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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

23 Sep 20

Strix Group plc (KETL LN) - Accretive acquisition and outlook improving

Strix has announced the strategic acquisition of LAICA a family owned business in Vicenza, Italy for €19.6m in a mixture of cash and shares. It will be earnings accretive in FY21 and is scheduled to complete by the end of FY20, with just Italian government approval outstanding. ZC operating profit estimates are unchanged in FY20 but increase by c. 8% in FY21 to reflect the contribution from the deal, the impact on earnings is smaller due to the issue of shares and higher tax in Italy. Management believe significant synergies, both cost and revenue, will be derived from the deal over the next 2-5 years. The interim results had been well flagged in the comprehensive trading update in late July and today’s statement confirms that profitability remains in line with the guidance of achieving a flat performance yoy in FY20. The interim dividend of 2.6p is in line with last year and in keeping with the commitment to at least meet the 7.7p paid in FY19. Unlike most peers, Strix has maintained guidance as well as its commitment to pay a dividend and today’s acquisition unpins the continuing strategy of diversifying the business into areas offering greater growth.

Companies: Strix Group Plc

23 Sep 20

Confirmation of stellar H1

LoopUp has announced a very strong H1 period, in line with the previous trading update and reflecting a number of months of exceptional performance. This is allowing the business to invest in the major identified new opportunity, to provide telephony within Microsoft Teams, where the early signs are extremely positive. We look forward to further detail on the Teams pipeline and sales levels over time.

Companies: LoopUp Group plc

24 Sep 20

Cenkos: Venture Life Group Plc -- Very strong first half

Venture Life Group has reported on a very strong H1/20A period. Revenues were up 80% with operational leverage delivering c100% growth in gross profit and +350% adjusted EBITDA growth. Performance was supported by the acquisition of PharmaSource, strong sales to China, sales of new brand, DISINPLUS, and the group's ability to maintain production at its Italian manufacturing facility. With this report we have introduced FY21E forecasts, expecting the company to maintain its growth momentum and deliver 10% revenue growth. Venture Life is delivering a strong performance, we maintain our Buy recommendation.

Companies: Venture Life Group Plc

21 Sep 20

Interim results show resilience

Augean has reported interims to 30 June 2020. With the first half bearing the full impact of Covid-19, adjusted PBT decreased by 11% to £8.5m, which is in line with our expectation. With radioactive wastes, biomass for EfW and construction impacted by lockdown and depressed activity levels in its North Sea services, due to the low oil price, the results demonstrate the resilience of the Group and also the benefit of its key position in its markets with strategically located hazardous waste treatment and disposal facilities in the UK. Whilst the statement highlights that full year results are expected to be broadly in-line with market expectations, we have conservatively reduced forecasts. Nevertheless, with strong cash generation and sustained growth EV/EBITDA falls to 5.3x and 4.1x for FY21E and FY22E, a level that is substantially below sector constituents and transaction valuations.

Companies: Augean Plc

22 Sep 20

Litigation Capital Management - FY20 Results – Scaling up with strong returns

Litigation Capital Management has announced FY20 results with gross profit up 7% to A$21.7m and PBT of A$9.2m, slightly behind expectations albeit the Group had already flagged that delays to 3 cases during the year would result in resolutions in FY21, thereby impacting FY20 results. That said, excellent strategic progress through the year and good news flow as well as increasing scale suggests more value to come. Reiterate buy

Companies: Litigation Capital Management Ltd.

22 Sep 20

Strong results plus transformational acquisitions

Full-year results to 31 May 2020 deliver revenue of £15.0m (+10.3%) and EBITDA of £6.8m (+36.0%) as noted at the acquisition of Quantuma Advisory. We continue to believe a key value driver of owning K3 shares is an investor’s exposure to the positive disruption being wrought by the company’s model, which now has the ability to be applied to synergistic markets across the addressable professional services SME sector as a result of the two recent acquisitions. The already proven restructuring and insolvency practice specifically has the potential to deliver significant upside in the current environment. We reiterate our estimates, noting EPS growth of 63% between 2020A and 2023E. Target price remains 300p, offering 100% upside from the placing price of 150p.

