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21 Oct 20

SP Angel Healthcare Conditions- Novacyt (NCYT.L): Initiation of Research

Novacyt Initiation of Coverage: Through the rapid commercialisation of a COVID-19 test, Novacyt has transformed its financial position. Demand for the Group's COVID-19 test and other COVID-19 reagents are expected to make up the majority of revenue generated until FY22E, whereupon the Group is looking to drive long-term growth across its business via the development of high-margin clinical diagnostics and establish itself as a leader in infectious disease testing.

Companies: Novacyt SAS

15 Oct 20

Strong trading update

The Group has issued a trading update ahead of its interim results due on 12th November 2020. Overall, the first half has seen a strong recovery in activity and the Board now expects to report H1 revenues and operating profit of at least $200m and $20m respectively. This is materially ahead of market expectations and with a high degree of visibility through Q3 FY2021E we are upgrading our operating profit forecasts by 39% and 25% for FY2021E and FY2022E respectively. The Group is seeing strong growth in EV charging cables and bespoke high-performance cabling solutions, and consumer electronics demand has also remained robust. Together with investment in automation and cost efficiencies, the Group operating margin is now 10%, which is a testament to management’s operational and strategic focus. The shares trade on an FY2021E EV/sales multiple of 0.9x which compares to a sector based multiple of c.1.2x for companies with comparable operating margins and growth.

Companies: Volex plc

19 Oct 20

Bioventix - FY 2020 results

Bioventix reported a strong set of full-year results, that were 8% above expectations, assisted in part by a c.£0.2m (+3%) FX benefit, which helped offset the obvious drag on performance in Q4 due to the impact of COVID-19 on routine testing in hospitals. A 53p special dividend was proposed, resulting in a full-year dividend of 141p, up 18%. Due to the COVID-19-related disruption to testing, which only exacerbates the poor visibility to customer royalty streams, we are withdrawing forecasts until normality returns. That said, the business remains in very good shape, with evidence that: (i) high sensitivity troponin is gaining momentum; (ii) physical antibody sales growth remains robust (+34%); and (iii) progress in its development pipeline (particularly pollution monitoring programme) is being made. The business is expected to remain cash generative, and with c.£8.1m of cash at 30 June, the company is a strong position to weather this period of disruption before returning to growth.

Companies: Bioventix Plc

21 Oct 20

WHI Morning Comment: Spectra Systems (SPSY) - Significant Contract Announcement – Central Bank secured

Spectra Systems Corporation, a leader in machine-readable high speed banknote authentication, brand protection technologies, and gaming security software, has announced that it has executed a comprehensive services contract with a ‘long standing' central bank customer for the development, manufacture and servicing of a sensor system. The initial development phases underpin our FY2021E estimates (with risk likely to the upside), but moreover, the balance of development work, comprising supply of sensors (estimated value up to $34m in 2024-25), servicing revenues ($7.5m) and resultant high margin material sales through to at least 2035, provides significant underpinning of future prospects. Our updated Sum-of-the-Parts valuation (reflecting higher than anticipated development revenues and margins) indicates a risked fair value of 240p (from 200p).

Companies: Spectra Systems Corporation

19 Oct 20

Highly scalable platform in growing self-care brands

Venture Life aims to become a global leader in the self-care branded product market, where there are a number of structural growth drivers. It has a unique and scalable platform to develop, manufacture and distribute products, including its own brands and international customers’ brands. What is already a high margin business is poised to deliver a compelling mixture of top line growth with significant operating leverage. Performance in H1 (EBITDA +347%) highlights the potency of VLG’s model. Acquisitions can also leverage the platform to drive growth, and management has a very strong track record here. On top of this exciting growth play, there is also a chance that its Dentyl dual-action mouthwash could have applications to slow/reduce CV19 transmission, adding to the upside potential.

