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14 Sep 20

Interims highlight robust underlying performance

Whilst headline H1 revenue growth of 23% is eye-catching, for us the most comforting factor is the robust performance of the underlying business in the most challenging of circumstances. Sales of the Primestore MTM sample collection device contributed £6.5m, meaning the core business was -8% in the period, well ahead of internal expectations. Highlights include strong performances from BhB, DiaSpect Tm and the Clinical Chemistry portfolio, all of which grew revenues in the period. Whilst there were challenges in certain geographies, this is a very creditable performance and testament to the strength and defensiveness of the core business. We make no further change to our forecasts at this stage, having upgraded regularly in recent months. Given we have only included firm orders for Primestore up until the end of this month, we remain confident further upgrades are likely for the rest of this year and into next. In the meantime, latent growth potential in the core business is building with, inter alia, Chinese approval of Quo-Test, strong momentum with DiaSpect Tm, the Trellus health investment and a variety of contract manufacturing orders in the Central Lab/Life Sciences segment adding to the medium term growth outlook. Given the continuing scope for upgrades, we continue to see upside potential in the shares – EKF remains one of our Best Ideas for 2020 (up 66% YTD).

Companies: EKF Diagnostics Holdings Plc

11 Sep 20

Games Workshop Group - Exceptional start to FY21

Games Workshop’s (GAW) Q121 trading update was well ahead of expectations, indicating that the previously flagged strong post-lockdown demand has continued, helped by a major product re-release in the period. We upgrade our FY21e PBT forecast by 37% to £115.9m, reflecting higher revenue growth, c 12% versus 2% previously, and a higher operating margin pre-royalties of c 35% versus 27% previously. On our new forecasts the P/E for FY21 is 35.2x. The EV/sales multiple of 10.6x is a premium to GAW’s previous highest multiple.

Companies: Games Workshop Group Plc

14 Sep 20

Cenkos: Seeing Machines Ltd - DMS kit on Qualcomm platform

Seeing Machines has announced plans to deliver a fully supported, integrated Driver Monitoring System (DMS) kit to the global automotive industry. This will be in the form of embedded software (e-DMS) for the Qualcomm® SnapdragonTM Automotive Development Platform (ADP) from Qualcomm Technologies. The kit is expected to be available before the end of this calendar year for use by select automotive Tier 1 suppliers and OEMs and will support a full stack Seeing Machines DMS solution on the Snapdragon™ ADP targeting integration into either infotainment or centralized ADAS systems, and includes an optimized DMS reference camera, ADP interface board and the company's FOVIO and Occula software.

Companies: Seeing Machines Ltd.

17 Sep 20

Cenkos: Duke Royalty Ltd - Improving trading – increasing cash receipts

FY20A results largely reflect a period prior to the Covid-19 lockdown, yet show Duke entering a more challenging FY21E with momentum. Yesterday's trading update demonstrated another notable rise in quarterly cash receipts for Q2/21, as royalty partner trading continues to improve. As some partners' forbearance measures will expire this month, Q3/21 receipts should continue this upwardly momentum. This opens the door to a return to cash dividends at some future point. Today, Duke also confirms it is now seeking new royalty partners, alongside follow-ons.

Companies: Duke Royalty

14 Sep 20

Major contract win

Surface Transforms has announced a major contract win with a manufacturer of EVs. Lifetime revenue is estimated to be £27.5m. Our 2021e revenue forecast is lifted by c.80% and 2022e by c.120%. The improved OEM order book brings better visibility and stability to revenues. To fulfil the order, significant investments will be made in headcount, but the Group should now report a net profit in 2021e against our previous forecast for a loss. Additional working capital and capex are also required but the cash position should improve materially in time. The award demonstrates the performance, weight and environmental benefits of carbon ceramic discs when fitted to EVs. More orders from this customer and others should flow. We showed in our recent initiation note, Release the brakes, 19 August 2020, that the market opportunity for carbon ceramic discs is large, irrespective of whether for ICEs, EVs or hybrids. The Group is on-track to becoming a volume supplier to the industry. With increased estimates our valuation is lifted to 45p from 40p.