Companies: K3 Capital Group Plc

21 Sep 20

H1 2020 Interim Results

Central Asia Metals (CAML LN) reported robust interim results in the context of the H1 2020 backdrop; solid production and the company’s fundamentally low cost base meant that CAML remained profitable despite the sharp pullback in commodity prices during the period which led to a 17% YoY decline in revenue to US$70.8m. Consequently, EBITDA was down 25% YoY to US$42.5m despite a decline in unit costs of 6% YoY at Kounrad and 9% YoY at Sasa to US$0.48/lb and US$0.43/lb respectively which cushioned the impact of the weaker the top line. With no significant one offs in the period, EPS of US$0.10/sh. was 33% lower YoY.

Companies: Central Asia Metals Plc

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

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

23 Sep 20

Cenkos: Equals Group Plc -- Revenue growth through the headwinds

To achieve YoY revenue growth over H1/20A despite the challenges of Covid-19 and its impact on the travel sector is testament to Equals' resilience and increasing focus on B2B and International payments services. While weaker gross profit and EBITDA margins have impacted profitability in H1/20, we see potential for an earnings recovery in H2/20 given cost reduction measures currently being undertaken. This should lead Equals to cash breakeven in Q4/20 and FCF positive by early FY21.

Companies: Equals Group Plc

22 Sep 20

WHI Morning Comment: Judges Scientific (JDG) - Interim Results – Creditable and profitable H1. No changes to FY estimates

Judges Scientific is focused on acquiring and developing companies in the scientific instrument sector. Given the backdrop of H1, and the global nature of Judges' customer base, we see this morning's results as a significant achievement when set against the backdrop of significant COVID related headwinds. Revenue decreased by 6.8% (organic -12%) to £37.4m (H1-19: £40.2m) which, after the sensible management of the cost base, yielded an adjusted pre-tax profit of £6.4m (H1-19 £8.4m), a 22% reduction, and adjusted fully diluted EPS of 82.5p (H1-19: 107.0p). However, reflecting a commitment to its progressive dividend policy, and confidence in the business, the interim DPS is increased by 10% to 16.5p. With respect to H2, COVID related business risks remain, none of which are unique to Judges. However, given the relative strength of H1 (albeit at some expense to the order book), management flag ‘cautious confidence' in achieving full year market expectations. As such, our FY 2020E adjusted PBT and EPS estimates are unchanged this morning.

Companies: Judges Scientific Plc

22 Sep 20

Cenkos: 1pm Plc -- Positive signs emerging over recent months

FY20 results reflect a year of trading in-line with earlier expectations, until being significantly interrupted in Q4/20 by the impact of Covid-19. Despite this, 1pm remained profitable throughout, despite accepting forbearance requests and prudently lifting bad debt provisions for the future. Post-period, there has been a noticeable pick-up in trading as the UK economy recovers, which 1pm is currently positioning itself for. A P/TNAV of 0.55x materially undervalues 1pm, hence we remain at “Buy”.

Companies: 1pm Plc

22 Sep 20

Ergomed - Adj EBITDA upgrade despite industry challenges

H120 adjusted EBITDA of £9.1m was the main positive surprise for us in Ergomed’s full interim report released today. We have increased our adjusted EBITDA forecasts to £18.3m (up 8.6%) in 2020 and £20.1m (up 6.8%) in 2021. A strong order book (£151.4m, up 22.0% from the end of 2019) with high visibility into 2021, continued overall business growth and a strong balance sheet should allow Ergomed to successfully navigate the COVID-19 pandemic, invest in organic growth and look for potential strategic acquisitions. Our valuation is upgraded to £409m or 845p/share.

Companies: Ergomed Plc

17 Sep 20

WHI Morning Comment: Water Intelligence (WATR) - Interim results at upper end, standing out during Covid-19

WATR reports interim results this morning which reflect no slackening in the group's positive momentum, and which evidence again the effective business model. Adjusted PBT grew by a healthy 20% (statutory PBT growth of 33%), suggesting that the business continues to operate strongly and in such a way as to meet and exceed its targets again notwithstanding the challenges imposed on businesses generally by Covid. Within the overall growth momentum, both the franchise business and the Corporate division saw impressive margin gains, while franchise royalty succeeded in growing notwithstanding reacquisitions reducing the pool of franchises, a positive outcome. FY2020E forecasts are reaffirmed, although conservatively we leave them unchanged at this point. WATR is the only national US operator providing a leak detection service across the US, and this is a seriously large market – the insurance sector alone worth $US13bn p.a. above and beyond the traditional markets WATR has served. Now spanning clean and dirty water (Covid-19 opportunities), the company operates as an integrated entity and continues to generate new, value-added products. At current levels, we see significant upside to our 500p-plus fair value assessment, and note WATR's aspiration towards $US250m of underlying sales.

