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07 Apr 20

LIBERUM: Plus500* - Making the most of the opportunity

The record 1Q20 performance is due to more than just favourable market conditions. It also reflects the benefits of the group’s best-in-class platform, which continues to deliver despite lower leverage limits. Its scalable technology and agile marketing algorithms has enabled it to add 83k new users during the period, at less than half our forecasted AUAC. This dynamic, combined with the quality of these users, sees us upgrade FY20 PBT by 26% and positions the group to continue to deliver profitable growth in the medium-term. Despite this the shares trade on just 9.0x CY21 earnings, and as a result we reiterate our BUY rating and increase our TP to 1500p (from 1450p).

Companies: Plus500

07 Apr 20

The Promised Land

Red Dwarf, the very British sci-fi comedy franchise, ran for 11 seasons – most recently in 2017; and The Promised Land is a feature-length TV movie – out this year. Yes, the programme is an acquired taste. Strangely, too, many episodes are impacted by a virus or three (physiological, not main-frame).

Companies: WJG BKG CSP CRST MCS INL BDEV RDW GLE SPR TW/ PSN VTY GLV CRN ABBY BWY

09 Apr 20

Hurricane Energy

Forecast update

Companies: Hurricane Energy

02 Apr 20

Cenkos: Duke Royalty Ltd -- Assessing the impact across the portfolio

The scaling of Duke's royalty portfolio was progressing as expected up to March 2020, with record cash receipts that month. Due to Covid-19 and the UK's economic shutdown, macro conditions have worsened and become highly uncertain. This is likely to see some royalty partners' future cash royalties decline, which in turn, will negatively impact FV's in the FY20E results. Duke's high margin and cash generative nature ensures it is well placed to trade through these challenges. Given the degree of uncertainty in outlook, we remove forecasts and put our recommendation Under Review and await further clarity on the portfolio.

Companies: Duke Royalty

06 Apr 20

LIBERUM: SigmaRoc* - Strong liquidity position and cash flow maximisation

SigmaRoc has issued an update on the impact of Covid-19 containment issues. It is adopting a pragmatic approach, operating facilities where this can be done safely and in compliance with government guidelines, and subject to demand (which continues to come from maintenance, agriculture and infrastructure).

Companies: Sigmaroc

07 Apr 20

Defensive in the face of Coronavirus threat

Residential for rent developer and manager Watkin Jones traded strongly in H1 but faces inevitable disruption on its student housing and build-to-rent developments, according to last week’s pre-close update. However, we believe its established defensive qualities are demonstrated by its net cash position, forward sold position and ‘capital-light’ model. Although it has withdrawn guidance, we believe it is strongly placed to return to growth when the virus abates and could exploit widespread land opportunities.

Companies: Watkin Jones

08 Apr 20

More Q4 contract wins reveal a switch to SaaS

The YE trading update reveals that management has actioned its proposed switch from a perpetual licence to a SaaS business during FY 2020. We therefore adjust our forecasts as moving customers from one-off perpetual licence contracts to recurring revenue contracts takes longer to implement and revenue is recognised over a longer period. Despite COVID-19, D4t4 made good progress in Q4 since the January update (with its own raft of contract wins), and several more contracts have been secured on a multi-year ‘as-a-service’ basis, providing additional recurring revenue visibility (now 46% of total sales) over the next three years. Management does not expect any significant interruptions in customer service or its distribution channels. However, actions taken to mitigate the impact of the virus include home working; preserving cash; and securing additional liquidity from the bank if required. The final dividend and FY 2021 forecasts are under review, however the £0.5m share buyback programme continues.

Companies: D4T4 Solutions

03 Apr 20

Supercharging customer data with an expanded Audiens

Bango has announced the expansion of its strategic relationship with NHN Corp, the Korean big data giant. NHN is investing £6.5m to take a majority interest in the Audiens business, owned by Bango. For its investment NHN gains a 60% stake in Bango Deep, the Bango subsidiary which owns the Audiens Customer Data Platform (CDP). NHN will inject its data science technology into Audiens to grow it into a world leading CDP. In addition, NHN has also subscribed for 3.5m new ordinary shares in Bango – 4.7% of the group’s existing ordinary share capital. Bango paid approximately £4m for Audiens. NHN is paying £6.5m for 60% of that business. We revise estimates following the announcement to reflect that Audiens will no longer be fully consolidated in Bango’s accounts. We believe the deal validates Bango’s investment in Audiens and represents a significant vote of confidence in both the data monetisation business and in Bango itself, by a highly successful commerce leader.