Companies: Surface Transforms Plc

15 Sep 20

EUS growth drives record revenue and profit

The Interims are as flagged in the July update; global lockdowns helped End User Spend (EUS) over the platform rise by 59% YoY to £743m. Encouragingly, the H1 revenue growth closely matched that rise; increasing 50% YoY, to a record £4.8m. With operational gearing in the platform, group profitability continues to rise rapidly as revenue grows; H1 adj. EBITDA of £1.1m, more than double the whole of FY 2019 earnings. The major deals delayed in FY 2019 also arrived in H1, for Platform and Bango Marketplace; notably, the purchase of a controlling stake in Audiens by Korean tech giant, NHN, assisting management focus while retaining a 40% stake in a business set to be boosted by funding and IP from its new parent. Operating activities were cash positive and capex was more than covered by an NHN investment, lifting net cash to £4.2m. This is an exciting year, with deals signed in H1 expected to help EUS reach £2bn in 2020 and leaving BGO on track to meet our FY forecasts of strong revenue growth and material profitability.

Companies: Bango Plc

16 Sep 20

Interims show strong performance in core business

RBG Holdings had H1 revenues of £12.0m, up 17% against H1’19, of which £11.7m came from the Group’s law firm, RBL. On a LfL basis (excl. £2m of discretionary gains from litigation assets in H1’19), Group revenues were up c.46% YoY. EBITDA of £2.6m offers still-compelling margins of 22%. Transaction delays in Convex and a period of investment in LionFish held back ST performance for these higher margin divisions, yet pipelines remain healthy for Convex. Management is bullish on its ability in H2 to divest litigation assets in order to fund new investment, and in line with strategy. Continued uncertainty over timings around Convex transactions completing, and COVID headwinds, means we keep forecasts withdrawn, however suggest an intrinsic value of 90p is comfortably achievable for the shares.

Companies: RBG Holdings Plc

11 Sep 20

Hurricane Energy - Technical review update; H1 2020 results

Technical review update; H1 2020 results

Companies: Hurricane Energy Plc

18 Sep 20

Cenkos: Trinity Exploration Production P

Trinity has announced a strong set of interim results during a highly volatile period, with production increasing by 9% year-on-year to 3,282bopd (H1/19 3,007bopd). Operating break-even's post hedging in H1/20 reduced to US$22.3/bbl, a 15% year-on-year reduction and a 65% reduction since 2014. Similarly, a relentless drive to improve efficiencies and reduce costs has seen G&A and opex fall by 67% and 65% respectively since 2014. Despite the dramatic fall in oil prices, Trinity's strong production performance combined with its receipt of VAT receivables via a VAT Bond sale and the drawdown of a small working capital facility facilitated cash balances increasing by 43% to US$19.7m from YE2019. Trinity is well positioned to grow both organically and inorganically, with Trinity signing MoU's and submitting EOI's (in consortium with Cairn Energy Plc) to pursue new opportunities of scale. We set our price target a 31p/share, a 248% premium to the current share price and reiterate our BUY recommendation.

Companies: Trinity Exploration & Production Plc

18 Sep 20

Growing long-term subscription revenues

Crimson Tide has reported a strong set of H1 results evidencing very strong sales momentum backed by long-term contracts and cash flow. H1 sales grew by 40% and EPS by 154%. Net cash has improved to £0.8m at June 2020 from nil at December 2019. The strategic focus on transportation and supermarkets is working well, partnerships are improving routes to market, and there is growing traction from investments in innovation. We have left our forecasts unchanged for now, but recognise positive pressure and have upgraded our target price from 3.1p to 4.3p. We reiterate our view that Crimson Tide’s valuation will be dictated by its ability to convert the significant opportunity rather than short-term metrics. H1 results show the group is nicely on track to do exactly that.

Companies: Crimson Tide Plc

15 Sep 20

Strong H1 confirmed; strong cash conversion

Kape’s interims saw Group revenues rise +97% y/y to $59.0m (organic: +12%), driven by a 245% increase in Digital Privacy sales (+47% organic). Organic growth was stronger than anticipated in Digital Privacy, above N1Se estimates of 30%-40% as a function of strong end-user demand. CyberGhost (VPN) and Intego (end-point protection) subscriber bases grew +10% and +11% h/h respectively. The main takeaway is Kape’s inflection to positive FCF ($6.7m; H1’19: -$1.8m) alongside increased cash investment into customer acquisition (+60% y/y to $29m). We see meaningful cash flow margins (>25%) being delivered in the next 1-2 years, with £31m of FCF forecast for FY’21E generating a 6.3% FCF yield (peers offer 3.5%-4%). Putting Kape on a 4% FCF yield implies an intrinsic value of >£3/share.

