered for sale | Bluejay Mining (JAY LN) – BUY, Target 20p – Public consultation highlights strong government and local citizens | Empire Metals (EEE LN) –– Munni Munni PGM drill results indicate potentially practical mining widths | Bushveld Minerals* (BMN LN) – Bushveld renegotiates agreement and further 65.1% of Enerox

Companies: ALBA BMV JAY EEE BMN

03 Aug 20

Oil & Gas Daily Flow

Union Jack Oil* (UJO LN): First commercial oil at Wressle on track for this year, OGA approval received | Independent Oil & Gas (IOG LN): EPCI awarded to HSM Offshore for the Company’s Core Project Phase 1 | San Leon Energy (SLE LN): Shrewd investment confirmed in Energy Link Infrastructure | United Oil & Gas (UOG LN): Tullow relinquishes 80% interest to United Oil & Gas in Walton Morant Licence, Jamaica

Companies: UJO IOG SLE UOG

03 Aug 20

Tax gains to the rescue

The group managed to keep its profits afloat in spite of increased impairments driven by its restructuring fund thanks to tax gains. Even if the pre-provision profits proved resilient, the reduction in impairments is not guaranteed next year as confirmed by management’s guidance.

Companies: Banco Comercial Portugues

03 Aug 20

EBIT miss on spare parts decline

MTU posted a mixed set of Q2 results with EBIT missing expectations. New 2020 targets make us comfortable in terms of revenues and FCF, while our group margin assumption is too high. We remain cautious on the stock.

Companies: MTU Aero Engines

03 Aug 20

Q2 was worse, though sequential recovery is encouraging

As expected, Q2 was worse than Q1 with sales plummeting 46.1%. However, revenue hit a trough in April, followed by a marked sequential recovery in May and June. Lenses saw almost flat sales in June, benefiting from pent-up in demand for prescription products and new product launches. Retail is approaching normalcy on the back of progressive improvements in traffic and higher conversion rates. Wholesale is a bit behind, though the progressive recovery of independents and key accounts should provide support.

Companies: Essilor International

03 Aug 20

Crossword Cybersecurity 'cautiously optimistic' on 2020 as first half revenues increase 18%

03 Aug 20

Well-positioned to benefit from a recovery

The H1 20 figures have shown that nobody is immune to the pandemic crisis. Despite the stronger beginning of the year, all regions have reported a sharp decline in Q2 20 except for mainland China. Heavier than expected fixed costs have dragged down the operating margin to 21.5% (vs. 34.8% in H1 19). However, the maintained expansion plans, the encouraging recovery in Asia, and the lower tourist exposure have together enhanced our confidence in the group’s post-pandemic outlook.

Companies: Hermes International SCA

03 Aug 20

United Oil's Larkin says taking over as operator in Jamaica is 'extremely exciting development'

03 Aug 20

Botanical Holdings secures 31 hectares of land in Portugal for medicinal cannabis operations

03 Aug 20

The revitalisation may need more time

AF-KLM reported an enormous Q2 net loss as the market expected. The H2 performance is deemed to remain depressed and the group will need one year more than it first expected to reach its mid-term financial targets.

Companies: Air France KLM