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19 Nov 20

Somero Enterprises - Positive update – trading ahead of expectations

The group has released a positive trading update, signalling a strong H2 and performance ahead of expectations. The new guidance points to a 6.7% upgrade to revenues and a 10.5% upgrade to EBITDA. Cash generation has been notably strong, at about $26m, which will drive an increase in supplemental dividends with a dividend yield of 7.1%. We raise our TP from 255p to 285p, based on a target P/E of 14x, giving decent upside to the current 11.6x.

Companies: Somero Enterprises, Inc.

20 Nov 20

Cenkos: Venture Life Group Plc -- Maintaining the momentum

Venture Life has developed significant momentum through 2020, reflected in the strong share performance over the year. Building on this momentum, the company has announced it is conditionally raising £34m via an equity raise to help it secure additional M&A opportunities. At this time, Venture Life has identified three opportunities, which we estimate could deliver significant earnings accretion if all are completed. We have updated our forecasts to reflect the raise but at this time have left our underlying assumptions unchanged. We expect Venture Life to maintain the momentum it has developed, supported by the proposed raise and M&A opportunities; we re-iterate our Buy recommendation.

Companies: Venture Life Group Plc

23 Nov 20

Rude Health - finnCap Life Sciences quarterly sector note

Oxford University and AstraZeneca announced the first interim analysis from the Phase III study of its COVID-19 vaccine candidate, which was found to be 70% effective in preventing COVID-19. This follows similar announcements from Moderna, and Pfizer/BioNTech in the previous two weeks, and the caveats we mentioned at the time remain the same. While all of these results have been highly encouraging, we reiterate that they do not diminish the urgent need for COVID-19 treatments and testing, which will be required for years to come. We consider Synairgen, Avacta, genedrive, Omega Diagnostics and Open Orphan to offer good buying opportunities.

Companies: AVCT ODX SNG GDR ORPH

25 Nov 20

D4T4 Solutions - Switch to recurring revenue builds a platform for growth

The H1 results are as announced in the October update; COVID delayed several new contracts until earlier this month, leaving H1 revenue at £5.1m. However, management remained comfortable with a FY sales forecast of £21.7m on the basis of a strong pipeline and the substantial tranche of annually renewed revenue billed each H2. Reassuringly, the new contracts have now been signed for both the Celebrus Customer Data Management (CDM) solution and the Celebrus Customer Data Platform (CDP), and they cover a range of verticals from financial services to automotive manufacture and ecommerce provision. With significant net cash, D4t4 is in a strong position for long-term sustainable growth on the back of rapidly growing global demand for CDP/CDM. It remains confident on prospects in new geographies (N America and APAC) and new use markets (fraud, risk analysis and healthcare) plus a high level of recurring revenue. Our forecasts and target price remain unchanged save for a tweak to cashflow and raised dividend expectation. We reiterate our 310p target price.

Companies: D4t4 Solutions plc

19 Nov 20

Macfarlane Group* - Strong Trading Update – Earnings Upgrades

Macfarlane has released a strong trading update for the 4 months to October 31 2020 highlighting second half revenue and PBT to date being ahead of 2019 and the expectation that 2020 PBT will be broadly in line with 2019, a strong recovery from the uncertain position at the interim results. Separately, the Group has announced that CFO John Love will be stepping down from his role and the Board to be replaced by Ivor Gray, current Group Financial Controller and Company Secretary. We expect this to be a seamless transition given Ivor's experience in the Group and represents very well managed succession planning by the Board. Reiterate buy rating.

Companies: Macfarlane Group PLC (MACF:LON)Macfarlane Group PLC (5K6:FRA)

24 Nov 20

Appreciate Group - Initiation Note

Appreciate is the UK's leading voucher, gift card, and e-code provider, working with brands from Iceland to Halfords to Boots. It sells its pre-paid products to corporates as well as directly to consumers. It also runs the UK's largest Christmas Savings scheme, having helped some 2.7m families put money aside for Christmas expenses over the years. In Appreciate, we see a business that's undergone significant change and modernisation since 2018. Under its highly competent and dynamic management team it has transformed from a Christmas savings business that physically produced hampers, to a pure play financial services business with material growth prospects in the longer term.