Companies: Bango

02 Apr 20

Time to be patient

Storms eventually blow over, even CAT 5 hurricanes like COVID-19, which has grounded airlines, cruise ships & travel firms worldwide. Together with forcing many others to close, namely pubs, restaurants, hotels and more recently construction sites.

Companies: Watkin Jones

07 Apr 20

Intense period of Business Development

OptiBiotix ("OPTI") recently announced a number of new commercial agreements for marketed functional food ingredients SlimBiome and LP-LDL. These new agreements take the number of commercial deals for both products to 57 and include a mixture of new distribution and manufacturing agreements, not only increasing the number of countries where products containing OPTI's ingredients are sold to over 70, but are also anticipated to improve profitability through the renegotiation of manufacture deals which provide OPTI with greater control over the value chain. OPTI's ability to continue to sign commercial agreements despite the ongoing disruption related to the COVID-19 crisis is impressive, in our opinion, and the company continues to build momentum in a year when we expect existing agreements to start generating substantial revenue streams. We maintain our OUTPERFORM recommendation, trimming our target price to GBp 93 (from GBp 97).

Companies: Optibiotix Health

03 Apr 20

Bango - Finding a new Audiens

In a remarkable coup for Bango, Korean technology leader NHN Corp is taking control of the Audiens Customer Data Platform (CDP) business by investing £6.5m for a 60% stake in the holding company, Bango Deep Ltd, with a view to scaling up Audiens through support and technology into a truly world-class CDP provider. NHN is further securing and deepening its relationship with Bango itself by taking 3.5m Bango ordinary shares (4.7% of the expanded Bango) for £3.2m. This is an excellent deal for Bango, sealed at a time of restricted travel and tightened commercial prospects and possible only because Bango is already partnered, and trusted by the Korean technology giant. The deal takes a non-core, near-breakeven business off the Bango P&L and sharpens management focus, while maintaining a substantive interest in what – now backed by NHN’s cash, expertise and data technology – should become a major global player in the lucrative, high-growth CDP market. On top of this, Bango strengthens its balance sheet with a cash injection and the strategic partnership between NHN and Bango itself is substantively deepened. We adjust our FY 2020 forecast for the change in Audiens accounting status and the cash injection, and highlight the value.

Companies: Bango

07 Apr 20

LIBERUM: Codemasters* - H2 profits ahead of forecasts

A FY20 trading update reveals the further accelerating shift to digital in H2, delivering EBITDA 16% ahead of our FY forecast. We have made some modest revisions to our FY21 forecast given the lack of live Sunday racing, but the reception for replacement Esports events has clearly been very positive; we also await news on the release date of the Fast and Furious game. The shares have returned to an unjustified c40% discount to the sector which we expect to close as game release dates are confirmed, and the Company benefits from the wider sector trends as stay-at-home consumers look for entertainment.

Companies: Codemasters

06 Apr 20

RBG Holdings

Solid Trading Update

Companies: Rosenblatt Group

08 Apr 20

LIBERUM: Frontier Developments* - Key takeaways from the investor call

Yesterday management hosted a call with investors to provide an update on the business and wider sector trends amidst the ongoing COVID-19 pandemic. The discussion centred around: (1) changes in current player habits and how the company is benefitting, (2) a successful transition to the WFH model and limited impact on the release schedule, (3) the increasingly visible and diverse pipeline, (4) strong momentum in 3PP, and (5) the counter-cyclical potential of the games industry. Whilst we make no changes to our forecasts today, we believe that the current environment provides scope for upside surprise throughout the wider sector and we expect companies like FDEV to continue to re-rate as the market prices in that opportunity.

Companies: Frontier Developments

02 Apr 20

Unscheduled update as it beats expectations for year ended March

Gear4music has issued a brief unscheduled update today, highlighting that profits for the year ended 31st March will be ahead of expectations. The business has successfully executed a number of strategic and operational changes over the year (in response to the challenges in 2018) and the benefits have emerged strongly. It reported 2 weeks ago that it had not been impacted by COVID19, and today it confirms that it has quickly reconfigured its operations in response to new government guidelines and has strict disciplines in place to ensure safety & continuity in its DCs. Early signs support the idea this product sector could be a beneficiary of consumers being confined at home for long periods, but only time will tell. We have not upgraded any forecasts pending more details in the update on 23 April.

