07 Jul 20
Well positioned with excellent growth prospects
Kape’s recent Capital Markets Day (CMD) was an extremely useful update on the many benefits of integrating complementary acquired businesses (including the collaboration between engineering teams) and the opportunities for upselling that new product development brings. Over the last six months, Kape has proceeded with the integration of PIA, expanding the growth of new users through the application of the Group’s user acquisition knowhow and technology. It has also made further enhancements to its product offering which, inter alia, will improve user engagement and retention. This note looks to bring out the main points from the CMD and highlights the significant progress that has been made this year.
Companies: Kape Technologies
07 Jul 20
Cenkos: Seeing Machines Ltd -- USA to mandate DMS from 2024
The ‘Moving Forward Act', the strongest automotive safety bill in decades, has now been passed in the House of Representatives. The bill is focused on advancing safety technologies proven to reduce crash and harm and to make sure strong safety standards are in place to save lives. The bill, which now needs to be passed in the Senate, will mandate automatic braking, lane-keeping, blind-spot detection, event data recorders as well as DMS in all cars and trucks sold in the US from 2024. This aligns with the European General Safety Regulation, which passed into law in November 2019. However, in the EU, the European Association of Automobile Manufacturers (ACEA) has requested a 2‐year delay for the introduction of the 2022 Euro-NCAP protocols due to the projected lengthy time that will be needed to recover from the effects of COVID-19. Euro NCAP has agreed, and a delay is now expected to the 2022 and 2024 rating. The new dates will give automakers and Tier 1 suppliers more time to incorporate the necessary changes given the events of recent months with a number of manufacturers announcing 12 month delays to new models.
Companies: Seeing Machines
01 Jul 20
THE MONTHLY July 2020
A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
Companies: AGY ARBB ARIX BUR CMH CLIG DNL HAYD NSF PCA PIN PXC PHP RE/ RECI SCE SHED VTA
08 Jul 20
When the tough get going
Successful businesses ‘never let a crisis go to waste’. Indeed since an otherwise strong Q1’20 was interrupted by COVID-19, Mpac has further streamlined operations, accelerated R&D and launched new remote equipment diagnostic/acceptance testing, virtual reality & other ‘Industry 4.0’ services.
08 Jul 20
WHI Equity Research: Jubilee Metals (JLP)
Robust, cash-generative production from mining waste Jubilee operates several chrome-Platinum Group Metal (PGM) operations in South Africa and is constructing a zinc-lead (vanadium) plant at Kabwe in Zambia after already commissioning the copper and cobalt circuits (the ‘Sable' refinery). The company has a growth pipeline identified and significant opportunities to find new projects in Africa (or globally); more specifically, Jubilee announced that it is looking to increase its copper (cobalt) production in Zambia aggressively to make full use of the Sable Refinery. Jubilee also owns the Tjate PGM project in South Africa, which is currently on hold. The company model is to treat its own waste materials and to supplement these with third party ores and wastes where possible. This year has been nothing if not eventful for Jubilee, but further progress and material catalysts are expected over the course of 2020. Jubilee has a high-margin business with cash on hand, and we see plenty of opportunities for Jubilee to capitalise on its robust business model through the global Covid-19 crisis and beyond. We initiate with a fair value of 11.2p/sh
Companies: Jubilee Platinum
07 Jul 20
Finally, a change of strategy?
With a new CEO, Amanda Blanc, Aviva’s shareholders could dream of a possible change in the group’s strategy, with a more focused insurance business. The new Chief has an opportunity to take painful decisions in a year where no one will require a high operating performance.
Companies: Aviva Plc
08 Jul 20
Independent review of UK supply chain
Independent review launched: The Boohoo Group has announced the launch of an immediate independent review of its UK supply chain, intended to identify any areas of risk and non-compliance and to further strengthen the Group’s compliance procedures to ensure similar allegations will not recur in the future. The review is to be led by Alison Levitt QC, a highly experienced advocate who has previously reported on complex issues, including safeguarding enquiries. Boohoo has also announced an initial additional £10m investment in ensuring any supply chain malpractice is eradicated and is accelerating its independent third-party supply chain review with ethical audit and compliance specialists Verismo and Bureau Veritas.
Companies: Boohoo Group Plc
09 Jul 20
Exits Native Antigen Company for strong return, heading to evergreen
The Native Antigen Company (“NAC”) has been acquired by LGC for up to £18.0m – with the ongoing COVID pandemic highlighting the value of knowledge and execution in the infectious diseases space. Mercia invested in NAC via both its balance sheet and 3rd party funds. The exit represents a strong return for both sources of capital, validating complete connected capital to optimise value creation. For the balance sheet stake, the £5.2m proceeds represent a £2.5m gain on realisation (c.1.5% of our FY21e NAVps). Final Results will be announced next week, when we will review our forecasts. The shares are currently trading at a 45% discount to NAV (which is 20% cash). Today’s exit demonstrates justification for a much narrower discount, if not a premium, to conservative carrying values.
