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13 Feb 20

Y/e trading update – sales ahead, cash in line

Checkit has provided an encouraging year-end trading update to January, disclosing sales of £11.8m, 5% ahead of forecasts, equivalent to +3% LFL growth (group basis), or +8% (ex. EET; non-core). Cash is also reported at £14.3m – ahead of forecasts, but distorted by non-trading activities. After adjusting for both, we believe the underlying cash position is £12.4m – in line with forecasts, in turn implying that CKT’s investment program (and resulting cash burn) is proceeding as anticipated. The update also splits out Checkit Europe’s and Checkit UK’s sales. While such segmental reporting will not be continued, it is reassuring to note that Checkit Plc has acquired a company (now branded ‘Checkit UK’) in good financial health, as it grew pro-forma sales 7% y/y to £11.6m. Checkit Europe meanwhile grew more strongly, at +30% (but off a low base) to £1.3m. Looking forward, y/e pro-forma sales of £14.8m compares against £17.2m expected in FY21E, implying 16% growth. Driving this, we expect Checkit’s landmark contract win with BP (announced Oct-19) to be a material driver. To remind, Checkit won a three year deal to provide its Real Time Operations Management capability to BP at 320 sites. Naturally, we viewed this announcement very positively – as it provided validation of Checkit’s proposition (at an enterprise scale). We look forward to future news flow, confirming the roll-out is going to plan and - potentially - ‘sub contract wins’ also, as the contract may be extended beyond BP’s (320) owned sites, to dealer-owned sites and internationally also. N/c to forecasts.

Companies: Checkit

12 Feb 20

LIBERUM: Plus500* - Q4 stronger than thought

Q4 saw $100m of revenues ex customer P+L. The company will return 100% of 2019 profits to shareholders through dividends and buybacks, has $293m net cash, and may seek targeted acquisitions, new licences and product extensions.

Companies: Plus500

11 Feb 20

Cenkos: Arena Events Group Plc -- Interim results

Despite the challenging market environment, Arena has delivered interim results that were broadly in line with our expectations (Adj EBITDA of £16.6m vs £17.0m forecasted). Cost saving initiatives are being implemented, which should support margins going forwards, whilst the company is expected to benefit from some significant contracts due for delivery in FY21E.

Companies: Arena Events

12 Feb 20

Scapa Group

FY20 trading update – trading profit “significantly below expectations”

Companies: Scapa Group

12 Feb 20

The Industrial Revelation

UK GDP in line with Dec construction beat but manufacturing miss, Japanese machine tool orders fall 36% y/y in Jan, Boeing nets no orders in Jan

Companies: HAYD HILS JHD OXIG RSW RNO SCPA TWD ZTF SOM GHH

17 Feb 20

CloudCall

New CRM partnership with Vincere

Companies: Cloudcall Group

17 Feb 20

WHI Morning Comment: Spectra Systems (SPSY)

Good entry point for great business Only marginally above levels last seen a year ago, we view shares in SPSY at the current price as representing an excellent entry point after coming off on profit taking. This was not, after all, an ordinary year for SPSY but an excellent one, characterised by upgrades, contract wins and most importantly, a significant collection of major opportunities which the company is working through and any of which has the ability to be a game changer for the business. To name a few among many: (1) potential further new work for a G7 central bank (existing client), (2) potential wins from a major Asian central bank, (3) major prospective polymer substrate contract, (4) tobacco smartphone authentication opportunities (TruBrand). As a provider of advanced technology solutions for banknote, product authentication, and secure lottery transactions, SPSY is a highly specialised producer of proprietary equipment, solutions and services, with high entry barriers to match. It is well-invested, hence the enhanced DPS in recent years; and the balance sheet is strong, with $11.1m of net cash (excluding $1.1m of restricted cash) reported with the most recent (H1) results, underpinning future growth expenditure. Importantly, our forecasts only encompass firm business prospects / established contracts. With TruBrand conducting tests in China (see above), this may have affected sentiment, but if so this is misconceived, since (a) this potential future revenue stream is immaterial or non-existent in our forecasts and (b) SPSY is not a one-trick pony – the pipeline is strong with other and major opportunities.