Companies: Gear4music

09 Apr 20

S&U - Update Note - Preliminary Results

S&U released its preliminary FY20 results yesterday morning, which demonstrate considerable resilience against a backdrop of election and Brexit turbulence and weakening consumer demand - although that already feels like ancient history.

Companies: S&U

09 Apr 20

Panther Metals PLC to emerge 'in a very strong place' when normal operations resume

09 Apr 20

Oil & Gas Daily Flow

Energean Oil & Gas (ENOG LN): 32% uplift in resource base delivers firm gas sales contracts | Regal Petroleum (RPT LN): FY19 Results - Revenues cash flows hit by subdued Ukrainian commodity pricing | IGas Energy (IGAS LN): Robust FY19 results despite volatile pricing | TransGlobe Energy (TGL LN): Further hedging protection secured

Companies: ENOG RPT IGAS TGL

09 Apr 20

SP Angel Healthcare Conditions

Silence Therapeutics (SLN.L): COVID-19 Partnership | Tiziana Life Sciences (TILS.L): Development of TZLS-50 for COVID-19 | Advanced Oncotherapy (AVO.L): £15m fundraise and Covid-19 update

Companies: SLN TILS AVO

09 Apr 20

Lloyd Fonds - On to the next chapter

Lloyd Fonds (LF) continues its operational realignment process with Strategy 2023/2025 kicking off in FY20 – this should help complete its transformation to an active asset manager in the medium term. In 2019 (under the previous plan), LF laid the foundation for its three-pillar structure through acquisitions of Lange Assets & Consulting and SPSW Capital, as well as through the development and implementation of an algorithm, which enables the use of artificial intelligence in the investment process. Digitalisation of business operations (including its Digital Asset Platform) could help LF mitigate the impact of the coronavirus outbreak and allow it to approach the targeted €7bn AUM.

Companies: Lloyd Fonds

09 Apr 20

WHI First Light: Caledonia Mining (CMCL) & Watchstone Group (WTG)

Caledonia today provides an update on production from the Blanket mine in Zimbabwe with 14.2koz gold produced in Q1 2020 – an increase of 19% over the same period in the prior financial year. A focus on development rather than production in the final quarter of 2019 means that Caledonia should be able to balance production over the remaining quarters of the year and hit its production target of between 53-56koz for FY 2020. Following on from the updates to the market provided on 10 February 2020 and 25 March 2020, Watchstone has this morning confirmed a proposed return of cash to shareholders totalling £50.5m/110p per share. A formal General Meeting will be held on 27 April 2020, and subject to shareholder and Court approval, trading in the shares ex-entitlement to the return of cash is expected to commence on 11 June 2020, with a return of 110p per share on or around 30 June 2020.

Companies: Caledonia Mining Corporation Plc Com Shs Npv Watchstone Group

09 Apr 20

Strong FY20. Look through the short-term disruption.

Eckoh’s trading update today implies record FYMar20 results in line with market expectations. While not disclosed today, we estimate that the US saw u/l organic revenue growth of c. 18%, and within that, Secure Payments estimated growth of c. 70%, driving EPS growth of some 80% yoy. These results and today’s CV19 update are in line with our update from 31st March. Some delays have emerged in US SecPay decision-making, but deals should conclude in due course. As we flagged, the UK has seen some volume declines, but expect a rapid recovery when lockdown ends. Looking beyond short-term disruption, the stand-out opportunity for Eckoh is US SecPay. Here Eckoh has momentum and is market leader in a nascent market with a patent-protected solution. All that for an historic FCF yield of c. 5.5%.

Companies: Eckoh

09 Apr 20

Trading update and COVID-19 impact

The Group has issued a trading update for H1 FY2020E and withdrawn guidance due to the uncertainties created by COVID-19 and the currently depressed oil price. The statement notes strong divisional order books at the half year and good progress against strategic objectives with all sites open and working on the basis of ‘business as usual, with caution’. Nevertheless, both its divisions, Chesterfield Special Cylinders (‘CSC’) and Precision Machined Components (‘PMC’), began to experience some operational disruption and capacity issues in March due to COVID-19. When combined with projects phasing in CSC and continued operational issues at PMC, the first half now looks set to produce a broadly breakeven operating result. Management highlights actions to conserve cash whilst preserving core capabilities and the foundation for future growth.

