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20 Jan 20

Rapid growth confirmed

Kape have announced a full year trading update confirming the expected strong growth in top-line and adjusted EBITDA. Kape’s sales growth accelerated sequentially to 19% h/h in H2 (H1: 7%), supported by continued growth in the Group’s core Digital Privacy segment. Full year revenues of c.$66m (N1S: $68.9m) were achieved after some reallocation of marketing investment towards Digital Privacy (sales recognised over time), which has in turn led to an improvement in revenue visibility for future periods. Adjusted EBITDA is now expected to be ahead of expectations: ($14.5m; N1S: $13.9m) as a result of a higher than expected proportion of Digital Privacy sales. Management guidance targets revenue growth of 85% and adjusted EBITDA growth of >150% in FY’20E (inc acquisition of PIA), in-line with expectations, and we make no changes to forecasts at this time. FY’20E OpFCF yield is forecast at 5%, ahead of comparative high-growth peers.

Companies: Kape Technologies

22 Jan 20

Q4 ahead of expectations, boosting cash and dividend

The FY update highlights a stronger Q4 than expected, with a rebound in US sales after a weak H1 and initial SkyScreed sales. This results in an uplift in revenue, profit, and cash guidance for the year, thereby also boosting the underlying and supplemental dividend. This results in an eye-catching current year yield of 7.3% and undemanding P/E of 9.4x. We maintain our 380p price target, which offers good upside potential.

Companies: Somero Enterprises

20 Jan 20

Kape Technologies

Strong trading update; Buy

Companies: Kape Technologies

20 Jan 20

The Industrial Revelation

US factory output rises in Dec better than expected, Schlumberger sees continued weakness in North America, Fastenal saw a continued slowdown in Q4

Companies: HEAD HILS HTG JHD RNO SCPA TRI ZTF SOM

16 Jan 20

CloudCall

FY trading update: In rude health; Buy

Companies: Cloudcall Group

20 Jan 20

Cenkos: Seeing Machines Ltd -- The DMS challenge palpable at CES2020

Interior and Occupant Monitoring was a notable theme of CES2020 with around fifteen different concepts demonstrated, up from three in 2019. However, these did not outnumber Driver Monitoring System (DMS) demonstrations and did little to deflect from the openly discussed challenge of sourcing and designing reliable primary safety DMS at appropriate costs for the automotive mass market. This task is being exasperated by a confluence of factors including vehicle design complexity and regulatory time pressure, and especially in the absence of knowing what technical specifications are required to meet the forthcoming Euro-NCAP and EC certification standards. We view the many demonstrations of IMS/OMS and emotional analysis as a distraction from the DMS challenge and, in this respect, our primary thesis for Seeing Machines remains unchanged following what we saw at CES2020: We believe Seeing Machines remains on track to win the largest market share of the DMS safety system market. We maintain our Buy recommendation and 12p DCF derived price target which is based on a 16% discount rate.

Companies: Seeing Machines

16 Jan 20

LIBERUM: Judges Scientific* - FY19E EPS beat

We increase our FY19E EPS by 4.7% to reflect an encouraging FY trading update from Judges. Our FY20E forecasts remain cautiously set and we think that the risks are to the upside as the year progresses.

Companies: Judges Scientific

20 Jan 20

Hurricane Energy - Updated drilling campaign for 2020–21

In December 2019, Hurricane Energy provided a trading and operational update on its activities, announcing a strong ongoing performance of the Lancaster early production system (EPS), with well tests supporting guidance of 20,000bopd for FY20 (before operational downtime). Hurricane was also granted a five-year extension to its P1368 licence, covering Lancaster and Lincoln, which resulted in changes to its near-term work programme. One or more sub-vertical wells will be drilled on both Lincoln (in 2020) and Lancaster (in 2021) to determine the maximum vertical extent of each reservoir. Hurricane estimated FY19 revenue of c $165m and year-end unrestricted cash of c $150m, relatively in line with our estimates for the year. Our risked valuation stands at 109.9p/share (from 102.8p/share) as we roll forward our NAV, adjust our short-term oil price assumptions and update forecasts to reflect Lancaster EPS performance and the 2020–21 work programme.