Companies: Venture Life Group Plc

21 Oct 20

Tremor - Strengthening momentum drives FY20 upgrades

Tremor has announced in today’s trading update that its platform has continued to gather further momentum since H1 20 results on 22 September, and it now expects FY20 revenue and EBITDA to be in the range of $340-360m for revenue and $30-36m for EBITDA. This leads us to upgrade our FY20 revenue forecasts by +6% to $350m from $330m, and upgrade our FY20 EBITDA by +32% to $33m from $25m at an incremental margin of 40%. This reflects that Tremor’s platform benefits from strong operational gearing that translates to EFCF, and we increase our FY20 net cash to $79m from $71m. This strengthening momentum for Tremor’s differentiated platform reflects that it is capitalising upon a rebound and shift in advertising spend through the success of the initiatives it launched in 2019 and the successful integration of Unruly, and we explain these factors in more depth from p9 of our 22 September report. Today’s announcement also marks the second upgrade to our Tremor forecasts since COVID-19 impacted the advertising market and Tremor in Q2, and this reflects that Tremor has adopted a prudent approach to its guidance. Applying a similar approach to our estimates, we conservatively do not change our FY21 forecasts, and this means that we continue to forecast FY21 organic revenue growth to $420m or +20% YoY, with organic EBITDA growth to $55m or +67% YoY. This conservative, strong FY21 organic growth means that Tremor looks substantially undervalued on 7x FY20 EV/EBITDA or 5x NTM, and a NTM EFCF yield of 6%; vs peers on 13-19x EV/EBITDA with NTM EBITDA growth of 18-47%, and EFCF yields of 1-2%.

Companies: Tremor International Ltd.

19 Oct 20

Tristel - FY 2020 results

Full-year results were 4% above expectations, with revenues and adjusted pre-tax profit rising 21% and 27%, respectively, boosted in part by acquisitions in FY 2018 and 2019 but also from COVID-19 related buying, particularly Cache surface disinfection products. We raise FY 2021 adjusted pre-tax profit by 3% to £7.2m and introduce FY 2022 forecasts, which point to c.11% EPS growth. FY 2021 growth is held back by the stated c.£0.75m commitment to developing a fuller pipeline of products to take to the FDA/EPA and Canada Health. We view this as a strong endorsement of the progress that has been made to date. We also lift our target price to 500p on the back of a small FY 2021 upgrade and outlook for growth in 2022, supported by renewed commitment and resourcing for North American regulatory approvals.

Companies: Tristel Plc

21 Oct 20

Cenkos: Seeing Machines Ltd -- MOU with L3Harris Technologies

Seeing Machines has announced that it has signed a non-binding Memorandum of Understanding with global aerospace and defence technology company L3Harris Technologies. The MOU frames the intent to enter into a global non-exclusive license agreement to enhance pilot training technology with Seeing Machines's dedicated precision eye-tracking system for flight crew training in the full flight simulator (FFS) environment. A license arrangement is currently in advanced discussions between the parties and subject to the negotiation and execution of definitive, binding licensing and other legal agreements. Further announcements regarding the progress of the negotiations in relation to such binding documentation will be made when appropriate.

Companies: Seeing Machines Limited

20 Oct 20

Open Orphan - £10m COVID-19 challenge contract with UK Govt

ORPH has signed a contract with the UK Government for the development of a COVID-19 human challenge model. This will involve manufacture of the challenge virus and a first-in-human characterisation study. The contract begins immediately and is likely to be worth c.£10m. The government has also reserved the first three slots to test vaccines using the challenge study at a total cost of £7.5m. We revise our forecasts and increase our SOTP target price to 28p (range 25-31p), reflecting ORPH’s world-leading position in traditional challenge models, and now COVID-19 challenge models, with additional upside from the potential development of new challenge models, the monetisation of valuable challenge model data and the potential sale of its non-core pharmaceutical assets.

Companies: Open Orphan Plc

14 Oct 20

SP Angel Healthcare Conditions

Kromek (KMK.L): New R&D project in cancer surgery

Companies: Kromek Group Plc

16 Oct 20

Synairgen - £80m funding for COVID-19 study and supply chain

Synairgen has raised £80m to fund a Phase III trial for SNG001 in COVID-19 disease, which is due to commence in Q4 2020 and will be run globally by Parexel, with results expected in Q2 2021, and scale up manufacturing. This follows a successful pre-IND meeting with the FDA, which provided the guidance to commence such a study. Assuming that this trial replicates the results seen in the 100-patient Phase II trial, we would expect Emergency Use Approval (EUA) to follow shortly thereafter. Meanwhile, the Managed Access Programme (MAP) in the UK and Europe, run by Clinigen, could generate early commercial revenues. We have made adjustments to forecasts to reflect these costs and raise our SOTP rNPV target price to 420p, which could rise further should stockpiling orders be received.

