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19 Jun 18

Post results update

We reassess our forecasts below, no significant changes to the P&L and the company produced a strong start to FY18e where revenue in the 1Q18 was +60% YoY to €4.8m, maiden dividend of 0.25p proposed. AGM in July should provide detail on timing of dividend.

Companies: Veltyco Group

13 Jun 18

Now’s the time

Amerisur is an E&P operating onshore Columbia. The company has high margin production from its Platanillo field and Mariposa-1 well supported by ownership of the OBA pipeline, which connects Platanillo into the Ecuadorian pipeline system. A new up-to-14 well drilling programme is about to begin, providing newsflow and a route to 20mbbl/d. Buy, 30p target (from 25p).

Companies: Amerisur Resources

13 Jun 18

Profit dynamics bolstered by gross margin strength

Sales grew 53% in Q1 despite slower Boohoo growth, and gross margin smashed consensus expectations. This increases flexibility to reinvest and drive future growth and upgrades. Boohoo’s growth should pick up via overseas expansion, improved customer frequency and easier comps. We have raised FY19 EPS by 4% but growth assumptions in H2 and outer years still look prudent. To reflect confidence in the growth and future profit dynamics we lift our target price to 250p (225p). If PLT’s DC move is executed well, and Boohoo growth rebuilds back to c20%, we would expect the share price to test new highs. Interims in September will better inform us on these dynamics. Sustainable growth, attractive EBITDA margins and strong cashflow, helped by a sector-leading working capital surplus, means we stay at BUY.

Companies: Boohoo.Com

19 Jun 18

LIBERUM: Footasylum* - A high growth story pushed out one year; doing all the right things

Footasylum is investing for growth in areas where there is a more predictable rate of return. The focus on more store upsizes is sensible as this aligns its strategy with the brands it retails but should also ensure a more predictable payback on capital spend.

Companies: Footasylum

14 Jun 18

Results in line/ 20% FCF yield forecast

R1 has reported FY results for the year to March to 2018, and they are in line with the April 19th trading statement, although cash at $27m was $1m better, as the working capital build in H1 more than unwound. FCF yield of 17% for 2019E and 20% for 2020E. Retain Buy Pt 770p

Companies: Rhythmone

12 Jun 18

53% group growth delivered in Q1, trading in line with FY expectations

boohoo.com has delivered solid Q1 Group revenue growth of 53% to £183.6m, with standout like-for-like growth of 158% delivered by PLT. At a Group level, the UK saw strong growth of 49%, while international sales were up 60%. Group gross margins increased 100bps to 55.2%, reversing the downward trend seen over the last few years, driven by strong full-price sales performance in PLT. The boohoo brand delivered growth of 12%, however we flag this is versus a tough comp of 48% growth in Q118, with increased sales and promotional activity early in the quarter causing a reduction in gross margin to 52.0% from 53.9%. Promotional activity has since slowed, and the GM exit rate actually was up YoY, giving scope for the business to implement growth measures which should boost growth rates as the comps get easier.

Companies: Boohoo.Com

04 Jun 18

The Monthly

Hardman & Co recently welcomed Milan Radia to our roster of established, industry expert analysts. Milan has 25 years of equity market experience at major investment banks and in asset management, and has worked on many high-profile successful IPOs. In 2017, he was ranked the No.1 earnings estimator in the UK for his sector in the Thomson Starmine Awards. Milan has also been techMARK Analyst of the Year and achieved top three Institutional Investor sector rankings for his coverage of the software and telecoms sectors. In our lead article this month he gives an insight into his thinking on some key themes in the sector.

Companies: OPM ABZA AVO AGY APH ARBB AVCT BNO BUR CMH CLIG COS DNL EVG GTLY GDR INL KOOV MCL MUR NSF OXB NIPT PHP RE/ REDX SCLP SCE SIXH TRX TON VAL

13 Jun 18

Business looking strong for FY’19… despite IFRS 15

Eckoh’s full year results to March’19 are in-line, as flagged at the May trading update. US Secure Payments continues to lead the way, driving 32% underlying growth in the US division. The UK is returning to form after a weak H1’18, with strong momentum going into the current year. We are making small underlying upgrades to our FY’19 forecasts, however the picture is complicated by the non-cash impact of adopting IFRS 15. Adoption of the new standards is expected to result in a delay in revenue recognition, meaning a material reduction in P&L profitability in the near term. We continue to be excited about the group’s growth prospects, which combined with the high level of recurring revenue makes the shares fundamentally attractive.