Companies: Hurricane Energy

22 Jan 20

Somero Enterprises

FY19 trading update – significant upgrades to 2019 from better than-expected H2

Companies: Somero Enterprises

20 Jan 20

LIBERUM: AFH Financial Group* - Impressive growth and positive outlook

In FY19 AFH delivered 8% organic net flows and revenues are up 47% yoy. The revenue model change in Protection responds to investor concerns and leads to significantly increased cash conversion.

Companies: AFH Financial Group

21 Jan 20

Metronomic growth

dotdigital’s trading update to December reveals sales and adj. PBT growth in line with N+1 (and consensus) forecasts, while period-end net-cash of £22.5m infers >100% cash conversion. The company’s growth drivers remain consistent: geographical and ARPU expansion – here we flag 18% and 51% US and APAC growth respectively, meanwhile ARPU expanded 14% to £999/user/month. We expect ARPU to improve further, as more customers use the omnichannel functionality offered within the Engagement Cloud. Equally, international expansion should also remain a core theme, as here, DOTD’s low level of penetration in sizable markets provides a multiyear growth opportunity in our view. No changes to forecasts.

Companies: Dotdigital Group

16 Jan 20

WHI Morning Comment: Judges Scientific (JDG) - Trading update – small upgrades to FY2019E and FY2020E

Judges Scientific, a group involved in the buy and build of scientific instrument businesses, has released a positive FY2019 update this morning. Aided by favourable exchange rates (critical for an export led business), leading to healthy demand, we uplift our FY2019E revenue estimates by 2.1% to £83.2m (from £81.2m), and against a slightly richer margin profile, uplift our adjusted PBT and EPS estimates by 5.0% to £17.3m and 215.5p respectively (from £16.4m and 204.8p). Our FY2019 estimates therefore look for a YoY increase in revenue of 6.9%, and with underlying margins improving, adjusted PBT increasing an impressive 20.8% YoY. FY2020 adjusted PBT and EPS is raised by 3% to £17.4m and 217p (from £16.8m and 210.p).

Companies: Judges Scientific

20 Jan 20

A doubly-strong finish to 2019

Kape has today published a trading update for its 2019 year. The group, in addition to the November acquisition of PIA, has revealed a strong close to the year, with Adjusted EBITDA slightly ahead of expectations. We make no changes to our revenue and EBITDA forecastsfor 2020, which remain within the range of guidance provided, but take significant comfort from the fact that Kape has now delivered both strong organic outperformance and a transformational acquisition in recent months.

Companies: Kape Technologies

15 Jan 20

Games Workshop Group - ‘Record sales and profit’ again

Games Workshop’s (GAW) interim results are ahead of expectations. The highest rates of revenue growth were achieved in the channels with the highest operating margins, ie Trade (40% margin) and Online (64% margin). This has produced a strong improvement in free cash flow generation and ROCE has improved from 96% to 111%. We upgrade our forecasts for FY20 and FY21 by a further 3% following the 9% upgrade in November. Our DCF-based valuation increases by 11% to 5,748p.

Companies: Games Workshop Group

22 Jan 20

LIBERUM: NewRiver* - A resilient operating performance shows not all retail is the same

NewRiver's Q3 update confirms a resilient operating performance in a tough market overall, which should provide reassurance. Retail occupancy increased through Q3 to 96.1%, with lettings agreed 3% ahead of ERV.

Companies: Newriver Reit

22 Jan 20

Executive interview - Sureserve

22 Jan 20

Q1 19/20 met expectations

Sage Group had a good start to FY2019/20. Total organic revenue increased by +6.7% while organic recurring revenue grew significantly (+10.7% vs +10.5% in Q1 18/19) thanks to the migration of existing customers to subscription and the cloud, the reactivation of customers and the gain of new clients. As in 2018/19, North America and the UK/Ireland were the most dynamic geographic areas. Guidance for FY2019/20 is confirmed.

Companies: The Sage Group

22 Jan 20

Another good quarter thanks to new collections

Burberry has just released an encouraging year-end trading performance. However, although the slightly better than expected year-end sales have allowed the group to upgrade its FY19/20 revenue guidance, the ongoing political crisis in Hong Kong should continue to weigh on the group’s margin generation.

