Research Tree | Equity Research for Investors

Level the playing field with real-time Equity Research

Research Tree offers both private and institutional investors access to the latest UK investment research from over 35 Brokers and Research Providers, offering comprehensive coverage of small and mid-cap stocks.

The Equity Research Platform

Equity research, broker reports, target prices, and valuations on UK-listed companies in real-time.

Our platform learns which sectors, industries, and markets you're intersted in to help you discover new stocks.

14 Sep 20

Interims highlight robust underlying performance

Whilst headline H1 revenue growth of 23% is eye-catching, for us the most comforting factor is the robust performance of the underlying business in the most challenging of circumstances. Sales of the Primestore MTM sample collection device contributed £6.5m, meaning the core business was -8% in the period, well ahead of internal expectations. Highlights include strong performances from BhB, DiaSpect Tm and the Clinical Chemistry portfolio, all of which grew revenues in the period. Whilst there were challenges in certain geographies, this is a very creditable performance and testament to the strength and defensiveness of the core business. We make no further change to our forecasts at this stage, having upgraded regularly in recent months. Given we have only included firm orders for Primestore up until the end of this month, we remain confident further upgrades are likely for the rest of this year and into next. In the meantime, latent growth potential in the core business is building with, inter alia, Chinese approval of Quo-Test, strong momentum with DiaSpect Tm, the Trellus health investment and a variety of contract manufacturing orders in the Central Lab/Life Sciences segment adding to the medium term growth outlook. Given the continuing scope for upgrades, we continue to see upside potential in the shares – EKF remains one of our Best Ideas for 2020 (up 66% YTD).

Companies: EKF Diagnostics Holdings Plc

11 Sep 20

Games Workshop Group - Exceptional start to FY21

Games Workshop’s (GAW) Q121 trading update was well ahead of expectations, indicating that the previously flagged strong post-lockdown demand has continued, helped by a major product re-release in the period. We upgrade our FY21e PBT forecast by 37% to £115.9m, reflecting higher revenue growth, c 12% versus 2% previously, and a higher operating margin pre-royalties of c 35% versus 27% previously. On our new forecasts the P/E for FY21 is 35.2x. The EV/sales multiple of 10.6x is a premium to GAW’s previous highest multiple.

Companies: Games Workshop Group Plc

14 Sep 20

Cenkos: Seeing Machines Ltd - DMS kit on Qualcomm platform

Seeing Machines has announced plans to deliver a fully supported, integrated Driver Monitoring System (DMS) kit to the global automotive industry. This will be in the form of embedded software (e-DMS) for the Qualcomm® SnapdragonTM Automotive Development Platform (ADP) from Qualcomm Technologies. The kit is expected to be available before the end of this calendar year for use by select automotive Tier 1 suppliers and OEMs and will support a full stack Seeing Machines DMS solution on the Snapdragon™ ADP targeting integration into either infotainment or centralized ADAS systems, and includes an optimized DMS reference camera, ADP interface board and the company's FOVIO and Occula software.

Companies: Seeing Machines Ltd.

17 Sep 20

Cenkos: Duke Royalty Ltd - Improving trading – increasing cash receipts

FY20A results largely reflect a period prior to the Covid-19 lockdown, yet show Duke entering a more challenging FY21E with momentum. Yesterday's trading update demonstrated another notable rise in quarterly cash receipts for Q2/21, as royalty partner trading continues to improve. As some partners' forbearance measures will expire this month, Q3/21 receipts should continue this upwardly momentum. This opens the door to a return to cash dividends at some future point. Today, Duke also confirms it is now seeking new royalty partners, alongside follow-ons.

Companies: Duke Royalty

14 Sep 20

Major contract win

Surface Transforms has announced a major contract win with a manufacturer of EVs. Lifetime revenue is estimated to be £27.5m. Our 2021e revenue forecast is lifted by c.80% and 2022e by c.120%. The improved OEM order book brings better visibility and stability to revenues. To fulfil the order, significant investments will be made in headcount, but the Group should now report a net profit in 2021e against our previous forecast for a loss. Additional working capital and capex are also required but the cash position should improve materially in time. The award demonstrates the performance, weight and environmental benefits of carbon ceramic discs when fitted to EVs. More orders from this customer and others should flow. We showed in our recent initiation note, Release the brakes, 19 August 2020, that the market opportunity for carbon ceramic discs is large, irrespective of whether for ICEs, EVs or hybrids. The Group is on-track to becoming a volume supplier to the industry. With increased estimates our valuation is lifted to 45p from 40p.

