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07 Apr 20

LIBERUM: Plus500* - Making the most of the opportunity

The record 1Q20 performance is due to more than just favourable market conditions. It also reflects the benefits of the group’s best-in-class platform, which continues to deliver despite lower leverage limits. Its scalable technology and agile marketing algorithms has enabled it to add 83k new users during the period, at less than half our forecasted AUAC. This dynamic, combined with the quality of these users, sees us upgrade FY20 PBT by 26% and positions the group to continue to deliver profitable growth in the medium-term. Despite this the shares trade on just 9.0x CY21 earnings, and as a result we reiterate our BUY rating and increase our TP to 1500p (from 1450p).

Companies: Plus500

07 Apr 20

The Promised Land

Red Dwarf, the very British sci-fi comedy franchise, ran for 11 seasons – most recently in 2017; and The Promised Land is a feature-length TV movie – out this year. Yes, the programme is an acquired taste. Strangely, too, many episodes are impacted by a virus or three (physiological, not main-frame).

Companies: WJG BKG CSP CRST MCS INL BDEV RDW GLE SPR TW/ PSN VTY GLV CRN ABBY BWY

08 Apr 20

More Q4 contract wins reveal a switch to SaaS

The YE trading update reveals that management has actioned its proposed switch from a perpetual licence to a SaaS business during FY 2020. We therefore adjust our forecasts as moving customers from one-off perpetual licence contracts to recurring revenue contracts takes longer to implement and revenue is recognised over a longer period. Despite COVID-19, D4t4 made good progress in Q4 since the January update (with its own raft of contract wins), and several more contracts have been secured on a multi-year ‘as-a-service’ basis, providing additional recurring revenue visibility (now 46% of total sales) over the next three years. Management does not expect any significant interruptions in customer service or its distribution channels. However, actions taken to mitigate the impact of the virus include home working; preserving cash; and securing additional liquidity from the bank if required. The final dividend and FY 2021 forecasts are under review, however the £0.5m share buyback programme continues.

Companies: D4T4 Solutions

07 Apr 20

Defensive in the face of Coronavirus threat

Residential for rent developer and manager Watkin Jones traded strongly in H1 but faces inevitable disruption on its student housing and build-to-rent developments, according to last week’s pre-close update. However, we believe its established defensive qualities are demonstrated by its net cash position, forward sold position and ‘capital-light’ model. Although it has withdrawn guidance, we believe it is strongly placed to return to growth when the virus abates and could exploit widespread land opportunities.

Companies: Watkin Jones

03 Apr 20

Supercharging customer data with an expanded Audiens

Bango has announced the expansion of its strategic relationship with NHN Corp, the Korean big data giant. NHN is investing £6.5m to take a majority interest in the Audiens business, owned by Bango. For its investment NHN gains a 60% stake in Bango Deep, the Bango subsidiary which owns the Audiens Customer Data Platform (CDP). NHN will inject its data science technology into Audiens to grow it into a world leading CDP. In addition, NHN has also subscribed for 3.5m new ordinary shares in Bango – 4.7% of the group’s existing ordinary share capital. Bango paid approximately £4m for Audiens. NHN is paying £6.5m for 60% of that business. We revise estimates following the announcement to reflect that Audiens will no longer be fully consolidated in Bango’s accounts. We believe the deal validates Bango’s investment in Audiens and represents a significant vote of confidence in both the data monetisation business and in Bango itself, by a highly successful commerce leader.

Companies: Bango

06 Apr 20

LIBERUM: SigmaRoc* - Strong liquidity position and cash flow maximisation

SigmaRoc has issued an update on the impact of Covid-19 containment issues. It is adopting a pragmatic approach, operating facilities where this can be done safely and in compliance with government guidelines, and subject to demand (which continues to come from maintenance, agriculture and infrastructure).

