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15 Aug 18

H&T Group PLC - Disciplined Growth in H1

H&T Group PLC (LON:HAT), the UK market leader in pawnbroking, released results on August 14 for the first half of 2018, showing sustained growth both in the core pawnbroking and other financial services.

Companies: H&T Group

13 Aug 18

LIBERUM: Plus500* - Now the #1 CFD broker in UK, Germany and Spain. 90% of FY est’s earned in H1!

Amazing H1/18 results with revenue +147% yoy and PAT +190% yoy. Customer deposits in H1 were up 130%, though Singapore is just getting going. The company has made diligent progress with the Elective Professionalisation offer to qualifying EEA clients, who already represent 22% of EEA revenues, and they expect to hit over 40% (cf. IG expecting 50%).

Companies: Plus500

14 Aug 18

Strong market dynamics with consolidation opportunities

Falanx has established itself as a trusted advisor in the cyber security sector through the high-quality execution of its cyber services proposition, based on a methodology and set of processes that have been built up over many years, enabled by strong technology and experienced analysts. The Falanx Group offers an opportunity to invest directly in the growing cyber security market while gaining exposure to the benefits of M&A consolidation in a fragmented segment, led by an experienced team with a proven track record.

Companies: Falanx Group

15 Aug 18

Cenkos: Arena Events Group Plc - Successful Placing for Acquisitions

Arena Events Group plc has conditionally raised £20m via a placing, subject to shareholder approval, to facilitate making two material acquisitions, one in the West Coast USA and the other in the Middle East. Both acquisitions are expected to be earnings enhancing this year and in future years. We assess Arena to offer investors access to growth at an affordable valuation. We upgrade our forecasts and reiterate our Buy recommendation.

Companies: Arena Events

16 Aug 18

7digital Group - Ready to rock ’n' roll

7digtal has now reported its FY17 results, which show a strong uplift in revenues, reflecting the 24-7 acquisition, and a greatly reduced EBITDA loss. The publication of the results was delayed in order to conduct a thorough review by new auditors, resulting in a significant strengthening in reporting procedures and systems, and a restatement of historical figures. The rapidly shifting streaming market gives the group significant B2B opportunities, with music a key element of customer engagement for retailers, connected devices and mobile network operators.

Companies: 7Digital Group

15 Aug 18

Liberum Wealth partners with Research Tree

We are delighted to announce our new partnership with Liberum Wealth and an associated 20% discount on our Research Tree subscription (Download the below booklet for full information).

17 Aug 18

Hutchison China MediTech - Establishing a global operational presence

Highlights from Hutchison China MediTech’s (HCM) H118 results relate to the substantial pipeline-related newsflow expected in 2018/19, the recent expansion of its US and international operations (which will enable HCM to execute its international R&D and commercialisation strategies) plus strong operational and financial performance by the China commercial platform division. Fruquintinib (third-line CRC) remains on track to launch in China by year end (approval decision expected by the CNDA in the next few months). Encouraging Phase II data so far on savolitinib (first-line NSCLC exon14m/deletion) could lead to accelerated approval in China, contingent on final data (expected in 2020) being consistent with data to date. We value HCM at $6.4bn or £73.3/share.

Companies: Hutchison China Meditech

07 Aug 18

IQE - Six more VCSEL projects in mass production

IQE’s post-H118 close trading update notes the group continues to trade in line with current market expectations. Importantly, it comments on a significant increase in photonics revenues from product qualifications, underpinning management’s expectation of a photonics ramp-up in H218 and FY19. We raise our revenue estimates slightly but otherwise leave our forecasts unchanged.

Companies: IQE

01 Aug 18

The Monthly

Hardman & Co’s analysts have direct experience of uncovering accounting frauds. In this article, Steve Clapham outlines why we might see a surge in them over the next few years. He is engaged by institutions to teach their fund managers and analysts how to identify risks brought about by such frauds. Hardman & Co is pleased to offer this service to private investors.

Companies: OPM AVO AGY APH ARBB AVCT BUR CMH CLIG COS DNL EVG GDR INL KOOV MCL MUR NSF OXB PHP RE/ REDX SCLP SCE SIXH TRX TON VAL W7L

10 Aug 18

Cenkos: Smart Metering Systems Plc - Smart time to BUY

The British Infrastructure Group of Parliamentarians (BIG) published a report on 20 July entitled “Not So Smart. A comprehensive investigation into the roll-out of energy smart meters” (the BIG report). Although the report is generally supportive of the UK transition to smart meters, it was widely picked up in the press and the domestic smart roll-out programme heavily criticised. In our judgement, none of the findings in the report constitute fresh news and indeed there are several inaccuracies that could potentially undermine confidence in the adoption of smart meters. Following the recent decline in the SMS share price we have examined two very conservative DCF valuation scenarios. Even if SMS was to undertake no further smart meter installation activity after the current year we value the shares at 751p. However, with our current target of 2.45m meters installed by 2020 and valuation of 1015p, c57% ahead of current level, investors should take advantage of the recent weakness in the SMS share price.