Companies: Surface Transforms Plc

15 Sep 20

EUS growth drives record revenue and profit

The Interims are as flagged in the July update; global lockdowns helped End User Spend (EUS) over the platform rise by 59% YoY to £743m. Encouragingly, the H1 revenue growth closely matched that rise; increasing 50% YoY, to a record £4.8m. With operational gearing in the platform, group profitability continues to rise rapidly as revenue grows; H1 adj. EBITDA of £1.1m, more than double the whole of FY 2019 earnings. The major deals delayed in FY 2019 also arrived in H1, for Platform and Bango Marketplace; notably, the purchase of a controlling stake in Audiens by Korean tech giant, NHN, assisting management focus while retaining a 40% stake in a business set to be boosted by funding and IP from its new parent. Operating activities were cash positive and capex was more than covered by an NHN investment, lifting net cash to £4.2m. This is an exciting year, with deals signed in H1 expected to help EUS reach £2bn in 2020 and leaving BGO on track to meet our FY forecasts of strong revenue growth and material profitability.

Companies: Bango Plc

16 Sep 20

Interims show strong performance in core business

RBG Holdings had H1 revenues of £12.0m, up 17% against H1’19, of which £11.7m came from the Group’s law firm, RBL. On a LfL basis (excl. £2m of discretionary gains from litigation assets in H1’19), Group revenues were up c.46% YoY. EBITDA of £2.6m offers still-compelling margins of 22%. Transaction delays in Convex and a period of investment in LionFish held back ST performance for these higher margin divisions, yet pipelines remain healthy for Convex. Management is bullish on its ability in H2 to divest litigation assets in order to fund new investment, and in line with strategy. Continued uncertainty over timings around Convex transactions completing, and COVID headwinds, means we keep forecasts withdrawn, however suggest an intrinsic value of 90p is comfortably achievable for the shares.

Companies: RBG Holdings Plc

11 Sep 20

Hurricane Energy - Technical review update; H1 2020 results

Technical review update; H1 2020 results

Companies: Hurricane Energy Plc

14 Sep 20

Allenby Capital TMT Update - 14.09.20 - CPX.L, GFIN.L, NWT.L, MWE.L

CAP-XX Ltd* (CPX.L, 4.5p/£19.9m) | Gfinity plc* (GFIN.L, 3.8p/£28.9m) | MTI Wireless Edge Ltd* (MWE.L, 44p/£38.7m) | Newmark Security plc* (NWT.L, 1.175p/£5.5m)

Companies: CPX GFIN MWE NWT

15 Sep 20

Strong H1 confirmed; strong cash conversion

Kape’s interims saw Group revenues rise +97% y/y to $59.0m (organic: +12%), driven by a 245% increase in Digital Privacy sales (+47% organic). Organic growth was stronger than anticipated in Digital Privacy, above N1Se estimates of 30%-40% as a function of strong end-user demand. CyberGhost (VPN) and Intego (end-point protection) subscriber bases grew +10% and +11% h/h respectively. The main takeaway is Kape’s inflection to positive FCF ($6.7m; H1’19: -$1.8m) alongside increased cash investment into customer acquisition (+60% y/y to $29m). We see meaningful cash flow margins (>25%) being delivered in the next 1-2 years, with £31m of FCF forecast for FY’21E generating a 6.3% FCF yield (peers offer 3.5%-4%). Putting Kape on a 4% FCF yield implies an intrinsic value of >£3/share.

Companies: Kape Technologies Plc

14 Sep 20

Codewise: Smart with traffic

CentralNic has agreed to acquire Codewise, which consists of Zeropark, a monetisation business similar to Team Internet, and Voluum, a complementary online marketing SaaS provider. CentralNic is consolidating and market at attractive valuations, delivering synergies and improving target company operations. Overview: Zeropark operates a marketplace for domain name investors seeking monetisation and marketers seeking traffic. Voluum provides a SaaS marketing platform that helps SMBs track and analyse traffic sources, campaigns and performance data to optimise advertising campaigns. Codewise generated revenue of $60.3m and Adjusted EBITDA of $7.4m in the LTM ended June 2020.

