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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

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.

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

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

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

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

21 Oct 20

Hurricane Energy - Forecast and valuation update

Forecast and valuation update

Companies: HUR HUT HRCXF

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

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

Strong Q1, +6% FY21 revenue upgrade

Positive update today, reporting that trading in FYJun21 has begun well. As a result – and also thanks to DOTD’s strong revenue visibility – revenue guidance is already being upgraded. Consequently, we lift FY21E sales by 6% to £53.0m, so now expecting +12% y/y growth. To put this into context, growth fell to +9% in 2H20. We find this rapid recovery to more typical growth levels highly encouraging. Guidance for profit and cash is reiterated, meaning we leave both profit and cash forecasts unchanged. Somewhat obviously, this requires us increasing our cost assumptions….and if these don’t fully materialise, provides upside risk. Cash continues to build, now £27.7m as at Q1 – we might expect this to be strategically deployed, to enhance what is impressively consistent organic growth.

Companies: dotDigital Group plc

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

14 Oct 20

SP Angel Healthcare Conditions

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

Companies: Kromek Group Plc

21 Oct 20

Q3e EBIT up on lower cost assumption

Zalaris will report Q3 figures 27 October and we expect another solid quarter with further margin improvement. We have lifted our Q3 estimates on lower cost assumptions and slightly upped growth for Q4/20 and Q1/21 following continued easing of Covid-19 restrictions. If Zalaris delivers on our Q3 EBIT margin, we argue it should lead to a repricing as it adds further support to the margin recovery with the third consecutive quarter of margin improvement.

Companies: ZALO ZAL ZAL

21 Oct 20

Guild Esports are 'betting big' after signing top five team in Europe just weeks after IPO

21 Oct 20

Decent Q3 + forest revaluation gains + more cost savings

While Q3 was soft (both yoy and qoq), profitability erosion was less severe than street expectations. The growth divisions, i.e. Packaging and Forests, continued to do well, and Wood Products benefited from extreme gains in the US, thereby partly compensating for the weakness in other areas. Moreover, management unveiled its decision to revalue the forest assets – similar to the Swedish peers, and the scope of the cost savings programme was expanded. Overall, despite the recent share price run-up, Stora remains an attractive bet.

Companies: Stora Enso Oyj Class R

21 Oct 20

Synairgen close £80m share sale to fund crucial trial of breakthrough COVID-19 drug

21 Oct 20

Synairgen plans after £80m share sale to fund crucial trial of breakthrough COVID-19 drug

21 Oct 20

WHI Flash Light: Norman Broadbent (NBB) - Strategic appointments reflect growth initiatives

Today's announcement from NBB, following on from recent H1 2020 Interim Results which reflected the continued trajectory into profitability, brings to the fore the nuts and bolts of reorganisation with new senior appointments, internal promotions, and a reaffirmation of the strategic direction of the group. Key personnel have been selected to lead the major client hubs, including Finance, Industrials, Life Sciences and Digital. These are key areas of strength for the business with growth potential where the company's expertise in Interim, Solutions and Research remain complementary to NBB's traditional Search focus, the latter having reduced very significantly as other streams expanded rapidly.

Companies: Norman Broadbent plc

21 Oct 20

United Oil and Gas: Stronger Base, Further Reach

21 Oct 20

UMG not impervious to the crisis but still steadily growing

Vivendi saw its Q3 revenues increase by 0.7% yoy at constant currency and perimeter. A correct performance rather expected and primarily driven by the growth of UMG (+6.1% without, however, regaining the 12.7% of Q1). An IPO of UMG is planned for 2022. This clearly means the stock could rise towards €30 in 2021 as the IPO approaches, if strong EBITA growth continues of course. One can already accumulate the stock at the current level.

Companies: Vivendi SA

21 Oct 20

Blockbuster results all around

Logitech’s Q2 21 results were a big surprise on all fronts with quarterly sales crossing the billion dollar mark for the first time. Profitability figures were even more impressive and enabled the group to raise its targets for FY21 in consecutive quarters.

Companies: Logitech International S.A.

21 Oct 20

PBKM - European leader in stem cell banking

Polski Bank Komórek Macierzystych (PBKM) continues its consolidation efforts in the cord blood banking services market in Europe. It operates 15 stem cell banks under the FamiCord brand, covering approximately 37% of the European market for newly acquired samples, seeing space for further growth in Western Europe. PBKM is present in 11 European countries, with partners in a further 13 regions. Recent steady growth (2015–19 revenue CAGR of 16%) has been fuelled by both organic development and M&A.

Companies: BKM 45Z BKMPLN

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