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05 Jun 20

Fundraise of £48m – pursuing multiple opportunities

Avacta has conditionally raised £45m net to (i) accelerate the expansion of its therapeutics pipeline, given recent pre-clinical data for both its pre|CISION and TMAC drug conjugate platforms, and (ii) provide the necessary working capital to fund the development and deployment of a COVID-19 antigen test in the summer of 2020 as well as scale its broader diagnostics business more rapidly. These funds will also generate first-in-man data (safety and tolerability) for the Affimer platform, which will significantly de-risk the platform in the eyes of potential pharma partners, accelerate its partnership model and substantially increase future deal values. We leave our target price under review, although using a SOTP analysis, it is easy to generate a valuation that is substantially in excess of the current market capitalisation.

Companies: Avacta Group

01 Jun 20

Dart Group*

Sale of Fowler Welch

Companies: Dart Group

01 Jun 20

LIBERUM: AFH Financial Group* - Performing well despite COVID-19

AFH interim results have shown resilience in a tough period. Revenues grew by 5% yoy and Adj. EPS is up 8% yoy. We reduce our FY20 EPS forecast by 8% to reflect the wider market falls and slower new business due to the lockdown. This reduction in earnings is significantly less than peers, highlighting the defensive nature of the business and the prudent temporary cost measures being introduced in FY20. The improved FCF of the business should lead to a re-rating, particularly as AFH now trades on 9.3x CY20 P/E, a significant discount to peers. Our reduced target price of 524p implies 81% upside. Re-iterate BUY.

Companies: AFH Financial Group

02 Jun 20

Priming for strong growth

Final results for the year to March are in line with the April trading update, which had been well ahead of expectations in profit and cashflow: with some customer orders postponed beyond year end, revenue of £10.4m had been 6% behind expectations while adjusted PBT (£0.8m) and free cashflow (£1.0m) were respectively 499% and 227% ahead. Strong cost control still permitted £2.8m (FY19: £2.9m) of R&D, leading to the continuing development of the global large enterprise products, but also of MyID Professional, simplifying the solution and expanding the addressable market. With cost control clearly in hand, and even confidence in cost expansion after two years of restraint, the group is driving opportunities for high-margin revenue growth and the future continues to brighten. Target 80p reiterated, with the chance for TP review with greater COVID-19 clarity at interims in December.

Companies: Intercede Group

05 Jun 20

Proposed equity fundraising and move to AIM

New management has put in place a strategy which the February interim results revealed was returning the group to growth with very encouraging LFL statistics and attractive returns on refurbished outlets. In March, however, in response to COVID-19 and following UK Government guidelines, all venues had to be closed. Management initiatives have materially reduced the cash burn while the group is unable to trade, and the group’s lender has been very supportive in significantly increasing the borrowing facility. Management is now proposing an equity issue, the rationale for which is to strengthen the leverage ratio to create a more appropriate capital structure moving forward, to allow an immediate return to the estate refurbishment programme and to be able to potentially take advantage of strategic opportunities as they arise as the sector emerges from the COVID-19 crisis.

Companies: Revolution Bars Group

01 Jun 20

LIBERUM: Codemasters* - New licence increases game release cycle

Codemasters has announced that it has signed a licence agreement for the exclusive rights to develop and publish the FIA World Rally Championship videogames and Esports tournaments. The initial 5 year annual series will be out from 2023, with the agreement ensuring a step-up in the release cycle of Codemasters’ off-road games to three games over two years rather than the current one per year. The major success of F1 highlights the potential of combining another global racing license with the company’s gaming expertise. This news, following the F1 contract extension with Liberty Media, the deal with NetEase in mobile, and the acquisition of SMS, adds to the visible growth profile of the business and increasingly underlines Codemasters’ position as the leading car racing platform in the gaming sector.

Companies: Codemasters

03 Jun 20

Cenkos: InfraStrata Plc -- A Titanic Opportunity

InfraStrata's acquisition of the iconic Harland & Wolff (H&W) shipyards in Northern Ireland has been transformational for the group, and with a carefully planned growth strategy, there is a clear route to cash breakeven in the short term. Over the medium to long term, these facilities could support a c£400m revenue business. With the company trading at a c30% discount to its H1/20A book value and c65% to its Adj NAV, we initiate with a Buy recommendation.

Companies: Infrastrata

01 Jun 20

The Monthly June 2020

Much has been written about the effects of the virus on the world and on the stock market. Here is one analyst’s take on some of the likely impacts on the way we should look at companies. This article was originally produced as a blog, “10 Changes Post Virus”, which was published a few weeks ago.

Companies: AGY ARBB ARIX DNL GDR NSF PCA PIN PHNX PHP RE/ RECI STX SCE SIXH TRX SHED VTA

04 Jun 20

Codemasters

Project Cars 3 release date confirmed for summer

Companies: Codemasters

03 Jun 20

COVID-19 – UK rapid test consortium update

Further to the announcement on 9 April of Omega’s participation in a UK Rapid Test Consortium (UK-RTC), a point-of-care COVID-19 antibody test programme, the UK-RTC confirmed today that it is on track to reach a design freeze in June, following early results from 66 samples, which indicated the test to be in line with design requirements. Omega stands ready to mobilise both people and facilities at Alva, Scotland, to produce tests for the consortium. We are leaving our base forecast unchanged (reflects the non-COVID business only), but placing target price under review given the difficulty of forecasting potential COVID-19 related sales with any degree of accuracy.