Companies: CentralNic Group Plc

15 Sep 20

Reassuring trading update

Avingtrans has issued a brief trading update and confirmed that the Group’s preliminary results to 31st May 2020 will be published on 30th September. The trading update is reassuring, highlighting a Q1FY2021E order in-take in-line with management expectations. The statement also highlights two further contract wins in the nuclear sector for US$2.8m in South Korea to provide spare parts for essential water service pumps and a £1.5m UK contract for replacement valves. The previous update in early July has already confirmed that the Group expects to report revenue of £114m, EBITDA of at least £11.5m and net debt (excluding IFRS16 lease liabilities) of £7.5m, which is incorporated into our FY2020E forecasts. It would seem likely that the Group will wish to re-instate forward guidance at the time of the results and to this end we would expect management to indicate a year of solid progress in EBITDA for FY2021E. Over the first quarter the Group has demonstrated good resilience, operating at close to normal levels, with the exception of Oil & Gas (where there is fairly limited exposure) and HVAC activities at Ormandy, supported by exposure to multiple markets and a strong customer base that includes governments and their agents.

Companies: Avingtrans Plc

15 Sep 20

First strategic revamp

With the sale of the Singaporean operations for £1.6bn, the new CEO, Amanda Blanc, shows her intention to focus rapidly on its preferred markets (the UK, Ireland and Canada). The next candidate for sale is the French unit. This transaction is more complicated than the previous one, with the necessity to obtain the agreement of Afer, its key partner in France. With potential proceeds of £2.9bn, Aviva could reduce its debts significantly and allocate more capital to the UK bulk annuity business.

Companies: Aviva Plc

09 Sep 20

Crafting a £100m+ factory solutions firm

As legendary investor Warren Buffet succinctly puts it: “it is better to buy great companies at fair prices, rather than fair companies at great prices”. Today, we think Mpac has done exactly that by acquiring Ohio based Switchback Group, Inc. for a maximum of $15m in cash (£11.4m). Equivalent to modest takeover multiples of 7.1x EV/EBIT and 1.1x EV/sales – with $13m of the consideration paid upfront, and the rest structured as a $2m earnout depending on EBITDA performance over the next 24 months.

Companies: Mpac Group Plc

14 Sep 20

Cenkos: Xpediator Plc - Operating Dynamism

The Group performed robustly in H1/20A, experiencing like-for-like revenue growth in Q1/20A. The Group's dynamic business model combined with the implementation of a strict cost reduction strategy ensured Group cash balances and margin profile improved. We expect recent trading momentum to persist into H2/20 as the Group continues to benefit from its diverse revenue channels, customer base and end markets.

Companies: Xpediator Plc

18 Sep 20

VSA Morning Miner, 18/09/20 (American Lithium)

American Lithium (LI CN) has announced a substantial improvement in its cash position through the exercise of warrants bolstering cash to C$6.7m from the last reported amount of C$0.8m at the last financial results. As highlighted, the company had a substantial number of in the money warrants expiring September 2020 along with other in the money warrants which have been exercised. With the additional cash the company will be well placed to achieve its near term milestones which are largely focused on metallurgical test work at the bench scale and in a pilot plant to be constructed over the next year. The company also plans to complete a PEA in 2020. This will, in our view, build on the early success which has demonstrated the potential to produce lithium carbonate following simple and fast acid leaching, ultimately indicating a low cost production process.

Companies: American Lithium Corp.

18 Sep 20

Cenkos: Trinity Exploration Production P

Trinity has announced a strong set of interim results during a highly volatile period, with production increasing by 9% year-on-year to 3,282bopd (H1/19 3,007bopd). Operating break-even's post hedging in H1/20 reduced to US$22.3/bbl, a 15% year-on-year reduction and a 65% reduction since 2014. Similarly, a relentless drive to improve efficiencies and reduce costs has seen G&A and opex fall by 67% and 65% respectively since 2014. Despite the dramatic fall in oil prices, Trinity's strong production performance combined with its receipt of VAT receivables via a VAT Bond sale and the drawdown of a small working capital facility facilitated cash balances increasing by 43% to US$19.7m from YE2019. Trinity is well positioned to grow both organically and inorganically, with Trinity signing MoU's and submitting EOI's (in consortium with Cairn Energy Plc) to pursue new opportunities of scale. We set our price target a 31p/share, a 248% premium to the current share price and reiterate our BUY recommendation.