Companies: Mercia Technologies
09 Jul 20
RBL interim revenues on track for +36% H1, uncertainty elsewhere
RBG Holdings pre-close trading update to June 30th confirms a strong H1 performance for RBL, the Group’s law firm, with revenues up 36% like-for-like to c.£11.4m YoY. Convex, the CF boutique, understandably has faced COVID headwinds, with most of its H1 pipeline deferred indefinitely, whilst Litigation Finance continues to grow its pipeline and financing commitments on a longer term view. Due to continued uncertainty from COVID we withdraw our forecasts this morning, with a view to reinstating once more clarity on H1 outturn and momentum into H2 is available.
Companies: Rosenblatt Group
06 Jul 20
Cenkos: Oil & Gas Sector - Trinity Exploration & Production, Diversified Gas & Oil, UK Oil & Gas Plc, Chesapeake Energy Corporation, Ithaca Energy, Royal Dutch Shell, BP, Reabold Resources, Premier Oil, Energean, Transglobe Energy, Jadestone Energy, Enteq
U.S. futures and European stocks dropped on Friday as investors mulled a reported conflict among policy makers over a stimulus package for the single-currency region, as well as political upheaval in France. The Stoxx 600 Index fell after Bloomberg News reported the European Central Bank is facing a potential rift over how much their emergency bond-purchase program should stay weighted toward weaker countries such as Italy. The euro fluctuated following French President Emmanuel Macron's decision to name a new prime minister after asking his government to resign. Rolls-Royce Holdings Plc slumped after the British jet-engine maker said its exploring options to raise funds to strengthen its balance sheet. The dollar was slightly down, posting its first weekly drop in a month, while American cash equity and bond markets were shut for Independence Day. President Donald Trump will attend an early July 4 celebration at Mount Rushmore with thousands of guests who won't be required to wear masks, while his U.K. counterpart Boris Johnson urged Britons to act responsibly as pubs prepare to re-open and the government lifts quarantine rules on travel for 60 countries. The friction at the ECB highlights the risk to markets should promised stimulus measures fall short. Investors continue to weigh policy support and upbeat economic data against relentless new outbreaks of the virus. U.S payrolls figures Thursday fuelled optimism of a V-shaped recovery in the world's biggest economy, even as Florida reported that infections and hospitalizations jumped the most yet, and Houston had a surge in intensive-care patients. Emerging-market stocks posted the biggest weekly gain in a month. Elsewhere, crude oil dipped but remained on track for a weekly gain.
Companies: TGL JSE IAE ADME BP/ DGOC ENOG NTQ NTOG PMO RBD ROSE RDSA UKOG TRIN
13 Jul 20
Cenkos: Intelligent Ultrasound Group Plc -- Trading update
Intelligent Ultrasound has issued a trading update for the six months to 30 June 2020. The company expects to report revenues (which currently are all generated by the Simulation division) for H1/20E of £2.5m, down on the reported H1/19A revenues of £3.1m due to the impact of COVID-19 on reseller sales, particularly in China and Europe. Importantly, the AI division remains on track to deliver first revenues from its lead programme in 2021, while commercial discussions with OEMs for the second AI software product are continuing. Cash at period end was £10.1m. COVID-19 related uncertainty led us to withdraw forecasts in March 2020 and we remain Under Review.
Companies: Medaphor Group
13 Jul 20
Cenkos: Oil & Gas Sector -- UK Oil & Gas Plc, Hurricane Energy, PetroTal Corp, Equinor ASA, i3 Energy, RockRose Energy, Pharos Energy JKX Oil & Gas, Enwell Energy, Tethys Oil, Spirit Energy
Oil rebounded as a new virus treatment showed promising results, but rising Covid-19 cases continued to weigh on the market. Oil gained 2.4% in New York on Friday but is still down for the week. The market followed stocks higher after Gilead Sciences Inc said its remdesivir treatment cut Covid-19 mortality risk by 62%. Still, the coronavirus pandemic is far from easing around the world and the International Energy Agency said a jump in cases could derail the market recovery. Crude has struggled to extend a recent rally as traders weigh fresh outbreaks of the virus. California, Texas and Florida have recorded some of their biggest daily gains in cases and deaths this week. There is a growing risk that a resurgence will impede efforts to reopen the economy. While the IEA said demand should rebound sharply over the next three months as economic activity resumes, the agency also warned a flare-up of the virus, which is raging across several US states and re-emerging in Asia, is “casting a shadow over the outlook”. Prices West Texas Intermediate for August delivery rose 93 cents to $40.55 a barrel in New York. Brent for September settlement gained 89 cents to $43.24 a barrel. Heavy Louisiana Sweet crude rose 30 cents to $2 a barrel above Nymex. That is the highest premium since May. Supply could also become more abundant as Libya's National Oil Corp announced it would lift force majeure on all exports following months of near-zero shipments. The Kriti Bastion tanker has started loading 730,000 barrels of crude at Es Sider, with the cargo heading to Italy, according to port operator Waha Oil Co. Rigzone.