Companies: Synairgen plc

14 Oct 20

Mercia Asset Management - Life sciences helping the COVID-19 fight

Life sciences is one of Mercia’s areas of focus and investment expertise. Seven of Mercia’s top 20 holdings at 31 March 2020 were in life sciences, valued at £29m in aggregate or 33% of total portfolio value (all of which had originated through Mercia’s third-party managed funds), with another c 40 earlier-stage life sciences investments across its third-party managed funds. COVID-19 has accelerated the opportunity for a new generation of novel and recombinant vaccines. This explosion of potential new treatments will require new diagnostics and bio-manufacturing support to scale supply once they are approved. These are areas where Mercia is already invested.

Companies: Mercia Asset Management PLC

20 Oct 20

Open Orphan* - Material UK Government COVID Study Contract

Open Orphan has announced a contract with the UK Government to develop and perform the UK's first COVID-19 (COVID) human challenge studies. The multi-faceted agreement provides strong endorsement and validation of hVIVO's capabilities, with material revenues driving forecast upgrades and further upside risk to earnings as pipeline conversion continues and industry awareness and penetration of challenge studies accelerates.

Companies: OPORF ORPH CRO VENN

20 Oct 20

Solid State - Encouraging H1 trading update

The group’s H1 trading update is reassuring, with a strong first half, pointing to a continuation of previously indicated trading patterns. Revenue and profit has been resilient, while cash flow has been strong, returning to normalised patterns having repaid PAYE and VAT and also its final dividend in September. H1 trading benefited from a strong order book heading into the lockdown and due to some delays in order intake over recent months has an order book around 7% less than last year. Management is cautiously optimistic, but still considers that the trading outlook remains uncertain, so guidance remains withdrawn. As such, we look to the December interims to resume forecasts, when order visibility will be clearer.

Companies: Solid State plc

20 Oct 20

Cenkos: TP Group Plc -- Interim Results

TP Group (TPG) delivered robust organic growth of 13% during H1/20A. However, the impact of COVID-19, together with increased investment and a shift in business mix, meant that Adj EBITDA reduced by £0.9m YoY to £1.4m. TPG has today announced it is in advanced discussions to dispose of its non-core oil and gas focused engineering business. Despite the strong and expanding order book, COVID-19 continues to create uncertainty around the timing of contract deliveries. As such, our forecasts remain withdrawn and our rating Under Review.

Companies: TP Group Plc

21 Oct 20

Record - AUME growth prompts estimate increases

Record’s Q221 trading update confirmed that its new $8bn dynamic hedging mandate has started and that, prior to this, assets under management equivalent (AUME) expanded by 4% in the quarter. The group continues to work on developing new products and is deploying technology to enhance its ability to deliver these and existing products cost effectively.

Companies: Record plc

21 Oct 20

AEX Gold say 'significant potential for expanding the resource base at Nalunaq'

21 Oct 20

9M 20: Vinci enjoyed a pleasant summer

Vinci had a good summer, with Q3 contracting activities and autoroute traffic almost back to last year’s level. Management continues to believe that there will be a significant reduction in the full-year results but has not downgraded its guidance, which was last updated in July, except for airports where it now assumes a traffic reduction of 70%. Post the trading update, we have made minor tweaks to our model which had no impact on our recommendation.

Companies: VINCI SA

21 Oct 20

Better than expected resumption

Randstad beat the consensus in Q3 20 with a decrease in organic revenue of 13% and an underlying EBITA margin of 3.9% of revenue (-1.1pt). Randstad performed well in North America, the Rest of world and Italy, all where the decrease in organic revenue was below the group average. Randstad had a strong free cash flow thanks to the positive impact of the CICE subsidy collection in France.

Companies: Randstad NV

21 Oct 20

Q3 20: fuelled by China and market share gains

Ericsson released strong results, benefiting from the rollout of 5G networks across the US and China as well as market share gains in Europe. This was also a clear beat over the consensus in terms of profitability, sustained by the improving margin in Network. Going forward, the company maintains its financial objective for both 2020 and 2021.

