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04 Mar 21

LIBERUM: Plus500* - Conditions remain attractive

In addition to highlighting the relatively attractive underlying conditions that prevailed in February, in this note we introduce our FY23 estimates. We believe that the latter helps to further highlight the attractive valuation and growth potential offered by the group, as well as the significant valuation discount that Plus500 trades on relative to its peers. We see the latter as inappropriate given the clear benefits of the group’s best-in-class platform, its scalable technology and agile marketing algorithms. We expect these factors to drive continued market share gains and superior financial returns, and as a result, we reiterate our BUY rating.

Companies: Plus500 Ltd.

05 Mar 21

RBG Holdings - Promising Outlook for 2021 – Updating Earnings

The recent capital markets day presentations provided a clear strategic direction and purpose to the RBG Holdings strategy and the resulting diversification of operations. The quality of Rosenblatt law has continued to show through and the flexible approach to staffing, allied to the business mix and fee arrangements, provides excellent margins. The branching out into other related professional services is strategically sensible and recent updates from the Group suggest execution is improving, particularly this morning's announcement of further deal completions at Convex. There's lots to like in Rosenblatt's business and we maintain our buy rating while seeing medium term strategic and competitive challenges for other mid-market UK focused law firms.

Companies: RBG Holdings Plc

08 Mar 21

Webselenese – a key strategic acquisition…

…and immediately earnings enhancing

Companies: Kape Technologies Plc

04 Mar 21

LIBERUM: Futura Medical* - Financing positive, Asia deal struck and EU approval on-track

Futura has secured £1.5m from convertible loan notes with a Hong Kong based PE fund. There is potential for a further £0.5m through warrants. It has also signed a commercial deal for its erectile dysfunction product MED3000 for certain Asian countries including China. Under the deal its partner will fund all development and related costs with Futura set to receive 50% of future profits. Lastly, its EU regulatory filing remains on-track with approval likely in the coming months in our view. We think this update gives management the room to deliver an EU approval which can unlock a major out-licensing deal whilst it also secures costless access for the Asian opportunity. This will put the firm on a strong footing to execute its US study this year that should lead to a further value inflection. BUY.

Companies: Futura Medical plc

02 Mar 21

WHI Morning Comment: AFC Energy (AFC) - AFC Energy's Final Results

AFC Energy's Final Results for the year ended 31 October 2020 indicate the company is in a position of strength and at inflection point of sales growth. Results were better than we had forecast with a reported loss of £4.2M (WHIe £4.5M) and cash flow from operations of £4.3M (WHIe £4.2M). Most importantly, the company ended the period with a stronger cash balance than we had expected of £31.6M (WHIe £29.9M) reflecting the capital light strategy the company is applying. The year-end confirmed order book of £1.1M indicates that AFC Energy, after decades of investment, is past the inflection point that is translating its globally unique technology into a highly-compelling, long-term commercial growth opportunity.

Companies: AFC Energy plc

08 Mar 21

LIBERUM: Frontier Developments* - The Odyssey begins this month

We believe that all of Frontier’s games will continue to make strong revenue contributions through H2 of FY21, but the key sales event will be the release of Elite Dangerous: Odyssey expected before the end of May. Our FY21 revenue forecasts look well underpinned, but in this report we look at the upside sensitivity to our numbers as c.0.5m active Elite players embark on a new Odyssey, and the company seeks to attract 3.5m+ of inactive/lapsed players back into the franchise. Simultaneously, there is an intriguing potential pool of eight million Elite base game owners following on from last year’s Epic Free Week. No changes to forecasts, TP £35.40.

Companies: Frontier Developments Plc

02 Mar 21

Delivering sustainable, quality growth

Begbies Traynor’s track record demonstrates its ability to generate consistent growth in increasingly sustainable revenues across the economic cycle. This stems from a strategy driven by value-accretive acquisitions over the past six years, designed to build both upon existing and develop new, complementary disciplines. Returns have also been enhanced by organic investment in service line expansion, employee development / recruitment, and processes focused upon improved working practices and client service. The results are clearly visible in 16% CAGR in EPS from FY16-FY20, consistently positive cash generation and 8% pa dividend growth since 2017. Earnings growth is significantly ahead of the UK insolvency market (4% CAGR FY16-FY20), reflecting improved market shares from an increasingly diversified business, divisional cross sales / referrals, and the benefit of the acquisition strategy.