Companies: Sigmaroc

09 Apr 20

Hurricane Energy

Forecast update

Companies: Hurricane Energy

03 Apr 20

Bango - Finding a new Audiens

In a remarkable coup for Bango, Korean technology leader NHN Corp is taking control of the Audiens Customer Data Platform (CDP) business by investing £6.5m for a 60% stake in the holding company, Bango Deep Ltd, with a view to scaling up Audiens through support and technology into a truly world-class CDP provider. NHN is further securing and deepening its relationship with Bango itself by taking 3.5m Bango ordinary shares (4.7% of the expanded Bango) for £3.2m. This is an excellent deal for Bango, sealed at a time of restricted travel and tightened commercial prospects and possible only because Bango is already partnered, and trusted by the Korean technology giant. The deal takes a non-core, near-breakeven business off the Bango P&L and sharpens management focus, while maintaining a substantive interest in what – now backed by NHN’s cash, expertise and data technology – should become a major global player in the lucrative, high-growth CDP market. On top of this, Bango strengthens its balance sheet with a cash injection and the strategic partnership between NHN and Bango itself is substantively deepened. We adjust our FY 2020 forecast for the change in Audiens accounting status and the cash injection, and highlight the value.

Companies: Bango

07 Apr 20

Intense period of Business Development

OptiBiotix ("OPTI") recently announced a number of new commercial agreements for marketed functional food ingredients SlimBiome and LP-LDL. These new agreements take the number of commercial deals for both products to 57 and include a mixture of new distribution and manufacturing agreements, not only increasing the number of countries where products containing OPTI's ingredients are sold to over 70, but are also anticipated to improve profitability through the renegotiation of manufacture deals which provide OPTI with greater control over the value chain. OPTI's ability to continue to sign commercial agreements despite the ongoing disruption related to the COVID-19 crisis is impressive, in our opinion, and the company continues to build momentum in a year when we expect existing agreements to start generating substantial revenue streams. We maintain our OUTPERFORM recommendation, trimming our target price to GBp 93 (from GBp 97).

Companies: Optibiotix Health

08 Apr 20

SP Angel Healthcare Conditions

Novacyt* (NCYT.L): COVID-19 test included in WHO procurement list and collaboration with AstraZeneca, GSK and University of Cambridge | Avacta (AVCT.L): Collaboration with Cytiva to develop a COVID-19 test

Companies: Novacyt Avacta Group

07 Apr 20

LIBERUM: Codemasters* - H2 profits ahead of forecasts

A FY20 trading update reveals the further accelerating shift to digital in H2, delivering EBITDA 16% ahead of our FY forecast. We have made some modest revisions to our FY21 forecast given the lack of live Sunday racing, but the reception for replacement Esports events has clearly been very positive; we also await news on the release date of the Fast and Furious game. The shares have returned to an unjustified c40% discount to the sector which we expect to close as game release dates are confirmed, and the Company benefits from the wider sector trends as stay-at-home consumers look for entertainment.

Companies: Codemasters

08 Apr 20

LIBERUM: Frontier Developments* - Key takeaways from the investor call

Yesterday management hosted a call with investors to provide an update on the business and wider sector trends amidst the ongoing COVID-19 pandemic. The discussion centred around: (1) changes in current player habits and how the company is benefitting, (2) a successful transition to the WFH model and limited impact on the release schedule, (3) the increasingly visible and diverse pipeline, (4) strong momentum in 3PP, and (5) the counter-cyclical potential of the games industry. Whilst we make no changes to our forecasts today, we believe that the current environment provides scope for upside surprise throughout the wider sector and we expect companies like FDEV to continue to re-rate as the market prices in that opportunity.

Companies: Frontier Developments

06 Apr 20

One to hold in tough markets

CentralNic's business is resilient in the current environment. The company has mostly repeatable revenues and sells mission-critical products, diversified across many customers and countries. Market growth is robust, benefiting from the recent surge in online activity and regulated price increases. Competitively, the company is well positioned, dominating its core markets. Financially, the company has adequate financing and has not experienced any increase in late payments. CentralNic’s resilience is reflected in a confident trading update this morning.

Companies: Centralnic Group

06 Apr 20

RBG Holdings

Solid Trading Update

Companies: Rosenblatt Group

06 Apr 20

SP Angel Healthcare Conditions

Novacyt* (NCYT.L): COVID-19 test update | Futura Medical (FUT.L): Confirmation of FDA minutes

Companies: Novacyt Futura Medical

10 Apr 20

The Hardman & Co Lockdown Compendium

We live in truly unprecedented times, and it remains unclear when, or how, we will return to what will be the new normality. 2020 marks the 41st year of my career in the stock market. I have seen several meltdowns during that time (I am one of the few people still working who lived through Big Bang in 1986), but even I have never experienced such a comprehensive market collapse caused by a pandemic, accompanied by such a virtually total shutdown of economies across the world. I have learnt, however, that it is especially important at times of crisis to avoid being sucked into shorttermism, to which the sheer onslaught of news lures investors.