Companies: Appreciate Group plc

24 Nov 20

Intercede - Interims: gaining momentum

Interims, in line with the October trading update and unchanged forecasts, follow a second (November) purchase order from the new US Department of State contract, highlighting momentum. The 5Cs that form management’s measure of strategic development have all generated positives: colleagues, with employee NPS rising, and no furloughs or paycuts; new & renewing customers, high-profile names and sectors; a broadening channel including generating new clients; code increasing with the addition of FIDO and increased reach through MyID Enterprise/ MyID Professional; and cash of £8.1m with £4.8m debt all in the form of in-the-money December 2021 convertibles. Strong 1H performance and cashflow derisks full-year expectations. Target raised to 125p (100p).

Companies: Intercede Group plc

20 Nov 20

Trackwise Designs - £11m placing for new IHT site and scale up

The group has announced it has successfully raised £11m in an equity placing to help accelerate capex on a new IHT manufacturing site based on guaranteed minimum production volumes and ahead of anticipated customer orders. It is expecting a significant ramp up in production in FY21 following a multi-year £38m production order from a UK-based EV manufacturer. Strong progress is being made with its customer trials for the medical catheter market, which together with other expected new business requires additional capacity to be put in place.

Companies: Trackwise Designs Plc

12 Nov 20

Acquisition, interim results and board changes

Volex has reported interim results that are in-line with expectations following a strong trading update in mid-October. Of far greater significance is today’s announcement of the proposed acquisition of DEKA for a consideration of up to €61.8m on a debt free basis. DEKA is a leading and highly profitable power cord manufacturer, strategically located in Turkey, that serves leading European white goods manufacturers. The acquisition should close in early CY2021, subject to expected Turkish Competition Authority approval. We foresee 15% earnings enhancement in FY2022E with further opportunities for revenue synergies with Volex in the Far East as its operations also vertically integrate, production efficiencies increase and the cost of production falls. The statement highlights that pro forma net debt/EBITDA remains under 0.4x and this provides scope for further bolt-on acquisitions alongside a new $70m RCF and $30m accordion, also announced with the interims.

Companies: Volex plc

24 Nov 20

Robust H1, US SecPay driving growth

Eckoh’s fast growing US SecPay business and robust UK business model have minimised the impact of lockdowns with u/l H1 revs down just 3% yoy and profits flat. ECK reintroduces FY21 guidance, expecting H2 revenues comparable to H1 and FY21 AOP comparable to FY20. US SecPay is now a meaningful >30% group revs, growing 80% in H1 and with larger customers now re-engaging. We expect growth to continue in FY21 and beyond; the opportunity is multiples of current sales (FY21E $13m- +60% yoy). We similarly expect the cash cow UK business to continue to recover and return to c. 5% secular organic growth over time. It is especially continued success with US SecPay that is likely to lead to group FCF exceeding that of £5-6m achieved in FY20/19 over time and a FCF yield well above 5%. That’s attractive.

Companies: Eckoh plc

24 Nov 20

FY’21 interims and fundraising of up to £17.5m

ReNeuron, a UK-based stem-cell therapy developer, has announced today a fundraising of up to £17.5m (gross) through the means of a placing, subscription and open offer. The Company has also announced its FY’21E interim results as well as the latest data from its lead candidate hRPC in the ongoing Phase I/IIa clinical trial for Retinitis Pigmentosa (RP). The additional funding aims to provide liquidity for the next 18 months, and through key clinical development milestones for the hRPC programme and exosome collaborations. **** As joint broker to ReNeuron, we are restricted and can therefore provide factual comment only. Shareholder approval for the transaction will be sought at the General Meeting to be held on the 11th December 2020 ****