Companies: Smart Metering Systems

17 Aug 18

Completion of InvestmentNews acquisition

Bonhill Group (formerly Vitesse Media) has announced the completion of the acquisition of InvestmentNews for US£27.1m on a debt-free/cash-free basis and the placing to raise c.£19.4m gross i.e. 24,206,875 placing shares at a post-consolidation placing price of 80p per share (2p per share prior to the 40:1 share consolidation) and admission of the company’s enlarged share capital to trading on AIM. The group has also changed its name from Vitesse Media to Bonhill Group and its year end to 31 December. Forecasts have been updated to reflect the revised number of shares in issue following completion of the acquisition and placing. We retain our Buy recommendation.

Companies: Vitesse Media

06 Aug 18

Keywords Studios - Currency headwinds, outlook maintained

Keywords’s trading update indicated continued robust performance with y-o-y revenue and PBT growth of 72% and 66% respectively, despite the currency headwind from a weaker dollar. With the integration of acquisitions going well, a robust demand environment and a stronger dollar, the company looks set for a strong H2 and is well placed to meet our (unchanged) FY estimates.

Companies: Keywords Studios

16 Aug 18

Strong FY’17 performance; trimming ests. on timing

7DIG’s FY17A results were impacted by a combination of accounting adjustments and timing issues, leading us to cut our FY18E estimates in isolation. We believe the company remains on track to meet our FY19E expectations, implying robust growth potential at a modest valuation, and view any volatility in early trade as a particular opportunity to gain exposure. We reiterate our Buy rating and retain our price target of 9.5p.

Companies: 7Digital Group

20 Aug 18

Increasingly more confident

Hot on the heels of winning up to $3.3m of home security contracts in late July with the US government, Kromek today said that it had secured two more significant orders. Both within healthcare and together worth >$1m.

Companies: Kromek Group

14 Aug 18

More wells, more excitement

Petro Matad recently raised US$17 million (net of expenses) and added two more exploration wells to its work programme. These will be drilled in the first half of 2019 and will target 231 MMbbl between them. After a review by its technical team, the Company has also upgraded its estimate of the size of the Wild Horse prospect from 290 MMbbl to 480 MMbbl. Overall, the number of barrels bring targeted by Petro Matad in 2018/19 has more than doubled. We reiterate our Buy recommendation and raise our price target to 83p/share.

Companies: Petro Matad

20 Aug 18

MagneGas Corporation - Acquisitions drive trebling in revenue

MagneGas’s Q218 results show the transformative effect of the three acquisitions that were made earlier in the year. Sales trebled year-on-year, but as the annualised revenue run-rate achieved in May has not been maintained, we revise our FY18 estimates downwards.

20 Aug 18

Takeover of Austria’s leading webhosting firm Word4You

United Internet AG has reached an agreement with Austrian webhosting company World4You concerning the 100% acquisition of the company by United Internet subsidiary 1&1 Internet SE. World4You is the leading webhoster in Austria and has over 100,000 customers. The move will strengthen the international activities of United Internet’s Business Applications segment pooled with 1&1 Internet SE, a company held jointly by United Internet (66.7%) and Warburg Pincus (33.3%).

Companies: United Internet

20 Aug 18

Freegold Ventures - Boldly going

Freegold’s assets consist of the Golden Summit project and the Shorty Creek copper–gold project in Alaska. Tetra Tech’s preliminary economic assessment (PEA) of Golden Summit demonstrated a pre-tax internal rate of return (IRR) of 20.0% and a post-tax NPV5 of US$188m (US$1.08 per existing Freegold share) at a gold price of US$1,300/oz. However, Freegold is looking to augment economic returns to shareholders by expanding the oxide resource to support a doubled throughput rate in the early years of production. In the meantime, it believes that it has discovered a buried copper porphyry. Although relatively early stage (and subject to an appropriate risk warning – see page 22), we think that exploration at Shorty Creek to date could be indicative of an initial resource of c 0.8Mt of contained copper plus additional by-product credits and open at depth at just one of its exploration targets at Shorty Creek. We estimate these could be worth c US$11.8m (ie 139% of Freegold’s current enterprise value [EV]) initially, if a resource can be brought to NI 43-101 standards (the goal of this year’s drilling).

Companies: Freegold Ventures

20 Aug 18

Cenkos: Kromek Group Plc - Scaling up production

A spate of contract newsflow is increasing revenue visibility over this year. Some new and incremental addressable markets are being discovered for Kromek's CZT based detection equipment. The footprint of the business is steadily increasing and its size will be enhanced materially as the US manufacturing facility ramps up this fiscal year.

