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  • 06 Aug 20
Cenkos: Duke Royalty Ltd -- Restoring the royalties

Trading in the royalty partner portfolio over Q1/21 shows a material rebound from May, which has been sustained to date, as the portfolio as a whole returns to more normalised trading. Consequently, Duke's cash receipts, while down 20% YoY currently, are set to step up in H2/21 as forbearance measures largely expire and deferred royalties realised. This bodes well for a rebound in earnings and a return to cash paid dividends. A share price down over 55% since Feb 20, standing at p/book of 0.56x H1/20A's NAV p/s thus appears overdone. We await further clarity on the portfolio before reissuing forecasts, thus leave our recommendation U/R.

Companies: Duke Royalty
  • 04 Aug 20
Games Workshop Group - Winning performance

Games Workshop’s (GAW) FY20 results show that demand post lockdown, during which the company initially suspended all trading, has surprised on the upside, leading to a greater profit outturn than recently anticipated by management. Management is aiming to grow revenue in FY21e, while maintaining the operating margin given a focus on leveraging Online (19% of group revenue) as the economic environment will likely lead to lower growth for Trade (52% of group) and a decline in Retail (29% of group) revenue. Our new forecasts for FY21e are for revenue to increase by 2.1% and PBT to decline by 5% due to lower royalty income.

Companies: Games Workshop 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.
  • 05 Aug 20
First UK order for Primestore MTM device

EKF has secured its first order in the UK for the Primestore MTM sample collection device, worth £3m over the next 7 weeks. The purchaser is a partner from the private sector, with the device being used in a Covid-19 testing programme for UK staff. With these increasing orders, EKF has expanded its production line in Cardiff and now has capacity for 25,000 sample collection tubes per day. In addition, the production line in Germany is now up and running. We increase our FY20 revenue estimates by a further £3m and EBITDA by £2m. Given the nature of the device, which is agnostic over which molecular test is used, we expect demand to continue at elevated levels for the duration of the pandemic and continue to see further upside potential to our already materially upgraded estimates. EKF remains one of our best Ideas for 2020.

Companies: EKF Diagnostics Holdings Plc
  • 03 Aug 20
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
  • 05 Aug 20
Low interest rates wipe out operating resilience

L&G reported an operating profit from continuing divisions (excluding Mature Savings and General Insurance businesses) of £1,128m, -2.2% yoy. The COVID-19-related cost was £129m. LGR posted a growing operating profit to £721m. Net profit amounted to £290m vs. £874m a year before, being affected by the reduced discount rate used to calculate LGI reserves. The Solvency II ratio stood at 173%. The Board recommended an interim dividend of 4.93p/share, stable relative to H1 19.

Companies: Legal

  • 06 Aug 20
Teams spirit

LoopUp recently unveiled a major extension to its ambitions – the group is aiming to become a leading global provider of telephony “inside” Microsoft’s Teams product. The opportunity is clear and growing, as enterprise customers look to use Teams for “normal” external phone calls, and LoopUp seems well placed to deliver a differentiated offering using its existing infrastructure and knowhow. In this document we provide an overview of the new platform and explain its strategic significance.

Companies: LoopUp Group plc
  • 07 Aug 20
Velocys

2019 has been a transformative year for Velocys, setting the company up for further progress in the current year and beyond. Despite COVID 19 restrictions the company has continued to develop with the current year seeing further funding secured, the delivery of reactors to Red Rock Biofuels and the securing of planning permission at the Altalto sustainable aviation fuel project. The JDA at Altalto has also been strengthened with British Airways and Shell providing a further £1m funding. Demand for sustainable fuel, especially for aviation, and for negative carbon solutions is growing and Velocys is one of the few companies able to deliver here.