Companies: ReNeuron Group plc

24 Nov 20

Contracts Win with Barrick Showcases Capital Ltd Growth Potential

Less than a fortnight after a major new contract announcement in West Africa, Capital has announced the expansion of its operations at Barrick Gold’s Bulyanhulu Gold Mine in Tanzania. The contracts include a five-year laboratory services contract for MSALABS, together with a two-year underground grade control drilling contract. Capital commenced operations at Bulyanhulu in February 2020, undertaking a deep hole delineation drilling program. The successful execution of this resulted in an expansion of services, with two underground rigs added to operations from May. The new contract will expand the underground fleet to four, utilising two rigs from the existing fleet and including the acquisition of a further two rigs.

Companies: Capital Limited

17 Nov 20

Rude Health - finnCap Life Sciences quarterly sector note

Moderna announced the first interim analysis from the Phase III study of its COVID-19 vaccine candidate, which was found to be c.95% effective in preventing symptomatic COVID-19 disease. This follows a similar announcement from Pfizer/BioNTech last week, and the caveats we mentioned at that time remain the same. AstraZeneca-Oxford University are also due to announce initial results this month. While these results are highly encouraging, we reiterate that they do not diminish the urgent need for COVID-19 treatments and testing, which will still be required for years to come, and we outline why. We consider Synairgen, Avacta, genedrive, Omega Diagnostics and Open Orphan to offer good buying opportunities.

Companies: AVCT ODX SNG GDR ORPH

18 Nov 20

Tatton Asset Management (TAM LN) - 1H confirms resilient growth

What’s new: Interim results confirm the growth set out in the recent trading update:  12.6% rise in Group Revenues to £11.0m (1H last year: £9.7m);  21.9% rise in adj operating profit to £5.03m (1H last year: £4.13m);  17.4% rise over 6 months in AUM to £7.8bn on 30 September 2020, n.b. From 31 March 2020 the WMA balanced index rose 11.6% to 4510; Market movements added 12.5% to AUM (i.e. Tatton outperformed WMA); 1H net inflows of £328.1bn were 4.9% of opening AUM (i.e. c 10% annualised net inflows);

Companies: Tatton Asset Management Plc

20 Nov 20

Trackwise Designs - IHT capacity to be quadrupled

Trackwise has announced a placing and open offer, potentially raising up to £12.0m (gross). This is to fund a new manufacturing facility that is expected to quadruple IHT production capacity. The additional capacity is required to support the up to £38m electric vehicle (EV) contract announced in September and potential volume orders from electro-surgical catheter manufacturers and aerospace OEMs and suppliers.

Companies: Trackwise Designs Plc

25 Nov 20

ImmuPharma’s partner Avion set to meet FDA in December to discuss Phase 3 lupus clinical trial

25 Nov 20

Oil & Gas Daily Flow

Pantheon Resources (PANR LN): Rig contract for the Talitha #A well secured | Falcon Oil & Gas (FOG LN): Kyalla 117 N2-1H ST2 still awaits measurable gas breakthrough | Mosman Oil & Gas* (MSMN LN): FY20 results, revenues and cash flows continue to grow | Tullow Oil plc (TLW LN): Strategic update ahead of CMD

Companies: PIN FOG MSMN TLW

25 Nov 20

SP Angel Healthcare Conditions

Sensyne Health (SENS.L): Research agreement with Hampshire Hospitals NHS Foundation Trust | RenalytixAI (RENX.L): First Quarter results for 2021

Companies: Sensyne Health Plc (SENS:LON)Renalytix AI Plc (RENX:LON)

25 Nov 20

A trust for all seasons

Alliance Trust (ATST) underwent a major overhaul three and a half years ago, refocusing on its global equity portfolio. Non-core parts of the company have been sold and overheads slashed. Today, the trust’s assets are managed by nine of the world’s best stock pickers. Investing sustainably is a strong theme within the fund, but the manager, Willis Towers Watson, seeks to blend managers with different styles so that the trust is not beholden to any particular fashion in markets.