Companies: Kape Technologies Plc

14 Sep 20

Allenby Capital TMT Update - 14.09.20 - CPX.L, GFIN.L, NWT.L, MWE.L

CAP-XX Ltd* (CPX.L, 4.5p/£19.9m) | Gfinity plc* (GFIN.L, 3.8p/£28.9m) | MTI Wireless Edge Ltd* (MWE.L, 44p/£38.7m) | Newmark Security plc* (NWT.L, 1.175p/£5.5m)

Companies: CPX GFIN MWE NWT

15 Sep 20

Consistent progress, relentless focus 2.4m subscriber base underscores growth potential

Kape has enjoyed a good first half of 2020 both in terms of operational progress and financial performance. Revenues increased 97% to $59.0 million (H1 2019: $29.9 million), a 12% increase on a pro-forma basis. The interim results reflect the Group’s continuing success in integrating its Private Internet Access (PIA) acquisition while growing subscriber numbers – now just shy of 2.4m in total - across the businesses. The focus on customer lifetime value is evident in the marketing spend and investment in new product development. Kape remains on track to meet previous guidance for the full year and expects to deliver synergies from the PIA deal at the top end of the mooted range. We believe that the Group has good revenue visibility and it continues to maintain a high level of user retention at 80%. We make no changes to estimates other than to reflect a higher amortisation charge. In our view, the interim results show that Kape continues to display the drive and capacity to meet the growing needs of consumers for digital privacy and security products in a rapidly evolving marketplace.

Companies: Kape Technologies Plc

14 Sep 20

Codewise: Smart with traffic

CentralNic has agreed to acquire Codewise, which consists of Zeropark, a monetisation business similar to Team Internet, and Voluum, a complementary online marketing SaaS provider. CentralNic is consolidating and market at attractive valuations, delivering synergies and improving target company operations. Overview: Zeropark operates a marketplace for domain name investors seeking monetisation and marketers seeking traffic. Voluum provides a SaaS marketing platform that helps SMBs track and analyse traffic sources, campaigns and performance data to optimise advertising campaigns. Codewise generated revenue of $60.3m and Adjusted EBITDA of $7.4m in the LTM ended June 2020.

Companies: CentralNic Group Plc

15 Sep 20

Reassuring trading update

Avingtrans has issued a brief trading update and confirmed that the Group’s preliminary results to 31st May 2020 will be published on 30th September. The trading update is reassuring, highlighting a Q1FY2021E order in-take in-line with management expectations. The statement also highlights two further contract wins in the nuclear sector for US$2.8m in South Korea to provide spare parts for essential water service pumps and a £1.5m UK contract for replacement valves. The previous update in early July has already confirmed that the Group expects to report revenue of £114m, EBITDA of at least £11.5m and net debt (excluding IFRS16 lease liabilities) of £7.5m, which is incorporated into our FY2020E forecasts. It would seem likely that the Group will wish to re-instate forward guidance at the time of the results and to this end we would expect management to indicate a year of solid progress in EBITDA for FY2021E. Over the first quarter the Group has demonstrated good resilience, operating at close to normal levels, with the exception of Oil & Gas (where there is fairly limited exposure) and HVAC activities at Ormandy, supported by exposure to multiple markets and a strong customer base that includes governments and their agents.

Companies: Avingtrans Plc

18 Sep 20

Guidance upgrade, again

The continuing fast-growing online business and well-managed product mix have resulted in better than expected profitability for H1 20 and, with the rapid recovery in recent weeks, the group has upgraded again its guidance for FY 20. The group is expecting adjusted pre-tax profit to be £300m for FY 20 vs. £195m (previously revised at the end of July).

Companies: Next Plc

18 Sep 20

Bango reports record revenue growth in the first half of 2020

18 Sep 20

Rhino-Powa Group Update Note - September 2020

Rhino’s second series of 5-year bonds offers exposure to a private company with an enticing set of characteristics, combining significant growth potential with proven ability to deliver over a 40-year history. Having spent several years shifting its business model away from capital-intensive production towards closely controlled licensing, and then investing heavily in increasing exposure at the top level of international rugby, Rhino is in a position to generate significant free cashflow to service this 5.5% couponand offer attractive growth potential, further strengthening debt serviceability ratios.

Companies: Rhino Rugby Bonds Plc

18 Sep 20

Auris Medical Holding - A nasal spray to help protect against COVID-19

Auris recently announced the development of the AM-301 nasal spray for protection against SARS-COV-2 (COVID-19) infection (though it is also intended to protect against other airborne pathogens and allergens as well). AM-301 is a gel that would form a protective layer in the nasal mucosa, preventing contact between the pathogen and cells. In vitro data so far suggest contact between AM-301 and COVID-19 reduced the viral load by up to 99%. The company is targeting regulatory submission as an over the counter (OTC) product in 2021.