Companies: Velocys Plc
  • 03 Aug 20
Rebound post lockdown

What’s new: Purplebricks Group results for the year to 30 April 2020, show the Australian and US units as discontinued; but include the Canadian unit sold for C$60.5m (i.e. £35m) in July. Investors will focus on the UK unit which revealed:  11% fall in UK revenue to £80.5m (FY19: £90.1m), as the number of instructions fell 23% (impacted by early Covid uncertainty and lockdown), but the average revenue per instruction “ARPI” rose 12% to £1,394;  UK gross profit margin improved to 64.1% (FY19: 63.0%);  UK marketing costs to revenue improved to 25.6% (FY19: 29.6%);  Spend on Digital capacity pushed UK operating costs 32% to £26.2m (FY19: £19.9m), as new management team pursued initiatives which are being “delivered at pace with significant opportunity for further innovation.”  UK adjusted EBITDA fell 53% to £4.8m (FY19: £10.2m).

Companies: Purplebricks Group Plc
  • 03 Aug 20
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
  • 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
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
  • 03 Aug 20
THE MONTHLY August 2020

For this Monthly, we are delighted that Rooney Nimmo and 24Haymarket have allowed us to reproduce a recent report they jointly published, entitled An analysis of UK exits (2015-2019), which provides a granular analysis by sector of the activity in our dynamic private companies world. We hope you find the insights of interest.

Companies: AVO AGY ARBB ARIX CLIG ICGT NSF PCA PIN PXC PHP RECI SCE TRX SHED VTA

  • 06 Aug 20
Hurricane Energy - Technical review and operational update

Technical review and operational update

Companies: Hurricane Energy Plc
  • 03 Aug 20
Velocys

The successful delivery of reactors to the Red Rock Biofuels project demonstrates the company’s ability to manufacture to specification and on time in our view. Progress on this project represents a key milestone and, with commissioning expected next year, will provide further evidence of the ability to create sustainable road and aviation fuel from biomass using Velocys technology.

Companies: Velocys Plc
  • 10 Aug 20
Milking the COVID-19 opportunities

Hikma’s H1 20 top-line acceleration was driven by COVID-19-related demand in Injectables and Generics and the economic recovery in Algeria propelled growth in the Branded segment. Combined with a favourable product-mix, the operating margin was up 1.5ppt. In the near term, new launches across segments should provide some respite against the ongoing pricing pressure. Given the company’s thin R&D pipeline and a robust balance sheet, M&A (probably in the biosimilars space) seems on the cards.

Companies: Hikma Pharmaceuticals Plc
  • 10 Aug 20
Open Orphan: World-leading expertise drives growth

Open Orphan (LON:ORPH) has rapidly restructured and integrated its Venn and hVIVO subsidiaries, and is delivering on its growth strategy by maximising its specialist capabilities and is converting a pipeline with an estimated value of over £100mln, to deliver long-term, profitable contracts. This w

Companies: Open Orphan Plc
  • 10 Aug 20
Group earnings sunk by VW's H1 loss

Given that VW posted a €1bn net loss in H1 due to the COVID-19-led crisis, Porsche SE’s figures also swung to the red. Likewise, the FY20 outlook for the holding company remains uncertain, although net liquidity is expected stay at an appropriate level.

Companies: Porsche Automobil Holding SE
  • 10 Aug 20
The Biotech Growth Trust - Firing on all cylinders

The Biotech Growth Trust (BIOG) is managed by Geoff Hsu, who is able to draw on the considerable resources of specialist healthcare investor OrbiMed Capital. While biotech stocks have rallied strongly following the coronavirus-led stock market sell-off earlier in 2020, the manager believes they could have further to go. He is confident that a successful COVID-19 vaccine will be developed and positive fundamentals are supportive for the biotech sector’s future performance. Repositioning of BIOG’s portfolio during FY20 has been accretive to the trust’s returns in recent quarters; it has now outperformed its benchmark NASDAQ Biotechnology index over the past one, three, five and 10 years, and investors have also enjoyed very solid absolute total returns of more than 20% pa over the past decade.