Companies: ERICB ERICB ERCB ERIBR ERIXF

21 Oct 20

Cenkos Securities - Strong activity and lean cost base

Cenkos’s first half results demonstrated the benefits of its flexible operating model and strength of its client relationships. While challenges related to COVID-19 are set to continue, Cenkos’s focus is on growth companies and its fund-raising year-to-date has had a greater emphasis on corporates financing M&A and growth opportunities rather than for defensive purposes. This should prove more sustainable although, as always, the timing of transactions in the encouraging pipeline reported remains uncertain.

Companies: Cenkos Securities plc

21 Oct 20

MetalNRG says Lake Victoria Gold acquisition bid 'ticks all of the boxes'

21 Oct 20

The next shareholder wellness programme

Akzo’s management seems to have successfully obtained the qualification as feel-good manager. An additional €300m in cash will be spent to buy back shares. Was there an alternative? How about bolt-on acquisitions? 9M organic growth is still negative, despite some vital signs in Q3. Where the company is really going and where a sustainable growth momentum will come from remain unclear. The reported figures were a notch weaker than expected. Street expectations were slightly beaten.

Companies: Akzo Nobel N.V.

21 Oct 20

SP Angel . Morning View

AEX Gold Inc (AEXG LN) – Gold mineralised structure extends to depth at Nalunaq in Greenland | Alba Mineral Resources (ALBA LN) – Progress at Clogau not affected by Covid-19 | Anglo Asian Mining* (AAZ LN) - BUY –Earnings update Antofagasta (ANTO LN) – Q3 report highlights 4.6% output drop | Atalaya Mining (ATYM LN) – Acquisition of 66mt VMS deposit 28km from Proyecto Riotinto | Centamin (CEY LN) – Quarterly production update and revised FY20/21 guidance | Petra Diamonds (PDL LN) – Tender process announced for collection of five blue diamonds | Premier African Minerals* (PREM LN) – £1.1m placing SolGold* (SOLG LN) – Strengthening the board

Companies: AEXG ALBA AAZ ATYM CEY PDL PREM SOLG

21 Oct 20

Mosman Oil & Gas says Falcon-1 well has come in 'better than expectations'

21 Oct 20

Symphony Environmental Technologies' calls algae project in France 'significant step forward'

21 Oct 20

Better everywhere...

Handelsbanken (SHB) released its Q3 20 numbers this morning. Numbers were above expectations across-the-board. Total revenues were indeed above expectations, whereas expenses and loan losses were below consensus forecasts. The CET1 ratio at 19.4% was 70bp higher qoq. The 160bp impact from the increase in UK RWA will come into force in 2021. It remains unknown whether the Swedish FSA will reduce capital requirements on the other side (currently at 14%).

Companies: SHBA SVNLF SHBA SVHH

21 Oct 20

Good Q3 and M&A operation

Iberdrola realised an overall good Q3. The figures are in line with expectations and the group expects an acceleration in Q4. In addition, the negative elements are, for the most part, non-recurring. Iberdrola also announced the start of negotiations to acquire fully PNM Resources, an integrated utility operating in New Mexico and Texas, for $4.3bn. We confirm our positive view, even with a limited upside.

Companies: Iberdrola SA

21 Oct 20

EML Payments - Storing up value

EML Payments is a specialist payment solutions provider with a focus on the prepaid market. The group’s strategy is to use acquisitions supported by organic development to establish strong positions across a diverse range of use cases and markets. EML now operates in 28 countries and has grown revenues at a five-year CAGR of 53%. While COVID-19 has slowed the pace of growth in the short term, the business is well-funded and remains profitable and cash generative. The launch of Project Accelerator is designed to keep EML at the forefront of innovation in payments technology and to support the company’s aim to be ‘the fintech’s fintech’.

Companies: EML Payments Ltd.

21 Oct 20

Oil & Gas Daily Flow

Nosta Terra Oil & Gas (NTOG LN): Comprehensive operations update points to high margin production | Europa Oil & Gas (EOG LN)- License extension at Inezgane

Companies: Nostra Terra Oil & Gas Company PLC (NTOG:LON)Europa Oil & Gas (Holdings) plc (EOG:LON)