Companies: Trinity Exploration & Production Plc

18 Sep 20

Morning Note – 18 September 2020

Companies: GML TWD TIDE

18 Sep 20

Crimson Tide - Growing long-term subscription revenues

Crimson Tide has reported a strong set of H1 results evidencing very strong sales momentum backed by long-term contracts and cash flow. H1 sales grew by 40% and EPS by 154%. Net cash has improved to £0.8m at June 2020 from nil at December 2019. The strategic focus on transportation and supermarkets is working well, partnerships are improving routes to market, and there is growing traction from investments in innovation. We have left our forecasts unchanged for now, but recognise positive pressure and have upgraded our target price from 3.1p to 4.3p. We reiterate our view that Crimson Tide’s valuation will be dictated by its ability to convert the significant opportunity rather than short-term metrics. H1 results show the group is nicely on track to do exactly that.

Companies: Crimson Tide Plc

18 Sep 20

Trackwise Designs - Production contract with EV manufacturer

The company has announced a major milestone contract agreement, its first for full series production of IHT products. The contract is with an Electric Vehicle (EV) manufacturer, with a maximum revenue value of £38m over the next three years. Recent market headwinds have understandably resulted in some slippage in half-year revenues and a reduction in profit. This is a significant milestone production agreement, with huge future upside potential from the wider adoption of IHT flexible printed circuit boards.

Companies: Trackwise Designs Plc

18 Sep 20

Symphony Environmental outlook for earnings to strengthen considerably (Analyst Interview)

Premium

17 Sep 20

Name change to highlight development in renewables

Name change to highlight development in renewables SIGNIFICANT NEWS FACT Following the general assembly, Dietswell takes the name of the renewables division to become Dolfines. The renewables division is now Dolfines New Energies. This highlights the company’s activities in offshore wind, which benefit from a positive momentum. Coincidentally, the name change came the same week as BP’s annual energy outlook. The outlook, which departs strongly from previous year’s, supported management in shifting its strategy. The major now intends to redeploy a large part of its capital into low carbon activities. BP plans for a reduction of 40% of its hydrocarbons production by 2030 and a ten-fold increase in low carbon investments ($5bn by 2025). It does so as it bets on a rapid energy transition, where total investments in renewables (wind and solar) will increase from $300bn p.a. to c. $450bn p.a. by 2025 and above $600bn p.a. by 2035. BP sees renewables capacity increasing by 12% CAGR over the next decade. While this is BP’s second take at going beyond petroleum, it appears more genuine this time, as proven by BP’s $1.1bn investment in an offshore wind JV with Equinor. Time will tell if such a rapid transition is in place, but the recent updates on EU climate targets surely point towards this direction.

Companies: Dietswell

17 Sep 20

Silence Therapeutics - Change is good

Silence provided a corporate update with its H120 financial results that show it moving forward on all fronts. It announced that it has hired a new CEO, listed its stock on Nasdaq, enrolled its first volunteers in SLN124’s Phase I study, filed its SLN360 IND ahead of schedule and expanded its existing partnership with Mallinckrodt, all in the past few weeks.

Companies: Silence Therapeutics Plc

17 Sep 20

Beyond 2020: leading the sustainability race

Heidelbergcement announced its new strategic plan, which was rather average. As expected, it developed its new strategy based on the previous one, but the new CEO disappointed us by presenting a strategic plan less aggressive than we anticipated. The new medium-term financial targets until 2025 include an increase in EBITDA margin by 300bp, ROIC >8%, capex at ~€1.2bn p.a., and re-iterated some of its previous targets – leverage <2x, cash conversion ratio of ~45%, and a progressive increase in dividends.

Companies: HeidelbergCement AG

17 Sep 20

S-Ventures eyes 'opportunities to scale' in the wellness sector after listing on AQUIS

17 Sep 20

JPMorgan Global Growth & Income - Delivering ‘best of both worlds’ – growth & income

JPMorgan Global Growth & Income (JGGI) aims to provide superior total returns and outperform its benchmark over the long term by investing in a portfolio of 50–90 companies from around the world. It has achieved this objective, delivering outright gains and outperforming its benchmark since the inception of its current strategy in 2008. JGGI makes quarterly distributions set at the beginning of the financial year, with the intention of paying at least 4% of NAV at the time of announcement. Dividend payments can be funded from reserves, which means the managers are not constrained by the need to purchase high-yielding stocks but are instead free to invest in non-dividend paying stocks for capital growth. The managers believe this gives investors ‘the best of both worlds’.

Companies: Jpmorgan Global Gwth & Inc Plc

17 Sep 20

Q2 returned to profit

Thanks to lower markdowns and tightened operating costs, the group has reported a better than expected H1 20 profit. The progressively improved top-line momentum and strong resilience in profitability have led to better visibility for the second half of the year.

Companies: Industria de Diseño Textil SA