Companies: Eckoh

19 Jun 18

Unveiling Kape

Kape has made solid progress in refining its product set and is now fully focused on the consumer cyber security segment. By leveraging its marketing platform to scale new products while also transitioning to a subscription model, we expect to see strong revenue growth and margin expansion translating to our forecast 16% three year CAGR in EPS. With $69.5m net cash, acquisitions should enhance this further. We believe the shares should be on a growth rating yet despite the recent performance, the 21.8x FY18 P/E is below peers. We see upside towards 157p.

Companies: Kape Technologies

19 Jun 18

InnovaDerma

The trading update for the year ending June indicates revenues and pre-tax profit of c.£11m and £0.65m, respectively. This is lower than previously indicated (c.£1m), which is mainly due to supply chain issues and launch-related costs in H2. The decision by Boots to range Roots in 359 of its 2,500 stores in the UK and expansion into almost all Superdrug stores, however, is a strong endorsement of the company’s ability to create well-recognised beauty brands and gives us increased confidence in the growth dynamics for this perennial brand. We reintroduce new forecasts and a target price of 220p

Companies: Innovaderma

12 Jun 18

LIBERUM: Frontier Developments* - Strong outlook across 3 franchises

The trading update for the FY to May'18 shows revenues and profits ahead of our forecast with strong performances from both Elite Dangerous and Planet Coaster. This highlights the success of Management's multi-year franchise strategy as a games developer and self-publisher.

Companies: Frontier Developments

11 Jun 18

Enhanced EPS returns at current strip

The development of Hurricane’s Lancaster early production system (EPS) remains on track for H119 first oil. We estimate a 1 January 2018 point-forward IRR of 63% for the EPS phase based on current commodity price forecasts. We use the EIA’s short-term oil forecast with Brent at $66/bbl for 2019 and long-term $70/bbl (from 2022). We believe the market is fully valuing a 10-year Lancaster EPS phase (34.7p/share net of debt), a project that has the potential to significantly de-risk our RENAV of 81.0p/share (increased from 78.4p/share). Our RENAV includes a risked value for Lancaster full field development and two mid-sized field developments (250mmbo) at Lincoln and Halifax.

Companies: Hurricane Energy

19 Jun 18

Volatility returns

When we last published the FTSE 100 was reaching an all-time high of 7877. We have subsequently seen increased volatility and some of the previous progress made by markets surrendered. The escalation of the potential trade war between the US and China and the imposition of more tariffs has unnerved markets. At home, we have continued to see M&A activity. While company results have largely been as anticipated, the outlook in some sectors looks less promising. In Share News & Views, we comment on Aortech*, ECSC*, Location Sciences*, Norcros, NWF, Tricorn* and Warpaint London*.

Companies: AOR APC BMS CRPR DMTR ECSC ESC EUSP FDM GETB LSAI SNX SPRP TCN W7L

12 Jun 18

Prelims – setting the quality standard

iomart has delivered prelims in line with the trading update and unchanged expectations for the year to March 2018. The predictability of the high level of recurring revenue (and nature of the difficulty in growing, or even losing, such revenues quickly) means consensus is tight and delivery is at consensus: revenue of £97.7m was within 1% of consensus as it stood before the trading update; EBITDA delivery of £39.8m is also within 1%. iomart has, typically, added to underlying organic growth (7% in FY18; FY17: c.7%) with three acquisitions in the year, albeit none in the second half. The balance sheet remains strong and the group has an increased £80m debt facility, offering continuing strategic choices including further acquisitions. The board has made the decision to accelerate dividend growth to 20% (vs 15%E) to hit the 40% payout ratio early, with the promise to reconsider the parameters of the policy. iomart continues to show private equity and public peers how to do it: target lifted to 450p, equivalent to 10.5x FY20 EV/EBITDA and still delivering a 5.2% free cash flow yield, ahead of the market.

Companies: Iomart Group

14 Jun 18

Positive corporate and premium pricing newsflow

The proposed acquisition of easyGym stacks up strategically and financially. It further reinforces the Groups roll-out and consolidation led growth model and strengthens its position in the value segment. Current trading is strong with positive commentary around the premium pricing initiative. We will publish formal forecasts in due course but our preliminary analysis suggest 9%/8% EPS accretion in FY19/FY20. Premium pricing success should add at least a further 5% to these estimates, implying a look through FY19 P/E of 18.5x vs a 3 year EPS CAGR >30%. We lift our 12m TP to 335p – Buy.