Companies: Kromek Group

20 Aug 18

Ariana Resources - Kiziltepe quarterly operational update

20 Aug 18

Going into another dimension?

According to Bloomberg, Euronext is the leading bidder for the acquisition of MarkitServe, which is IHS Markit’s derivatives processing unit. The price would be above $1bn. The purchase of this business would be a very positive one for Euronext (in terms of EPS) and the transformational acquisition that investors have been waiting for some years already. The London Stock exchange is also interested in the business unit.

Companies: Euronext

20 Aug 18

redT energy - Gen 3 sale to Anglian Water

20 Aug 18

Executive interview – VolitionRx

20 Aug 18

Hutchison China MediTech - Establishing a global operational presence

Highlights from Hutchison China MediTech’s (HCM) H118 results relate to the substantial pipeline-related newsflow expected in 2018/19, the recent expansion of its US and international operations (which will enable HCM to execute its international R&D and commercialization strategies) plus strong operational and financial performance by the China commercial platform division. Fruquintinib (third-line CRC) remains on track to launch in China by year end (approval decision expected by the CNDA in the next few months). Encouraging Phase II data so far on savolitinib (first-line NSCLC exon14m/deletion) could lead to accelerated approval in China, contingent on final data (expected in 2020) being consistent with data to date. We value HCM at $6.4bn.

Companies: Hutchison China Meditech

20 Aug 18

Telix Pharmaceuticals - Targeted radiation to image and treat cancer

Telix has assembled a portfolio of promising molecularly targeted radiation (MTR) therapeutic and imaging products for three different cancers. Each product has been validated by clinical studies or compassionate use in patients, thus reducing development risk. Telix is positioned to add significant value, such as by refining the products or developing them as a combination therapy. Preparations for a confirmatory Phase III study for kidney cancer imaging agent TLX250-CDx and for multiple Phase I/II studies of other agents are underway. It has begun commercialisation of an investigational prostate cancer imaging kit in the US, and plans are being developed for a short pivotal study to allow full approval. Our initial valuation is A$303m or A$1.39 per share.

Companies: Telix Pharmaceutical

20 Aug 18

Greatland Gold - Identifies Large Gold Target

20 Aug 18

Tough times in Q2 18, improvement onwards

No surprises after the profit warning on 7 August 2018. The surge in bunker prices weighed on Ocean’s operating margin. Unit cost at fixed bunker price, at constant currency and excluding Hamburg Süd, was down 1.4% yoy which was a favourable achievement. H2 18 should be better with the positive effect of the Emergency Bunker Surcharge and further cost synergies related to Hamburg Süd. Finally, management decided to separate out Maersk Drilling with the listing of the company in 2019.

Companies: AP Moeller Maersk

20 Aug 18

Allium Medical Solutions - Making progress across the board

Allium has reported H118 financial results. Revenues increased 31% y-o-y to NIS4.9m. As before, we continue to expect additional product approvals during 2018 and sales growth from its distribution deals in new and established markets. We maintain our FY18 sales forecast of NIS14m with a projected 2017-2020e revenue CAGR of 57%. We continue to believe that regional expansion is crucial to the company’s investment case. Our valuation, updated for net cash of NIS16.6m, is NIS1.82 per share.

20 Aug 18

LiDCO - Interim trading update and HUP progress

The transition of LiDCO from a razor/razor blade model into a SaaS operating model, selling High Usage Programme (HUP) hemodynamic monitors, continues, albeit the sales cycle remains a long one. Three new US HUP wins announced today (21 monitors) takes H1 customer wins to five and seven in total, with scope for these hospitals to build their HUP installed base given their sizes. First half revenues are 8% lower than last year, affected by lower third-party revenues and less capital sales as customers look to the SaaS HUP model; however, encouragingly, recurring revenues rose 11%, with US up 59%. The outlook is for a much stronger second half with revenue growth dependent on timing of new HUP customers and the quantum of capital sales in the UK. We have reduced revenues by c.£1m and PBT by c.£0.2m, but given our unchanged year-end cash and future recurring revenues, target price remains 14p, underpinned by a 10-year DCF of 21p.

Companies: Lidco Group

20 Aug 18

FCA apparently favours higher US car import duties

Michael Manley, FCA’s new CEO, was recently invited by the US President to a dinner at the President’s golf club in New Jersey. Before he was asked to present himself, the President said that Manley is desperate to see import duties on cars rising strongly, right? Manley’s answer apparently was ‘absolutely’. FCA is the second largest exporter of cars from Mexico and it is also importing cars from Europe into the USA. Assuming the above is correct, the new CEO has clearly agreed to a substantial profit fall for FCA. A statement like the one above should not be made behind closed doors but made public as this changes the profit guidance management had released earlier. Up to now it is unclear whether higher import duties will come, but management should have given a first idea as to how sizeable the impact will be on the group’s accounts.

Companies: Fiat Chrysler Automobiles