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18 Feb 20

LIBERUM: Sylvania Platinum* - Dislocation from record prices

Sylvania Platinum is trading at extremely cheap levels, just 0.9x adjusted EV/EBITDA on spot. The market clearly feels nervous about the rapid rise in the underlying commodities, palladium and rhodium.

Companies: Sylvania Platinum

13 Feb 20

Y/e trading update – sales ahead, cash in line

Checkit has provided an encouraging year-end trading update to January, disclosing sales of £11.8m, 5% ahead of forecasts, equivalent to +3% LFL growth (group basis), or +8% (ex. EET; non-core). Cash is also reported at £14.3m – ahead of forecasts, but distorted by non-trading activities. After adjusting for both, we believe the underlying cash position is £12.4m – in line with forecasts, in turn implying that CKT’s investment program (and resulting cash burn) is proceeding as anticipated. The update also splits out Checkit Europe’s and Checkit UK’s sales. While such segmental reporting will not be continued, it is reassuring to note that Checkit Plc has acquired a company (now branded ‘Checkit UK’) in good financial health, as it grew pro-forma sales 7% y/y to £11.6m. Checkit Europe meanwhile grew more strongly, at +30% (but off a low base) to £1.3m. Looking forward, y/e pro-forma sales of £14.8m compares against £17.2m expected in FY21E, implying 16% growth. Driving this, we expect Checkit’s landmark contract win with BP (announced Oct-19) to be a material driver. To remind, Checkit won a three year deal to provide its Real Time Operations Management capability to BP at 320 sites. Naturally, we viewed this announcement very positively – as it provided validation of Checkit’s proposition (at an enterprise scale). We look forward to future news flow, confirming the roll-out is going to plan and - potentially - ‘sub contract wins’ also, as the contract may be extended beyond BP’s (320) owned sites, to dealer-owned sites and internationally also. N/c to forecasts.

Companies: Checkit

12 Feb 20

LIBERUM: Plus500* - Q4 stronger than thought

Q4 saw $100m of revenues ex customer P+L. The company will return 100% of 2019 profits to shareholders through dividends and buybacks, has $293m net cash, and may seek targeted acquisitions, new licences and product extensions.

Companies: Plus500

18 Feb 20

The Industrial Revelation

BHP could revise down estimates if "viral outbreak is not well contained" in Q1 20, HeidelbergCement sees positive demand in 2020, Kone withdraws from Thyssenkrupp bid

Companies: Rotork Somero Enterprises

12 Feb 20

Scapa Group

FY20 trading update – trading profit “significantly below expectations”

Companies: Scapa Group

11 Feb 20

Cenkos: Arena Events Group Plc -- Interim results

Despite the challenging market environment, Arena has delivered interim results that were broadly in line with our expectations (Adj EBITDA of £16.6m vs £17.0m forecasted). Cost saving initiatives are being implemented, which should support margins going forwards, whilst the company is expected to benefit from some significant contracts due for delivery in FY21E.

Companies: Arena Events

12 Feb 20

The Industrial Revelation

UK GDP in line with Dec construction beat but manufacturing miss, Japanese machine tool orders fall 36% y/y in Jan, Boeing nets no orders in Jan

Companies: HAYD HILS JHD OXIG RSW RNO SCPA TWD ZTF SOM GHH

12 Feb 20

LIBERUM: Premier Miton Group* - Net flow stabilisation should be a positive catalyst for the shares

Following a sharp rally in December 2019 many UK listed asset managers have continued to see small share price gains in 2020 with the sector up 4.0% year to date. However, we note that there has been a particular under-performance of Premier Miton’s shares, currently down 17.2% over the same period.