Companies: Begbies Traynor Group plc

01 Mar 21

THE MONTHLY March 2021

UK railway privatisation, which was launched in the mid-1990s, has finally turned full circle: the Department of Transport has recently confirmed that its controversial railway franchise system will be scrapped. In this month's feature article, Nigel Hawkins, the Infrastructure analyst at Hardman & Co, examines the 25-year history of railway privatisation and chronicles its ups and its downs. The successes of railway privatisation, such as new rolling stock, are addressed, along with the many shortcomings, which included minimal vertical integration. With the winding up of the franchise system, the UK railway sector is effectively reverting to its former status as a nationalised industry, a shift started with the renationalisation of the collapsed Railtrack – later re-badged as Network Rail – in 2001.

Companies: ARBB BBGI CLIG DNL FLTA ICGT OCI PCA PIN PXC RECI SCE TRX SHED VTA YEW

02 Mar 21

Emphatic validation on Oxgene sale, plus upgrades

Mercia has validated the model emphatically with the sale of Oxgene, the second-largest portfolio investment, for £30.7m. This is nearly double the carrying value and a £14.6m realised gain, equating to a 5x return/51% IRR. 3rd party funds also benefited. This underscores embedded value, prudent carrying values and the “Complete Connected Capital” model. An accompanying update points to strong underlying performance which drives a 56% FY21e adj. EBITDA upgrade and +13-15% in outer years. The shares trade at an unwarranted ~30% discount to our revised NAV (+12%) and a ~40% discount to our SOTP intrinsic value.

Companies: Mercia Asset Management PLC

04 Mar 21

Cenkos: HeiQ Plc -- Synbio Inside: Chrisal acquisition

HeiQ has announced the acquisition of a 51% stake in Chrisal, a Belgian company developing pre- and probiotic formulations (Synbiotics) to support a healthy, stable microbiome on the surfaces to which it is applied. HeiQ will pay €7.5m (in cash and shares) for its majority holding, providing access to a complementary technology platform and adjacent markets such as cosmetics, surface hygiene treatment and water purification. Chrisal generated revenues of €5.5m in the 12-months to Dec-20 and an operating profit of €1.6m. We maintain our Buy recommendation on HeiQ.

Companies: HeiQ PLC

04 Mar 21

Commercialisation deal for China and SE Asia

Futura Medical has struck an innovative deal with Atlantis Group to market its MED3000 topical gel for erectile dysfunction throughout China and South East Asia. Atlantis, and its associated companies, will fund any registration studies and commercialisation costs in the region, with the resulting profits being split 50:50. Atlantic will also invest £2.0m in Futura Medical through £1.5m as Convertible Loan Notes and £0.5m in warrants, with a conversion price of 20p and exercise price of 22p respectively. The collaboration addresses market access to the largest target population for MED3000. Updating our model to reflect this deal, our new valuation is £181.5m, equivalent to 73.1p per share (71.3p fully diluted), from £153.8m (60.9p a share), previously.

Companies: Futura Medical plc

05 Mar 21

Convex motoring ahead; another deal completed

Another deal from RBGP’s CF division brings YTD completions to four, with today’s netting the Group a fee of £1.5m (£2.6m deal fees YTD). Our bullish view on 2021 M&A activity levels (set out here) continues to be substantiated, and a further eight deals are expected to complete in the short to medium term. As we learnt at the recent CMD, Convex has focused on building a portfolio of potential deals across multiple COVID-resilient sectors, with a strong pipeline beyond the near term. On current forecasts, RBGP trades on a 13.1x PER FY21E (9.4x EV/EBITDA). We leave forecasts unchanged and will look to revisit them once FY20 results are published on April 20th 2021.

Companies: RBG Holdings Plc

05 Mar 21

New skin

Aviva released its 2020 figures, with an operating profit of £3,161m and an IFRS profit after tax at £2,910m up 9.2% yoy. The Board will propose a final dividend of 14p/share. The insurer announced new financial targets with at least $5bn of cumulative cash remittance, £300m of cost reduction and a debt leverage ratio <30%. This update was expected regarding the sale of many operations in 2020. Aviva plans also to become a net zero carbon emissions company by 2040.