Companies: Water Intelligence Plc

24 Sep 20

Mines and Money set for another 'star-studded' virtual event this Autumn

24 Sep 20

Oil & Gas Daily Flow

Block Energy (BLOE LN): Strong operational progress achieved | Canadian Overseas Petroleum (COPL LN): OPL 226 licence update, Nigeria

Companies: Block Energy Plc

24 Sep 20

Cenkos: Directa Plus Plc -- Material upside

Directa Plus is a commercially proven graphene supplier with a unique production process that creates high quality materials that are already used in a wide array of products internationally across multiple verticals. We expect the company to reach EBITDA positive in FY22 with existing cash reserves, leaving material upside in our expectations from some of its recently developed products such as the Co-Mask and Gipave. We see Directa Plus as an underappreciated, undervalued and more mature and lower risk play in the UK listed graphene and speciality nanomaterials space and initiate with a Buy recommendation and 122p target price.

Companies: Directa Plus Plc

24 Sep 20

Integumen PLC to seek fast-track approval for its new coronavirus breath test

24 Sep 20

SP Angel . Morning View

Atalaya Mining (ATYM LN) – Solar power plan for Proyecto Riotinto | Castillo Copper (CCZ LN) – Drilling planned for the Big One in Queensland | Condor Gold* (CNR LN) BUY – Valuation 102.5p – Director tops up his shareholding | Keras Resources* (KRS LN) – Tesla’s new batteries set to benefit manganese producers Oriole Resources (ORR LN) – Drilling contract awarded in Cameroon | Tietto Minerals (TIE AU) – Updated resource estimate for Abujar expected in mid-October

Companies: ATYM CNR KRS ORR TIE

24 Sep 20

Momentum growing for moderate H2 recovery

In line with expectations, Mauna Kea's ("MKEA") reported a 30% YoY decrease in H1 revenues to €3.2m, reflecting the disruption from the ongoing COVID-19 pandemic. Consumables and system sales were most heavily impacted because of the significant drop in procedure volumes (see our note from July 2020) and reduction in demand for new systems which impacted both direct and distributor sales channels. However, MKEA reported that it expects a bounce back in sales for Q3 & Q4/2020E as a combination of pent-up demand for elective procedures and new sales growth drive a recovery in H2. This is reflected in preliminary YoY sales growth expectations between 2% and 11% for Q3/2020E. We view the chances of renewed and extended interruption to procedure volumes as unlikely, thus do not believe that the ongoing second wave of infection will heavily impact MKEA's recovery in this regard, while the generation of further positive clinical evidence for Cellvizio such as the recent endorsement by SAGES should continue to drive adoption. We maintain and reiterate our OUTPERFORM recommendation and target price ("TP") of €3.10.

Companies: Mauna Kea Technologies SA

24 Sep 20

Upgrades after results and strategic deal

Strix has published reassuring interims and announced the acquisition of LAICA, conditional upon approval from the Council of Ministers in Italy. Against a backdrop of global disruption caused by COVID 19, Strix’s H1 performance is in line with expectations. Net sales down 21% YoY, with a much smaller impact on net profits on the back of strong cost management. Encouragingly, FY 20 profit expectations are now underpinned, at around £28.9m PAT. Taking into account the LAICA deal, we provisionally upgrade FY 21 PAT/EPS by 6%. The shares are already up materially YTD, but the Strix growth story remains compelling.

Companies: Strix Group Plc

24 Sep 20

One of most compelling stocks on AIM

Covid has accelerated the digitisation of all things physical. No more so than in the €10 trillion global construction industry, which some experts reckon has 5 years of catching up to do. A non-insignificant task (eg Crossrail & HS2) that could take decades to play out, but equally realise 100s of £bns of cost, time & productivity savings annually. The €8bn BuildTech sector (10%+ CAGR – see below) is at the heart of this transformation. Providing the glue & ‘digital twins’ that bind all the inter-connected ‘property lifecycle’ parts together – eg CAD/CAM (design), project mgt, visualisation, AI, asset maintenance (operate) and BIM (Building Info Modelling).