Companies: Alliance Trust

25 Nov 20

A trust for all seasons

Companies: Alliance Trust

25 Nov 20

Resilient performance in spite of pandemic disruption

Profit performance in the year to Aug’20 was robust and ahead of general expectations. This includes cashflow and year-end net cash of £3.5m which is not flattered by deferrals, having kept payables up to date in Q4. Following a cost reduction project in August, the business is lean and agile, and well placed to navigate the uncertainties ahead including lock-down 2.0, prior to which it had traded well (incl. the all-important Sept period). Even in the absence of forecasts, valuation looks undemanding given the asset backing and recent track record.

Companies: Cambria Automobiles Plc

25 Nov 20

H1 in line, AuM pushes on with performance tailwind

Liontrust has delivered in line interims, however AuM growth since the HY point drives higher earnings estimates. In H1, net inflows remained strong despite the backdrop and, alongside performance, contributed to 28% AuM growth. Post-period, performance momentum has boosted AuM by a further 5% to £28.1bn, plus the completion of Architas. Together, this results in a step up in the run rate. We update our forecasts for higher than expected AuM driving a +5% upgrade to FY21e EPS and +10-13% in outer years. We do not forecast scaling in Architas or Global which could prompt further upgrades, reducing the 15x FY22e PER.

Companies: Liontrust Asset Management PLC

25 Nov 20

VSA Morning Miner

Prime Mining (PRYM CN) has now commenced drilling with the first of multiple drill rigs on site. Recent trenching work and surface sampling has enabled focused drill targeting ahead of this 10,000m campaign which will seek to step out the known mineralisation, drill previously untested structures and upgrade confidence on the current resource.

Companies: Prime Mining Corp.

25 Nov 20

Diversity supports resilient H1 performance

Severfield’s diverse range of end-markets supported a 40% increase in sales despite “challenging” conditions for Britain’s leading structural steel specialist in its first half results. Profitability and net cash also improved, with the Group predicting a further increase in profit in the second half. We have reinstated our forecasts, which initially assume the Group returning to peak earnings over a three-year horizon, boosted by further growth in Europe and recovery in the Indian JV.

Companies: Severfield Plc

25 Nov 20

Market Report: FTSE hot on heels of US rally and Rishi gets set to unveil spending plans

25 Nov 20

Palace Capital - COVID-19 impacts actively managed

Palace Capital’s (PCA) H121 performance was robust and ahead of our central expectations. We have slightly increased FY21 earnings forecasts and introduced FY22–23 estimates, with growth driven by Hudson Quarter completion, on track for March 2021. Significant additional reversionary potential and development/refurbishment represent significant value creation potential.

Companies: Palace Capital plc

25 Nov 20

Capital Access' Hot Off The Wires - The Day Ahead

Today's news & views, plus announcements from KGF, MRO, UU, BAB, BRW, FUTR, GNS, HICL, LIO, AEXG, FUL, KWS

Companies: AEX GNS HICL

25 Nov 20

Post recent COVID-19 vaccine trial results

After Pfizer and Moderna, AstraZeneca-Oxford reported (preliminary) late-stage results for their COVID-19 vaccine candidate. Based on logistics and pricing, Astra’s vaccine has clear advantages. However, with results for other (major) countries still awaited and considering past safety concerns, it is pre-mature to decide if Astra has won this race. Also, considering the firm’s ‘no-profit’ commitment as long as the pandemic is on, any major earnings uptick seems unlikely.

Companies: AstraZeneca PLC

25 Nov 20

CfD Opportunity

The new ammendments to the UK CfD renewable energy support scheme opens up an opportunity for tidal energy to compete against floating offshore wind. We think the two technologies can deliver similar costs but that tidal, and specifically the already permitted capacity at Atlantis’s MeyGen site, has a marginal advantage in terms of readiness.

Companies: SIMEC Atlantis Energy Ltd.