Companies: Omega Diagnostics Group

01 Jun 20

Codemasters

New franchise win: World Rally Championship

Companies: Codemasters

04 Jun 20

Pulling ahead

After completing six acquisitions over the last two years, CentralNic has diversified its market exposure and significantly improved its competitive position. In this report we provide an update of the company’s markets and its competitiveness within each market. We conclude that CentralNic’s increased scale and broadened market exposure puts it in a strong position to consolidate the market and deliver further synergies to investors. We provide our estimates for H1 2020.

Companies: Centralnic Group

03 Jun 20

Putting fears to rest

Burford has announced its results for 2019. As previously indicated, these were lower than in the previous year. Revenue fell 17% from $430m in 2018 to $357m. Profit after tax, on Burford’s basis, declined 31% from $329m to $226m. As announced earlier, there will be no final dividend so only the interim dividend of ¢4.17 was paid for FY19. Unusually, Burford has also released a trading update for early 2020 alongside its main figures. Court results and arbitral awards have been obtained that would generate some healthy profits. Most notable is $200m in income ($300m in cash receipts) regarding which further legal review is unlikely.

Companies: Burford Capital

01 Jun 20

CloudCall

AGM statement as expected; Resume with a Buy

Companies: Cloudcall Group

03 Jun 20

Resilient model proving its worth

Instem’s audited FY19 results showed strong double-digit organic growth, with an ongoing transition to SaaS (now 25% of group revenues) and strong growth from SEND services and the Informatics offering. Given the current backdrop, we have moderated our assumptions around new business wins offset partially by lower discretionary expenditure. The net PBT impact is ~£0.5m this year and next, which in our opinion is relatively minor in the grand scheme of things. The fundamental point remains that Instem is a market leader in its field with high barriers to entry. It has a robust, resilient model, multiple secular growth drivers and a solid strategic and financial position. The balance sheet remains strong with substantial net cash.

Companies: Instem

05 Jun 20

Xpediator PLC's CFO Robert Ross and COO of Logistics Romania to step up as joint CEOs

05 Jun 20

Esports betting firm Luckbox to list on the TSX Venture Exchange

05 Jun 20

Oncimmune CEO says they're seeing 'significant interest' in its EarlyCDT products post-COVID

05 Jun 20

BlueRock Diamonds reports production averaging at close to 2,000 tons per day

05 Jun 20

Morning Report: FTSE 100 on the up as airline stocks surge higher

05 Jun 20

Andy Brough, Schroders: Edison’s bull/bear game

05 Jun 20

'Another upward run in the gold price isn't out of the question' says Mining Capital's Alastair Ford

05 Jun 20

Oil & Gas Daily Flow

Premier Oil (PMO LN): New terms agreed with BP, ACRM fully supportive

Companies: Premier Oil

05 Jun 20

SP Angel . Morning View

Bushveld Minerals* (BMN LN) – Vanadium prices take off on news of strong demand from China | Caledonia Mining* (CMCL LN) – De-listing from TSX | Shanta Gold (SHG LN) – Gold recoveries to add 1pp by year end | SolGold* (SOLG LN) – £26m fundraising | Trans-Siberian Gold (TSG LN) – Refinancing increases the revolving credit line capacity and secures lower rates

Companies: bmn SHG SOLG TSG

05 Jun 20

Fundraise of £48m – pursuing multiple opportunities

Companies: Avacta Group

05 Jun 20

Schroders - executive interview with Andy Brough

05 Jun 20

Proposed equity fundraising and move to AIM

Companies: Revolution Bars Group

05 Jun 20

Merger in Pakistan according to media article

Media article about a merger between Telenor Pakistan and Ufone We think it is more likely that Telenor will target M&A deals in Asia M&A optionality remains, supported by recent CFO change in our view We believe Covid-19 impact on Asia is reflected in estimates

Companies: TELENOR

05 Jun 20

Emmerson PLC's Khemisset potash project outshines its peer group as shown in feasibility study

05 Jun 20

Auctus on Friday - 05/06/2020

PetroTal (PTAL LN/TAL CN)C: Update in Peru - Based on discussions with Petroperu, PetroTal expects that in July 2020, the oil sales pipeline will re-open allowing for Bretana oil field operations to recommence. As a result of the recent recovery in oil prices, the Company estimates that the contingent liability has decreased from US$42 mm to approximately US$35 mm as of May 28, 2020. The Company is in discussions to facilitate an arrangement whereby the contingent liability, when crystallized, will be settled over a three-year period from future cash flow. Gran Tierra Energy (GTE LN/CN/US): Corporate update | Maha Energy (MAHA-A SS): Production update in Brazil | President Energy (PPC LN): Placing and conversion of debt into equity | Trinity Exploration and Production (TRIN LN): Finance update | Great Eastern Energy Corporation: FY results for the year ending 31/03/2020 | Getech Group (GTC LN): FY19 results | Premier Oil (PMO LN): More attractive terms for the acquisition price for BP assets in the North Sea reduced and agreement with creditors | UK Oil & Gas (UKOG LN): Equity placing | United Oil & Gas (UOG LN): Well results in Egypt | Canadian Overseas (COPL LN): Agreement with Essar E&P in Nigeria

Companies: GTC PMO SLG