Companies: Eleco Plc

24 Sep 20

Strong growth in Bioplastics and £1.1m fund raise

Interim results show that the Bioplastics division is continuing to gain momentum with important new contracts signed, particularly with US-based customers. Existing Group KPIs have been adjusted and extended and are effective through to 2023. If achieved they suggest that the Bioplastics division and the Group would become EBITDA positive by the end of the period. To fund increased spend in the division, the Group is proposing to raise approximately £1.1m (gross) which will be used to accelerate the current project runway, invest in additional manufacturing, boost sales and marketing and support working capital demands. The cyclical Stanelco RF division (RF) continues to suffer from overcapacity in the global fibre optic market and will remain subdued.

Companies: Biome Technologies Plc

24 Sep 20

A resilient H2 and reintroduction of forecasts

Today’s year end trading update from The Character Group (Character) highlights the Company’s resilience and innovation in a challenging international environment with the Group working closely with customers and distributors to maintain trading at satisfactory levels. Indications remain that the second half to August 2020 will produce a profit at least equivalent to H1’s adjusted £2.5m before tax. The Group also has the benefit of a strong balance sheet with significant cash balances and no debt except the usual working capital facilities, much of which remains unused. We are pleased to be able to reintroduce forecasts that were suspended in March due to the uncertainty surrounding the COVID pandemic.

Companies: The Character Group Plc

24 Sep 20

Acquisition of Lake Rebecca Gold Royalty

Trident Royalties Plc (AIM: TRR) has, this morning, announced the acquisition of a 1.5% Net Smelter Royalty (NSR) over the resourcestage Lake Rebecca Gold Project located in the highly prospective Eastern Goldfields province in Western Australia. The royalty package is being acquired from a private seller for a total consideration of A$8.0 million (c. US$5.63 million), comprising of A$7.0 million in cash and A$1.0 million in new ordinary shares in Trident. The acquisition is Trident’s fifth overall and its third gold deal. As per strategic guidance the company is moving fast assembling a diversified portfolio with a paying cashflow stream from iron ore and copper production and several strategic gold royalties with the potential for near term revenues. The market is paying attention with TRR shares up 49.8% since its IPO on AIM in June this year. There is clearly more to come with c. US$7.5 million of uncommitted cash as well as the potential for debt funding and the ability to use equity as acquisition consideration. The Lake Rebecca Gold Project operated and wholly owned by Apollo Consolidated (ASX: AOP), is located 150km ENE of Kalgoorlie in the Eastern Goldfields Province of the Yilgarn Craton. The Project, envisaged as a simple open pit operation, is close to existing gold infrastructure namely Saracen Mineral Holdings Limited’s (ASX: SAR) Carosue Dam Operation whose processing plant is in the process of being upgraded to increase throughput to 3.2 Mtpa.

Companies: Trident Royalties Plc

24 Sep 20

Instrumentalised bank

HSBC’s future should be clarified as soon as the US and China come back to the negotiation table. This will not happen before the US elections are over. In the meantime, HSBC will continue to be instrumentalised and its share price will remain under pressure.

Companies: HSBC Holdings Plc

24 Sep 20

Upgraded guidance

The group’s CEO made reassuring comments at BofA’s annual conference and upgraded the full-year guidance, thus reinforcing our view that the stock’s sell-off is partly undeserved.

Companies: Banco Bilbao Vizcaya Argentaria SA

24 Sep 20

Resilient performance and strong cash generation against difficult rail market, with other divisions growing strongly.

The developer of advanced security and surveillance systems today reported HY June 2020 results. Revenues for the period totalled £7.1m and while down on the same period last year (H1 2019: £8.9m), they were ahead of those for the second half of 2019. Further, the Group recorded adjusted EBITDA of £337,000 and generated net cash from operations of £1.8m, an improvement over the results of the preceding six months (6 months 31 Dec 2019: EBITDA loss £0.9m; net cash generated £0.7m). This positive cash performance reflected a reduction in working capital of £0.7m and the benefit of R&D tax credit receipts of £1.0m. The Group finished the period with an order book of £12m.

Companies: Petards Group Plc