Companies: Premier Miton Group

17 Feb 20

CloudCall

New CRM partnership with Vincere

Companies: Cloudcall Group

17 Feb 20

WHI Morning Comment: Spectra Systems (SPSY)

Good entry point for great business Only marginally above levels last seen a year ago, we view shares in SPSY at the current price as representing an excellent entry point after coming off on profit taking. This was not, after all, an ordinary year for SPSY but an excellent one, characterised by upgrades, contract wins and most importantly, a significant collection of major opportunities which the company is working through and any of which has the ability to be a game changer for the business. To name a few among many: (1) potential further new work for a G7 central bank (existing client), (2) potential wins from a major Asian central bank, (3) major prospective polymer substrate contract, (4) tobacco smartphone authentication opportunities (TruBrand). As a provider of advanced technology solutions for banknote, product authentication, and secure lottery transactions, SPSY is a highly specialised producer of proprietary equipment, solutions and services, with high entry barriers to match. It is well-invested, hence the enhanced DPS in recent years; and the balance sheet is strong, with $11.1m of net cash (excluding $1.1m of restricted cash) reported with the most recent (H1) results, underpinning future growth expenditure. Importantly, our forecasts only encompass firm business prospects / established contracts. With TruBrand conducting tests in China (see above), this may have affected sentiment, but if so this is misconceived, since (a) this potential future revenue stream is immaterial or non-existent in our forecasts and (b) SPSY is not a one-trick pony – the pipeline is strong with other and major opportunities.

Companies: Spectra Systems

13 Feb 20

CMD flags strong near-term opportunities

We take the opportunity after last week’s Capital Markets Day to review key themes touched on by management, and the impact on likely future performance. Takeaways impacting organic growth are: 1) The speed at which migrations/ launches occur with Vanilla is faster than previously expected; 2) Video Content and Intent Marketing opportunities open up new streams; and 3) The Group has more potential to generate value from back catalogue content than previously thought. Organic Media sales growth of +3% in our FY’21E forecasts looks too prudent in view of these updates. We therefore upgrade organic Media growth forecasts to +10% y/y, with modest upgrades of +2% and +3% to FY’21E sales and EBITDA. FY’21E FCF yield is 6.8% (Sept y/e); A yield of 4% would generate an intrinsic value per share of >£20.

Companies: Future

11 Feb 20

S&U - Quick Take - Seemingly Unrelenting

S&U this morning released another solid trading update, this time covering the 2019 year-end period. The key highlights include the successful transition to the new Advantage CEO, an improvement in transaction levels for both businesses (including another record for Advantage), improvements in the Aspen repayments profile, and an increased second interim dividend, up 1p to 36p. We will reforecast at full year results on 24th March. In the meantime, management are optimistic for the coming year and have re-confirmed that FY20 results should be in line with their expectations.

Companies: S&U

17 Feb 20

The Industrial Revelation

Japanese Q4 19 GDP sees largest fall since 2014 following recent tax hikes, US industrial production fell due to warm weather and Boeing 737 Max issues

Companies: HTG OXIG RSW RNO SCPA ZTF SOM GHH

12 Feb 20

New supply and license agreements with New Wave

Building on its existing collaboration, Itaconix has extended its commercial relationship with New Wave, a leading North American detergent supplier. Itaconix has entered into a licensing agreement for a new dishwashing detergent formulation based on Itaconix’ TSI 322 detergent polymer, which was launched last month. Since the announcement of the original December 2018 license agreement (for a triple-chamber dishwashing detergent pod based on Itaconix CHT 122), New Wave has gained new accounts and grown its volumes for use in private label brands at retailers throughout North America. As well as adding the new detergent formulation, a new supply agreement provides New Wave with certainty on pricing and supply of up to 1m lbs of Itaconix polymers over the next two years.

Companies: Itaconix

13 Feb 20

Premier Oil

Schemes approved by debt holders

Companies: Premier Oil

18 Feb 20

FY19 confirmed the business model's solidity

FY19 results confirmed the predictability and toughness of Kerry’s business model. The same scenario continued: Taste & Nutrition remained solid, pushed up by healthy life style and acquisitions, while the Consumer Foods division is still challenging. We believe FY20 will stay the same way.