Companies: The Biotech Growth Trust
  • 10 Aug 20
World High Life - Proactive One2One Virtual Event
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  • 10 Aug 20
Diversified Gas & Oil hikes dividend 7% and is well placed to capitalise on 'compelling new deals'
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  • 10 Aug 20
Diversified Gas & Oil hikes dividend 7% and is 'well placed to capitalise on compelling new deals'
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  • 10 Aug 20
Weak H1; more pain awaits in H2 FY20

Aggreko’s soft H1 FY20 performance was primarily infected by the COVID-19 pandemic during the last few months. But, as the virus continues to roam around freely and oil prices are unlikely to regain lost ground, the seasonally more important H2 FY20 is expected to be much more painful for the company. Amidst the challenging environment, management anticipates FY20 PBT to decline by at least 50% yoy and a higher tax rate to make matters worse.

Companies: Aggreko Plc
  • 10 Aug 20
CentralNic Group - Strong growth, but lower Q2 margins

In its trading update, management indicated that it expects H120 revenues in excess of US$110m, with adjusted EBITDA of at least US$15m. Cash increased to US$27.6m at 30 June 2020, while net debt fell marginally to US$76.4m. This would indicate relatively strong Q2 revenues of US$53.6m (Q1: US$56.4m), but a fall in Q2 adjusted EBITDA to US$6.9m (Q1: US$8.1m), meaning lower Q2 margins of 12.9% (Q1: 14.4%). On this basis, revenues would be c 11% ahead of our H120 estimates (US$99.1m), but EBITDA only c 2.7% ahead (US$14.6m) with H120 margins of 13.6% vs our estimate of 14.7%. At this stage, with limited visibility on the performance of the underlying businesses and with no forward guidance, we intend to leave our forecasts unchanged, pending review after the interim results on 1 September 2020.

Companies: CentralNic Group Plc
  • 10 Aug 20
Shield Therapeutics: Analysis of data from AEGIS-H2H is strongly supportive of ongoing discussions
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  • 10 Aug 20
MBH Corporation's Callum Laing on how investors can overcome a lack of track record
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  • 10 Aug 20
Shield Therapeutics CEO says reanalysis of key study has shown Feraccru to be 'credible alternative'
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  • 10 Aug 20
Open Orphan: New deal with top-three pharma company is 'evidence validation is building'
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  • 10 Aug 20
Lindsell Train – fund manager interview with Nick Train
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  • 10 Aug 20
Shield Therapeutics: A strong commercial profile in iron deficiency treatment

Shield Therapeutics (LON:STX) has provided further conclusions from its analysis of data from the AEGIS-H2H study comparing the company’s oral iron replacement treatment Feraccru to intravenous (IV) iron. The outcomes of the analysis are strongly supportive of ongoing discussions for the global com

Companies: Shield Therapeutics Plc
  • 19 May 17
Leading UK fund manager, Gervais Williams, discusses investing, his outlook and two companies he's excited about
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  • 30 Jan 20
Equals Group PLC chief 'phenomenally bullish' about prospects as revenues rise 20%
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  • 21 Oct 19
Avacta Group PLC boss sees a huge opportunity with new version of cancer treatment
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  • 09 Oct 18
Arena Events Group plc Investor Overview
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  • 16 Jul 20
Omega Diagnostics to expand manufacturing capacity as it scales up coronavirus test development
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  • 05 Aug 20
FastForward Innovations CEO says granting of licence for Leap Gaming is huge news
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  • 18 Nov 19
CentralNic's acquisition of Team Internet to be 'significantly earnings enhancing'
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  • 06 Feb 20
Morning Report: Touchstone Exploration confirms potential of its Cacadura-1 well
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  • 23 Jan 20
Executive interview - Sureserve
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  • 16 Jan 20
Greatland Gold - Outlook for 2020
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  • 21 Mar 18
Bitesize briefing – Vermillion Energy
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  • 07 Jan 20
Volex PLC Investor Presentatiion
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  • 14 Apr 16
Executive Interview - Martin Aircraft Company
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  • 23 Nov 16
Armadale Capital - Full assay results confirm exceptional high-grade graphite deposit
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  • 02 Dec 19
Investor Update: Hurricane Energy makes another discovery with Warwick West well
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