Companies: Pressure Technologies

09 Apr 20

Anglo Asian's Bill Morgan updates on operations and further shipment of gold doré

09 Apr 20

Trading update and COVID-19

The group has issued a trading update confirming that it believes that results for the year to May 2020 will be broadly in line with previous management expectations for revenue and profit, and that net debt is also expected to be no greater than previous guidance. The statement notes that despite the impact of COVID-19, many parts of the Group are continuing to operate as normal and to benefit as previously disclosed from a robust order book and prospect pipeline. Prudent measures are nonetheless being taken as necessary to reduce costs and mitigate disruption effects. The Group notes business progress has been affected by travel restrictions, lockdowns and supply chain disruption and as a result 20% of employees have been furloughed. China operations are back to normal and some sectors – medical, nuclear and defence are relatively unaffected as expected. The statement notes facility headroom of £8m and steps taken to conserve cash, including cancellation of the interim dividend. Guidance is withdrawn for FY2021E. In our view the experience of the management team leaves the Group in a strong position to weather events and to respond further if necessary. Once the crisis passes there should be opportunities for the Group to further implement its successful Pinpoint-Invest-Exit strategy.

Companies: Avingtrans

09 Apr 20

Financially resilient and well-placed to bounce back after COVID19

Consistent with most consumer businesses, Warpaint anticipates a significant fall in sales this year and has withdrawn guidance. However, it has taken action on costs using all available internal and external support mechanisms and the board believes it has the financial strength to withstand disruption until “at least the end of 2020” without needing any additional debt financing; on 08 April it had £3.3m cash and c£0.5m debt. As we noted 3 weeks ago, Warpaint looks capable of breaking-even in 2020 even if sales fell to c£30m (-40%) which appears to be an extreme scenario. The group is well placed to benefit from any improvement in conditions and there remains a big window of opportunity to complete/fulfil customer orders for the important gifting segment later in the year should COVID19 restrictions ease.

Companies: Warpaint London

09 Apr 20

VSA Morning Miner

Central Asia Metals (CAML LN) has released strong results for Q1 2020 with higher production across copper, lead and zinc. Copper output of 3.2kt was up 8% YoY and 2% QoQ. Zinc production of 6.1kt was up 9% YoY and 8% QoQ while lead output of 7.6kt was up 5% YoY and 2% QoQ.

Companies: Central Asia Metals

09 Apr 20

A strong final quarter….

Distil has published its Q4 trading update, confirming a strong finish to FY20E and outperforming the wider UK alcohol market. Against a weak Brexit-driven performance in Q4 last year, Distil delivered a volume increase of 80%, with revenues almost doubling with a 97% increase. Demand was strong from off-trade (retail) customers, looking to bolster stocks in response to the COVID-19 outbreak and subsequent higher levels of endconsumer demand. Management has confirmed FY20E performance to be in line with current market expectations, as outlined in its February update.

Companies: Distil

09 Apr 20

CentralNic Group ‘a stock to hold in tough markets’ says Zeus Analyst Bob Liao (Interview)

Premium

09 Apr 20

Maiden EBITDA profit in H2; PTT gaining traction

Finals from Mobile Tornado, a leading global provider of Push to Talk (PTT) solutions, were in line with January’s trading update and our revised forecasts with revenue +16% to £3.5m and adj. EBITDA (pre-IFRS 16) loss of £0.3m (FY18: £0.9m loss). There was growth in H2 over H1 and combined with good cost control, MBT was EBITDA breakeven in H2 – an important milestone. During FY19, MBT secured strategic clients in multiple territories and sectors (Public and Private) and major public safety contract negotiations are ongoing on three continents. MBT continues to enhance its product offering and can offer a fast, scalable, secure and high function PTT solution with more functionality and at a significantly lower total cost of ownership compared with traditional LMR services. COVID-19 may act as a catalyst for many organisations to upgrade communication systems. That said, the potential disruption on sales cycles/deployments is unclear and hence we are holding off introducing FY20 forecasts for the time being.

Companies: Mobile Tornado Group