09 Apr 20

Severe turbulence expected

Norwegian will hold an EGM on 4 May and proposes several initiatives: a NOK 400m private placement, conversion of all or parts of its bond/lease debt and authorization to issue new shares and convertible loans. The current market cap of NOK 1.4bn compares to the nominal bond and lease debt of NOK 44.5bn and a potential dilution will be significant. We suspend our Hold recommendation as the outcome is uncertain and Covid-19 and lower GDP prospects add risk.

Companies: NORWEGIAN AIR SHUTTLE AS

09 Apr 20

SDCL Energy Efficiency Income Trust on track to achieve target dividend of 5p

09 Apr 20

SCE raises COVID fighting fund

SCE has raised £1.3m (net) to fund working capital in case the business is materially impacted by the pandemic. It is also looking to raise a further £0.3m in an open offer. Recent results highlighted that trading was strong and in line with expectations; however, the pandemic clearly increases the risks to our FY2020E forecasts and, given the current elevated uncertainties, we have decided to put our forecasts and target price under review. We would highlight that commercial progress has been strong over the last twelve months and that, in our view, the long-term growth story remains intact.

Companies: Surface Transforms

09 Apr 20

Edison Think Tank #2 – COVID-19: The race is on

09 Apr 20

Treatt - Demonstrating its resilience

Treatt has had another successful half year, and the COVID-19 pandemic has, to date, had no adverse effect on the business. As previously stated, the sharp fall in citrus prices during FY19 has continued into H120, hence H1 revenue is down 5.6% at constant currency. There was good growth in the other parts of the business, with tea and health & wellness as the standout performers. Building work on the new UK site has slowed due to the COVID-19 pandemic, and at this stage guidance is for relocation to be in 2021, ie a c three- to six-month delay vs previous guidance of Q420. Our forecasts and fair value remain unchanged at 530p.

Companies: Treatt

09 Apr 20

The day is coming

Asos has announced better than expected H1 20 results, however, the group saw sales dropped 20-25% in most recent weeks due to the anti-pandemic measures imposed. To prepare for this unpredictable COVID-19-led business contraction better, the group has placed 15.8 million new shares at £15.60/share. Such a placing is the first in the European fashion retail sector since the COVID-19 outbreak but we believe that will not be the last one.

Companies: ASOS

09 Apr 20

Eden Research CEO hails product approvals in Italy and Spain for organic farming

09 Apr 20

Immotion Group looking to re-purpose business to come out stronger and faster post lockdown

09 Apr 20

PlanarTECH's Ray Gibbs talks widespread applications of graphene and opportunities in diagnostics

09 Apr 20

EQS Group - Making progress

EQS Group delivered FY19 revenue and EBITDA in line with market expectations and is making good progress in its transformation to a cloud-based provider of corporate compliance and investor relations solutions. There are some effects of the COVID-19 pandemic that play to EQS’s strengths, such as hosting webcasts and virtual AGMs. However, the current dearth of IPOs and longer-term likely increase in corporate insolvencies reduce the potential client pool. We currently maintain our revenue and profit forecasts for FY20 except for some small adjustments post FY19, mindful that we may need to review forecasts as the economic situation clarifies. The valuation remains well below peers and DCF.

Companies: EQS Group

09 Apr 20

Airnow PLC to begin trading soon in London after merger sees enlarged group trading profitably

09 Apr 20

Skin Elements Ltd's Peter Malone unveils world-first all natural anti-viral sanitiser

09 Apr 20

Terminating coverage

We started to follow Heidelberger Druck almost 15 years ago. At that time, the shares traded at around €20 but they fell into penny-stock territory briefly in 2019 and genuinely in 2020. During these years, the company accumulated net losses of more than €500m and the EPS numbers were positive in seven but negative in six of these years. Simultaneously, revenue collapsed from €3.8bn to €2.5bn and the workforce was cut from almost 20,000 to less than 12,000.

Companies: Heidelberger Druckmaschinen