Companies: Kerry Group

18 Feb 20

Q4: new production continues to drive growth

The quarter’s results came in line with consensus and were driven by the start-up of FPSO#10 at Berbigão-Sururu. The CMD confirmed the commitment towards renewables, highlighted by the photovoltaic power projects acquired last month. Exploration & Production (now renamed Upstream) will nonetheless remain the central division, accounting for more than two-thirds of the group’s results, with meeting future production expectations the key risk for the stock.

Companies: Galp Energia SGPS

18 Feb 20

OptiBiotix Health agrees exclusive deal for LPLDL in USA and Canada

18 Feb 20

Agnico Eagle Mines - Record production and cash flow

Agnico Eagle’s FY19 results revealed production of 1.782Moz at a total cash cost of US$673/oz, compared with prior guidance of 1.77–1.78Moz at US$620–670/oz. Adjusted EPS for Q419 was US$0.37/share – almost exactly the same as Q319 – to result in FY19 adjusted EPS of US$1.01/share (Edison calculation). At the same time, the quarterly dividend was raised from US$0.175/share to US$0.20/share. However, despite the positive aspects of the results, production guidance for FY20 was lowered from 1.9–2.0Moz to 1.875Moz (a decline of 3.8% at the midpoint) and the shares sold off 15.6%, albeit we believe this reaction to have been overdone. Production guidance for FY21 and FY22 remained (effectively) unchanged.

Companies: Agnico Eagle Mines

18 Feb 20

Kavango Resources review KSZ drill results and discuss new copper JV

18 Feb 20

Kavango Resources team review KSZ drill results and discuss new copper JV

18 Feb 20

Size matters

ISP’s opportunistic take-over bid on UBI Banca has a strategic rationale, low execution risk and is being performed under interesting financial conditions.

Companies: Intesa Sanpaolo

18 Feb 20

Kodal Minerals CEO details Mali Lithium agreement and lodging of mining licence

18 Feb 20

Accelerated repositioning

The quarterly underlying performance came in line with expectations. The expected Coronavirus-related impairments and the temporary extra capital consumption look limited. The related revenue losses remain unknown but are expected to be progressively offset by organic growth. The announced acceleration in the group’s repositioning comes at the right time, confirming management’s confidence in Asia’s longer-term potential and enabling the group to improve its capital usage ahead of the implementation of Basel 3.

Companies: HSBC

18 Feb 20

Another steady quarter but conservative 2020 outlook

2019 ended on a steady note for Novo Nordisk. While Ozempic continues to do well, the addition of Rybelsus should further solidify the group’s non-insulin offerings. However, insulins – still c.46% of sales – continue to be a pain-point, especially in the US. Overall, there are no major growth drivers in the non-diabetes areas, which could limit the group’s ability to withstand another round of pricing-related uncertainty with US elections due later this year.

Companies: Novo Nordisk

18 Feb 20

Itaconix PLC: New Wave deals show there's 'plenty of channels to keep growing the business'

18 Feb 20

Q4/19 first read: Improved credit profile

Slightly higher cost level, but net profit boosted by financial investments Net letting at the highest level since Q4/17 Fixed meetings coming up according to Bloomberg article No major estimate changes expected

Companies: Corem Property Group Ab-A

18 Feb 20

Bidstack Group looking to capitalise on new wave of titles and tech to secure 'serious revenues'

18 Feb 20

Mosman Oil & Gas - Strategy and Production Update

18 Feb 20

Securities Trust of Scotland - High-conviction portfolio of quality companies

Securities Trust of Scotland (STS) aims to generate income and long-term capital growth through a bottom-up approach to investing in global equities. The manager, Mark Whitehead, focuses on quality companies with an ability to sustain dividend growth, to build a relatively concentrated portfolio of 35–55 high-conviction stocks. In his view, this approach is naturally aligned with selecting companies that score highly on ESG issues. Since Whitehead’s appointment, and the adoption of the mandate, STS has delivered an annualised NAV total return of 12.9% and increased demand for its shares the valuation from trading at a persistent discount to trading at a premium to NAV.

Companies: Securities Trust Of Scotland