Companies: Spectra Systems

12 Feb 20

LIBERUM: Premier Miton Group* - Net flow stabilisation should be a positive catalyst for the shares

Following a sharp rally in December 2019 many UK listed asset managers have continued to see small share price gains in 2020 with the sector up 4.0% year to date. However, we note that there has been a particular under-performance of Premier Miton’s shares, currently down 17.2% over the same period.

Companies: Premier Miton Group

13 Feb 20

CMD flags strong near-term opportunities

We take the opportunity after last week’s Capital Markets Day to review key themes touched on by management, and the impact on likely future performance. Takeaways impacting organic growth are: 1) The speed at which migrations/ launches occur with Vanilla is faster than previously expected; 2) Video Content and Intent Marketing opportunities open up new streams; and 3) The Group has more potential to generate value from back catalogue content than previously thought. Organic Media sales growth of +3% in our FY’21E forecasts looks too prudent in view of these updates. We therefore upgrade organic Media growth forecasts to +10% y/y, with modest upgrades of +2% and +3% to FY’21E sales and EBITDA. FY’21E FCF yield is 6.8% (Sept y/e); A yield of 4% would generate an intrinsic value per share of >£20.

Companies: Future

11 Feb 20

S&U - Quick Take - Seemingly Unrelenting

S&U this morning released another solid trading update, this time covering the 2019 year-end period. The key highlights include the successful transition to the new Advantage CEO, an improvement in transaction levels for both businesses (including another record for Advantage), improvements in the Aspen repayments profile, and an increased second interim dividend, up 1p to 36p. We will reforecast at full year results on 24th March. In the meantime, management are optimistic for the coming year and have re-confirmed that FY20 results should be in line with their expectations.

Companies: S&U

12 Feb 20

New supply and license agreements with New Wave

Building on its existing collaboration, Itaconix has extended its commercial relationship with New Wave, a leading North American detergent supplier. Itaconix has entered into a licensing agreement for a new dishwashing detergent formulation based on Itaconix’ TSI 322 detergent polymer, which was launched last month. Since the announcement of the original December 2018 license agreement (for a triple-chamber dishwashing detergent pod based on Itaconix CHT 122), New Wave has gained new accounts and grown its volumes for use in private label brands at retailers throughout North America. As well as adding the new detergent formulation, a new supply agreement provides New Wave with certainty on pricing and supply of up to 1m lbs of Itaconix polymers over the next two years.

Companies: Itaconix

13 Feb 20

Premier Oil

Schemes approved by debt holders

Companies: Premier Oil

14 Feb 20

The Industrial Revelation

German GDP stagnates in Q4, BorgWarner expects weak 2020, IPG Photonic cuts Q1 numbers on Coronavirus disruption

Companies: CGS JHD OXIG RSW RNO SCPA TRI ZTF SOM GHH

13 Feb 20

LIBERUM: Futura Medical* - Positive discussions with EU regulator and US timeline reiterated

Futura has published an update on its progress with the EU and US regulators today. Following positive conversations with an EU Notified body (regulator) it began formal proceedings yesterday to get MED3000 (control arm in FM57 study) approved as a medical device in Europe and is on-track to submit its technical file for approval in mid-2020.

Companies: Futura Medical

17 Feb 20

The Industrial Revelation

Japanese Q4 19 GDP sees largest fall since 2014 following recent tax hikes, US industrial production fell due to warm weather and Boeing 737 Max issues

Companies: HTG OXIG RSW RNO SCPA ZTF SOM GHH

18 Feb 20

LIBERUM: Sylvania Platinum* - Dislocation from record prices

Sylvania Platinum is trading at extremely cheap levels, just 0.9x adjusted EV/EBITDA on spot. The market clearly feels nervous about the rapid rise in the underlying commodities, palladium and rhodium.

Companies: Sylvania Platinum

17 Feb 20

A good end to an eventful year, more to come

Q4 was a good end to a good, and very eventful, year. The report came in ahead of expectations and on the back of further acquisitions, solid growth is noted. The profitability held up well, there is good project progress and an occupancy ratio of 95% is among the highest noted. The bond issue in Q4 underpins the solid DCM access, there is continued shareholder support and the financial flexibility will increase further once the hybrid bond is issued.