Companies: Burberry Group

22 Jan 20

Q4 19: Memory customers to return in 2020

The Q4 report provided no surprises to justify another rally in the stock. The management gave some positive news regarding a come back of its Memory customers as well as an expected pick up in fab equipment spending in 2020, but we believe that this is already discounted in the stock price. Nonetheless, we remain very positive on the long term outlook for the company which will continue to benefit from the inevitable EUV adoption.

Companies: ASML Holding

22 Jan 20

The Mission Marketing Group - Last minute surge

MISSION’s full year trading update confirms that the group performed in line with market expectations, with the last weeks of the year particularly busy. Working capital is therefore likely to have increased net debt to more than the £2.1m previously anticipated by the market, but still within the 0.5x net debt/EBITDA target. Management continues to expect the group to be net cash positive by end FY20e, despite higher investment in both technology and geographic expansion. Unchanged market forecasts for FY20 and FY21 show good progress at revenue and margin levels. The valuation remains at a sizable discount to peers.

Companies: The Mission Group

22 Jan 20

Asset Owner, asset manager

The demerger of Prudential has given birth to the third largest UK asset manager, M&G plc. With an important book of Life insurance products, mainly in its Heritage business unit, M&G should be able to cope with the low interest rates context. However, the company should benefit from the slow run-off profile of its business to generate stable operating earnings and cash flows. The focus will be given to Asian and US growth. We begin our coverage with an Add opinion.

Companies: M&G

22 Jan 20

Iconic Labs shake up the media tech space with two new deals

22 Jan 20

InMed Pharmaceuticals - Developing cannabinol (CBN)

InMed has announced that the cannabinoid that is the basis for both its epidermolysis bullosa (EB) and glaucoma programs is cannabinol (CBN). This puts InMed in an attractive position (especially from an intellectual property perspective) as other medical cannabis programs are focused on either tetrahydrocannabinol (THC) and/or cannabidiol (CBD) for a variety of indications. Importantly, from a regulatory perspective, CBN is believed to have either slight or no psychoactivity, but it does have a number of beneficial effects including reducing inflammation and intraocular pressure (IOP).

Companies: INMED PHARMACEUTICALS

22 Jan 20

Targovax - Positive signals from Phase I/II mesothelioma trial

Today, Targovax reported randomised data from the Phase I/II study (n=31) in unresectable malignant pleural mesothelioma. The results confirmed a good ONCOS-102 safety profile. The key clinical response endpoint mPFS was 8.4 months (active arm) vs 6.8 months (control) and above the historical control of 5.7–7.3 months. mPFS results are still early, with many patients not included in the analysis (additional data will serve as a potential catalyst later in 2020). Overall, as we described in our last note, mesothelioma is one of the most difficult cancers to treat, with classic chemotherapy still being the standard of care. While the size of the study limited the analysis for statistical significance (the trial was not designed to check for a statistically significant clinical effect), the mPFS results and the fact that clinical outcomes correlate with a cancer-specific immune response are clearly positive signals. Targovax has presented preliminary plans for the next trial. Our valuation is under review, while we analyse the details of the trial results.

22 Jan 20

Record - Positive AUME flows and performance fees

Record’s Q320 update was positive, with a 4% inflow of assets under management equivalent (AUME) and the crystallisation of a performance fee in the period. AUME flows have now been positive since Q120, totalling $4.5bn (+8%) over nine months. The performance fees in this quarter follow on from a material contribution during FY19, reflecting value added for clients. Record continues to innovate and invest to counter competitive pressure, which has contributed to broadly stable management fee rates.

Companies: Record

22 Jan 20

Bitesize briefing: Oil discoveries in Suriname and Guyana

22 Jan 20

BB Healthcare steadfast after rollercoaster 2019 for healthcare investment sector

22 Jan 20

Baker Steel Resources Trust offer investors a UK tungsten opportunity

22 Jan 20

Baker Steel Resources Trust offers investors a UK tungsten opportunity

22 Jan 20

Another €0.6bn of ‘one-offs’ burdened preliminary 2019 EBIT

Dieselgate and the Takata airbag problem resulted in provisions of some €3.5bn in H1 19 and management is now arguing that another €0.3bn were needed for the portfolio optimisation of Vans in Q4 19. Finally, €0.3bn of restructuring costs were added to Mobility which is the consequence of terminating the car sharing offer in North America and several European cities as it has been unprofitable.

Companies: Daimler