Companies: Aviva plc

02 Mar 21

Strong FY20 Results

Shanta Gold (AIM: SHG), the East Africa-focused gold producer has, this morning, released its full year results for 2020. The company previously announced production and operational figures for 2020 alongside group-wide reserves and resources update. As such the figures reported today are in line with our forecasts down to EBITDA level, but generally better than expected elsewhere– see Fig 1. Overall it has clearly been a strong year financially with revenue, EBITDA and EPS up by 31%, 34% and 270% respectively from the previous year. The company has also kept to its promise of a maiden dividend with 0.10p per share payable in April as part of a semi-annual programme.

Companies: Shanta Gold Limited

02 Mar 21

Hurricane Energy - Lancaster activity update

Lancaster activity update

Companies: Hurricane Energy Plc

09 Mar 21

A remarkable success story

Weiss Korea Opportunity Fund (WKOF) was one of the best-performing of all London-listed investment companies last year, and since its 2013 launch it has delivered more than twice the return of its performance benchmark index, the MSCI Korea 25/50 Index (see page 4). WKOF has a unique investment approach within the investment company sector. Not only is it the only UK-listed fund offering investors dedicated access to South Korean stocks, it has also adopted a differentiated investment approach that seeks to profit from the valuation gap between the non-voting Korean preference shares that make up substantially all of its portfolio and the common shares issued by the same companies. As we describe in this note, a considerable opportunity still remains for WKOF’s investment managers to continue to add value from this oftenoverlooked market.

Companies: Weiss Korea Opportunity Fund

09 Mar 21

Capacity recovery hoping to come later but quickly

IAG delivered in line FY20 results and continues to seek further cost efficiency and liquidity flexibility. The group foresees a slower-than-peers capacity recovery for the short term but a faster one for the longer term.

Companies: International Consolidated Airlines Group SA

09 Mar 21

A remarkable success story

Weiss Korea Opportunity Fund (WKOF) was one of the bestperforming of all London-listed investment companies last year, and since its 2013 launch it has delivered more than twice the return of its benchmark. WKOF has a unique investment approach within the investment company sector. Not only is it the only UK-listed fund offering investors dedicated access to South Korean stocks, it has also adopted a differentiated investment approach that seeks to profit from the valuation gap between the non-voting Korean preference shares that make up substantially all of its portfolio and their equivalent common shares. As we describe in this note, a considerable opportunity still remains for its investment managers to continue to add value from this often-overlooked market.

Companies: Weiss Korea Opportunity Fund

09 Mar 21

SP Angel Morning View: Battery Metals continue as base metals steady

Condor Gold* (CNR LN) – Infill drilling at La India Cornish Metals* (CUSN LN) – CLICK FOR PDF – Agreements on South Crofty Mount Burgess Mining (MTB AX) – A$0.009, mkt cap A$5.9m – Copper mineralisation at Kihabe Polymetallic Deposit, Botswana Rio Tinto (RIO LN) – Rio Tinto to build tellurium recovery plant at Utah copper mine

Companies: CUSN CNR RIO MTB

09 Mar 21

MPC Capital - Launching new sustainable funds

MPC Capital continues to bring new institutional assets onboard, with c €0.5bn added in 2020 (mostly in the real estate segment). This largely offset the declining legacy retail business, with MPC’s assets under management (AUM) declining slightly to €4.4bn (84% of which are institutional assets) from €4.5bn at end-2019. MPC guides to lower revenue in FY21 (partially due to negative JV consolidation effects) and an improved pre-tax profit, which may benefit from continued strength in the container shipping market and expansion in sustainable assets. The latter includes a €300m ESG housing fund and a US$100m investment vehicle focused on developing green and low-cost energy infrastructure.

Companies: MPC Munchmeyer Petersen Capital AG

09 Mar 21

SP Angel Oil & Gas Daily Flow: 09/03/21

Market update - 09/03/2021

Companies: CNE CNE PTR WTE

09 Mar 21

COVID disappointment of little relevance to chronic programmes

While termination of the ABX464 COViD Phase 2b / 3 miRAGE trial is clearly a disappointment, we see little read-through to the core ABX464 programmes in chronic inflammation. The basis of the acute inflammatory storm in patients with severe COVID remains poorly understood. These negative data likely reflect the distinct natures of acute and chronic inflammatory disease, where strong Phase 2 data in ulcerative colitis already supports ABX464 safety and efficacy. Abivax remains substantially undervalued. With data from Phase 2b in ulcerative colitis ("UC") and Phase 2a in rheumatoid arthritis due in Q2/2021E, we see strong probability of a major partnering deal by the end of the year. We reiterate our OUTPERFORM recommendation with a revised target price of €43 / share (from €50 / share).