Companies: Maxfastigheter I Sverige Ab

17 Feb 20

Liquidity reserve covers all outstanding bonds

Q4 was another good report from Aker. The balance sheet continues to be rock-solid, the upstream dividends were record-high and given the NOK 6.6bn liquidity reserve, we expect AKER10 and AKER13 to be redeemed at maturity. One of the key credit risks in our view is the opportunistic investment strategy with the purchase of ~23% of REC Silicon being one example hereof, but the overall credit case remains intact; market perform reiterated.

Companies: AKER ASA-A SHARES

17 Feb 20

Margin improvement, Digital in reorganisation

2019 was a good year despite a tough Q4 19 for TV advertising. In 2019, broadcasting revenue (71% of revenue) was rather stable (-0.2%) and included lower advertising revenue (-1.3%) that has to be tempered by the high comparative in 2018 (Men’s Football World Cup in 2018). The current operating margin rate was 10.9% of revenue (+2.2pt), of which 10.5% (+1.9pt) in broadcasting. Studios & Entertainment contributed strongly to group earnings, above expectations. 2020 guidance is unchanged.

Companies: Television Francaise 1

17 Feb 20

Faron Pharma CEO confident as he looks ahead to new Traumakine study

17 Feb 20

Blue Whale Growth Fund: Aiming to deliver 'significant outperformance' for investors

17 Feb 20

Impact of coronavirus on speciality metals 'about to bite' as China industry slows

17 Feb 20

Q4: Somewhat lower commercialization risk

poLight’s Q4 results were broadly in-line with expectations. We view the two smartwatch design wins during Q4 as important reference designs for potential larger design wins in wearables. These, and a potential small barcode design win in mid-2020, are likely to have a minor positive impact on estimates. We maintain our Hold rating and increase our target price to NOK 70 (45) following changes to estimates and applied multiple from lower commercial risk.

Companies: Polight ASA

17 Feb 20

Race for yield continues

Covivio decided to buy the listed Godewind in Germany, or a fully cash €1.2bn deal. It will extend its European Offices platform (France / Italy) following its successful residential German investment and alongside its Hotels branch. The recent share price catch up, from €90 in August 2019 to €110 today, translates the global shareholders’ race for yield, pushing the market to value Offices well above NAVs. The party continues.

Companies: Fonciere des Regions

17 Feb 20

World first primary scandium mine to 'unlock the metal's massive potential'

17 Feb 20

World's first primary scandium mine to 'unlock the metal's massive potential'

17 Feb 20

Quadrise Fuels' Mike Kirk highlights progress across pipeline of business opportunities

17 Feb 20

In line Q4; encouraging FY20 guidance by the new CEO

Despite being weighed down by the recall of Zantac, FY19 ended on a decent note on the back of strong traction for Dupixent and Vaccines. The outlook for FY20 is also encouraging as the new CEO places his bet on Dupixent and the growing oncology pipeline during the transition phase. Results of the phase II multiple sclerosis study bodes well for the mid-term. Nonetheless, the Bioverativ deal seems to have back-fired as Roche’s Hemlibra continues to gain strength.

Companies: Sanofi

17 Feb 20

FY19 - head and shoulders above FY18

The company has published its FY19 results which far exceeded the FY18 results. Even though there was a decrease in the orders received, the company has managed to increase its organic revenues by 6% and has positive unadjusted bottom-line items finally. It lags behind in terms of margin improvement but has shown significant SG&A improvement. While we believe that the company has performed below its set targets, we will update our target price to reflect its improved performance.

Companies: Bilfinger

17 Feb 20

Nanoco Group - Patent infringement lawsuit filed against Samsung

Nanoco has announced that it has filed a patent infringement lawsuit against Samsung. The lawsuit alleges that Samsung has wilfully infringed the patents relating to Nanoco’s unique synthesis and resin capabilities for quantum dots. Nanoco is seeking a permanent injunction from further acts of infringement and unspecified but significant monetary damages.

Companies: Nanoco Group