Companies: FOG PVR 88E DGOC EME TRIN UOG
13 Jul 20
A solid Q2 report that should support recovery
Q2/20 EPS came in at NOK 3.06, 275%/125% above ARCe/consensus Impairments roughly half our estimate at NOK 2.1bn in Q2 Stage 3 provisions within the oil, gas and offshore segment primary driver CET1 of 18.2% versus our 17.4% estimate (19.4% including ‘19 DPS)
13 Jul 20
Strong result driven by Foods and Snacks
Adjusted Q2/20 EBIT of 1,143m vs. Factset consensus of NOK 1,111m Q2/20 revenues of NOK 11,099m, up 5% Y/Y, in line with consensus Hydro Power reported negative EBIT for the first time Profit from associates and joint ventures (Jotun) holding up well
13 Jul 20
Safe cash flows should be valued higher
Given the large share of creditworthy tenants on long leases and limited exposure to the industries most affected by COVID-19, a liquidity reserve covering the ST debt by 2.4x and continued solid access to funding as well as an overall strong financial position, the downside risk is in our view limited. While the market outlook is still uncertain, Entra continues to show strength by paying out dividends and we find the current trading discount unwarranted. Buy reiterated.
13 Jul 20
Increased focus on development activities ahead
Whereas revenues and NOI came in higher, value write-downs took EPS into negative territory and there were no dividends for the second consecutive quarter. The main piece of news was the acquisition of Veidekke Eiendom which will help increase EPS ahead, but which also may be dilutive for the current shareholders given the August EGM, aiming to issue up to 20% more shares (in addition to the 10% authorisation already in place). Hold, TP of NOK 12.50 reiterated.
Companies: NORWEGIAN PROPERTY
13 Jul 20
Stable set of results in Q2
Corem’s Q2 report was neutral from a credit perspective with earnings coming in more or less in line. Credit metrics generally improved y-o-y, but the outcome was mixed vs. estimates. The liquidity reserve of SEK 1.3bn is comfortable, there are no bond maturities in 2020 and the impact of COVID-19 continues to be limited. We reiterate our market perform recommendations on the outstanding bonds.
Companies: Corem Property Group Ab-A
13 Jul 20
Q2 first read: Record order backlog up 80%y-y
Q2 revenues slightly ahead of recent profit upgrade with a strong margin 26% y-y revenue growth, with 25% growth in BLE and 30% in proprietary Order backlog up 80% y-y (and 64% q-q) supports strong 2H/20 revenues We expect a positive share price reaction and will increase our estimates
Companies: NORDIC SEMICONDUCTOR
12 Jul 20
Staying put amidst uncertain times
Tesco’s share price has declined over the past few weeks, and this is despite announcing strong Q1 results. While FY20/21 is likely to be a tough year (benefits of high sales volume and business rate relief offset by the spike in pandemic related expenses), we reiterate our faith in the business strength of the retailer.
10 Jul 20
Impaired Wintershall Dea
BASF’s preliminary Q2 figures were characterised by a slightly better than expected operating and earnings performance before one-offs, but were hit by the negative effect from the impairment in the oil & gas business. The latter submerged the preliminary profitability figures to below our expectations. Consensus was also not meet on net earnings.
10 Jul 20
Shortsighted or too cautious?
We still have not made up our minds and it will be quite challenging to come to a conclusion without additional information. Nevertheless, the preliminary figures guide to a stronger than expected Q2. Even profitability was far better but, without additional details, it is quite difficult to see where the performance stems from. Preliminary figures were marginally above our estimates, but beat consensus at the profitability level.
10 Jul 20
HSBC's parents divorce
Beijing’s forced implementation of the Hong Kong security law threatens the region’s financial hub status. This is a potential game-changer for HSBC but it does not seem to come as a surprise for the group as confirmed by the acceleration of its investments in China or its efforts to secure a leading position on the RMB.
10 Jul 20
Morse code for outperformance in Europe – executive interview
10 Jul 20
Inspired Energy raises up to £35mln in placing and open offer and fully acquires Ignite Energy
18 Jun 19
Verditek - Interview with Verditek Chairman, Lord David Willetts
19 Jun 20
Ncondezi Energy reveals latest progress on Tete power project in Mozambique
30 Jan 20
Equals Group PLC chief 'phenomenally bullish' about prospects as revenues rise 20%
19 May 17
Leading UK fund manager, Gervais Williams, discusses investing, his outlook and two companies he's excited about
21 Oct 19
Avacta Group PLC boss sees a huge opportunity with new version of cancer treatment
07 Jan 20
Volex PLC Investor Presentatiion
21 Mar 18
Bitesize briefing – Vermillion Energy
07 Jan 20
Checkit PLC Investor Evening
16 Jan 20
Greatland Gold - Outlook for 2020
18 Nov 19
CentralNic's acquisition of Team Internet to be 'significantly earnings enhancing'
23 Nov 16
Armadale Capital - Full assay results confirm exceptional high-grade graphite deposit
02 Dec 19
Investor Update: Hurricane Energy makes another discovery with Warwick West well
09 Oct 18
Arena Events Group plc Investor Overview
23 Jan 20
Executive interview - Sureserve
14 Apr 16