Companies: Gym Group

20 Jun 18

Weak Q1 results

It was a weak quarter for Kingfisher, even after adjusting for the unfavourable weather impact. While the UK remains fragile in the near term, France is likely to sail into the black going forward. The turnaround plan remains on track (with future targets intact), and the stock remains well-placed to benefit from any positive development on the macro-economic / DIY front. We have tweaked our estimates but maintain the stock recommendation.

Companies: Kingfisher

20 Jun 18

News of the strategy update

Today is DSM’s investors’ day and it has published the new financial targets for the 2019-21 period. Furthermore, the company is evolving into a Nutrition, Health and Sustainable Living company but still running two divisions.

Companies: Koninklijke DSM

20 Jun 18

Record - Maintaining client commitment

Record is in its 35th year and underlying its longevity are expertise and service levels that have sustained a client base through changing markets. FY18 saw further investment in personnel to support customised services, while a new product offering in passive hedging has the potential to earn performance fees that we have not included in our estimates. Similarly, positive net AUME flows could allow earnings to beat our expectations.

Companies: Record

20 Jun 18

The Canadian issue

The press has reported that K+S’s production at the Bethune site has stood still for four days due to technical issues. Management expects some impact on the Q2 figures, but remains confident of its FY guidance.

Companies: K&S

20 Jun 18

Blue Cap - Locking in growth

Blue Cap is gearing up for further expansion by joining forces with like-minded counterpart, PartnerFonds, its new major shareholder (44%) and planned merger partner. Meanwhile it continues to please, both in terms of trading and its eye for transformative investment. H217 delivered strong momentum, notably at reinvigorated Neschen, with EBITDA up by a quarter (likely doubling y-o-y, as in H1, but for sale of Biolink). For 2018, guidance of progress across the board is complemented by the largest purchase to date (Knauer-Uniplast) and associated turnaround potential. Dividend initiation despite continued investment marks Blue Cap’s success.

Companies: Blue Cap

20 Jun 18

121 Mining, New York - Cora Gold - Vox Pops

20 Jun 18

121 Mining, New York - Phoenix Global Mining - Vox Pops

20 Jun 18

Block Energy - Market Open

20 Jun 18

Grand Vision Media - Welcome Ceremony

20 Jun 18

LIBERUM: Mears* - Reassuring statement with more colour from the Housing Seminar

Trading statement guides to in line, and we expect normal H1 weighting. Restructuring should save money and improve efficiency and bidding.

Companies: Mears Group

20 Jun 18

Placing underscores confidence in recovery

The electrical testing and oil & gas equipment services group has raised £2.5m in a placing to its institutional investors to invest in oil field rental tools and working capital, as well as an outstanding deferred consideration payment. We see this as a sign of increasing confidence in O&G recovery prospects, with the CEO among those subscribing for shares. We have not made changes to our P&L estimates, other than to reduce losses per share, but have reduced our net debt forecasts.

Companies: Northbridge Industrial Services

20 Jun 18

Another downgrade

Further UK market weakness has resulted in another profit downgrade and Debenhams (DEB) moving more overtly into a defensive mode. Our 8/18 PBT forecast (pre-exceptionals) has been reduced by 29% to £34m. The company expects to be able to grow profit from its guided 8/18 level of £35-40m. But there is clearly above average uncertainty attaching to its forecasting because of its record in these matters and macro.

Companies: Debenhams

20 Jun 18

VSA Morning Alt Energy Comment

redT energy (RED LN)# , a developer of vanadium redox flow machines for large-scale energy storage infrastructure applications, has announced the formal launch of its third generation flow machine (Gen3) at the eeS Europe energy storage event in Munich.

Companies: Redt Energy

20 Jun 18

AGM upgrade driven by Bulgin

Elektron Technology’s AGM update has revealed a strong start to the year, with performance ahead of expectations. This has been driven by Bulgin, which is trading strongly across all territories. Management now expects Bulgin to report H1 19 sales of at least £13.5m (up c.8%) and anticipates modest sales growth for the business for FY19, despite a tough H2 comparative. Meanwhile Checkit continues to make good progress in driving adoption of its real-time operations management and monitoring solution, and Elektron Eye Technology is trading in line with expectations. We have increased our forecasts for Bulgin in line with updated guidance, driving an upgrade to adjusted group PBT and EPS of 20% for FY19, followed by 5% for FY20.

Companies: Elektron Technology

20 Jun 18

Morning Song

Elektron Technology (EKT LN) AGM upgrade driven by Bulgin | mporium Group (MPM LN) IMPACT used by Performics for Samsung S9 launch | NCC Group (NCC LN) CFO stepping down | Severfield (SFR LN) FY18 in line; special divi announced; outlook supported by order book

Companies: EKT MPM NCC SFR