Companies: Abivax

09 Mar 21

Capital Access' Hot Off The Wires - The Day Ahead

Today's news & views, plus announcements from SLA, MNG, AVST, ITV, SMWH, CNE, DOM, GGP, DFS, KLR, SOHO, SOLG

Companies: SolGold Plc

09 Mar 21

SIGA Technologies – executive interview

09 Mar 21

Growth set to accelerate

After producing impressive 17% organic growth in Clareti ARR in FY20, despite COVID headwinds, we expect ARR growth to accelerate to >25% in FY21, with 85% plus of this revenue already visible given the recurring revenue model. We introduce forecasts today of a further 20% ARR growth in FY22. Stripping out cash of £9m, valuing legacy revenues at 1x (£9m) and Clareti Services at 2x (£11m), the residual £78m is 4.9x FY21 Clareti ARR, falling to 4.1x FY22 ARR. This looks too low to us: a key reason GHT is one of our top picks for 2021.

Companies: Gresham Technologies plc

09 Mar 21

Interims in line, waiting for orders to land

The H1 performance was largely pre-flagged and illustrates how the business is beginning to scale. Revenues increased fourfold to £7.7m, with both Covid and non-Covid related activities contributing to growth. Whilst there is further growth required to hit our FY21 estimates, the company points to an active pipeline of late stage contract opportunities, particularly for international sales of its AbC-19 rapid antibody test. The timing of these is somewhat uncertain, but we make no changes to our forecasts. We continue to see a very material opportunity for antibody and antigen testing in the short and medium term.

Companies: Abingdon Health PLC

09 Mar 21

Good strategic progress despite covid backdrop

Something exciting is afoot at Brand Architekts. While backward looking results confirm the impact of lock-down restrictions, albeit an EBITDA decline of <20% isn’t a bad outcome, net cash is up >5% to £19m (c80% of the MKT CAP) and forward looking prospects are improving. BAR has pushed ahead with key parts of the growth strategy (Project 50), in particular brand relaunches, marketing plans, and DTC development - suggesting an imminent inflection point. M&A remains a key focus too, albeit timing is hard to predict. BAR is therefore one step closer to our sensitivity analysis suggesting c£160m future value potential vs £24m today.

Companies: Brand Architekts Group plc

09 Mar 21

Establishing a high-growth energy services Group

FY’21 is proving to be a transformational year for eEnergy. Today’s interims cover a period of significant revenue growth and margin improvement, driving the transition to break even as expected. This, though, only tells half the story, given that the strategically important Beond acquisition took place at the very end of the period. Full year guidance is reiterated, as are management’s ambitions to build a broader energy services Group around the platform that has already been established.

Companies: eEnergy Group PLC

09 Mar 21

Nicox - No surprises as NCX-470 Phase III trials advance

Nicox’s lead candidate NCX-470 targets the topical treatment of glaucoma by utilising and expanding on an already-established dual intraocular pressure (IOP)-lowering mechanistic approach. Top-line data from Mont Blanc, the first of two Phase III studies, is expected in H122. The second Phase III trial, Denali, already ongoing in the US, recently received approval to begin enrolling patients in China. Denali study data is expected in Q422, which we believe should support a potential US launch in 2024. Nicox recently reported FY20 results, which were in line with our estimates in terms of product sales-related royalty revenue, and slightly ahead in terms of free cash flow.

Companies: NicOx (COX:EPA)Nicox SA (COX:PAR)

09 Mar 21

Gamesys Group - Ahead of recent guidance

Gamesys Group’s FY20 results are ahead of expectations, rounding off a year of persistent upgrades. There was strong revenue growth in most geographies driven by organic growth and new product launches. The company continues to demonstrate strong cash conversion, leading to a significant improvement in the year-end financial position, which helped to fund a better than expected final dividend. FY21 has had a ‘very good start’ but we note that comparatives become more difficult as we move into Q221 following the COVID-19 pandemic. We have increased our EBITDA forecasts for FY21 and FY22 by 1–2%. On our new forecasts, the FY21 free cash flow (FCF) yield is 10.1% and the dividend yield is 2.9%.

Companies: Gamesys Group PLC