Companies: Auris Medical Holding Ltd.

18 Sep 20

New NRA signed, but PIK refinancing still key

New roaming (NRA) signed with Telia with effect from 1 January 2021 The agreement is expected as the current with Telia expires in 2021 Reflected in our estimates as in-line with Market-15 regulation Refinancing of PIK debt is crucial for the equity case and our view on ICE

Companies: Ice Group ASA

18 Sep 20

Auctus on Friday - 18/09/2020

Panoro Energy (PEN NO)C; Target price NOK23.00 per share: Boosting returns in Gabon, gearing for exploration - BW Energy, the operator of the Dussafu licence is reviewing the development concept of Hibiscus and Ruche with a jack-up conversion instead of a new build wellhead platform. Overall, this could reduce the break-even of the project from US$30/bbl to US$25/bbl, reflecting the current low cost of barges. The operator now estimates that the project would achieve an IRR of 15% at US$30/bbl (US$35/bbl previously). Pending more visibility on the new development plan, gross capex could be 20% lower than the previously anticipated US$400 mm. The development is expected to restart in 4Q20. Net to Panoro’s 7.5% WI, the potential net savings would represent ~US$6 mm, almost ~8% of the current market cap. Given Panoro’s high cost of capital, this could be material as Panoro could redeploy the freed-up capital on other initiatives. Panoro shares trade in line with our 2P NAV of ~NOK10 per share that does not factor in the potential lower capex in Gabon. In addition, Panoro continues to offer near term diversified and high impact exploration upside with an aggregate unrisked value for the programme of almost NOK30 per share (~3x the current share price). An enhanced balance sheet with lower development cost in Gabon provides additional fire power to the exploration drilling activities. The Salloum West appraisal well (unrisked NAV of >NOK3 per share) is expected to be drilled in 1Q21. Subject to completion of farm-out transactions with Africa Energy, the company will then drill a very high impact exploration well drilled in South Africa (unrisked NAV of NOK15 per share). Drilling the upside at the Greater Hibiscus area later in 2021 has an unrisked value of NOK10 per share. SDX Energy (SDX LN)C; Target price £0.40 per share: Initiating Coverage - SDX Energy is a £35 mm market cap full cycle exploration and production company with low cost (6 mboe/d) and reserves (>10 mmboe) in Egypt and Morocco. In contrast to most peers, SDX’s business is insulated from oil price moves with ~90% of the production being fixed-price gas on LT contracts. Recent drilling successes have opened up additional low risk/low cost/short cycle exploration and development upside in both countries. SDX will soon embark on a multi-year exploration programme. With infrastructure already in place, any discovery will be highly accretive and can be developed from SDX’s own source of funds. SDX shares trade at EV/DACF multiples of ~1.3x in 2020. Our 2P NAV is £0.27 per share, representing 70% upside. The prospective resources already identified have an unrisked NAV of £0.12 per share for Egypt (+75%) and £1.03 per share for Morocco (+600%). The main exploration drilling programme is restarting in 2021 but the company should test the LMS-2 well in Morocco in 4Q20, should COVID-19 restrictions be lifted. A success would derisk ~5 bcf WI resources at LMS-2 (+£0.13 per share) and a further ~20 bcf WI resources in the wider La Mimouna area (+£0.50 per share). Our target price of £0.40 per share (~ our ReNAV) represents ~150% upside. IN OTHER NEWS ________________________________________ AMERICAS Trinity Exploration and Production (TRIN LN): 1H20 results – 1H20 production in Trinidad was 3,282 bbl/d. FY20 production is still expected to be in the range of 3,100 - 3,300 bbl/d. Trinity held US$19.7 mm in cash as at 30 June 2020. EUROPE ADX Energy (ADX AU) and Reabold Resources (RBD LN): Flow test results in Romania below expectations – Following acidisation, the flow rate of the Iecea Mica-1 well was below expectations. BP (BP LN) and ENI (ENI IM): Discovery in Egypt - The Nidoco NW-1 exploratory well discovered gas-bearing sands for a total thickness of 100 m, of which 50 m is within the Pliocene sands of the Kafr-El-Sheik formations and 50 m within the Messinian age sandstone of the Abu Madi formations. The Great Nooros Area gas in place is now be estimated > 4 tcf. Deltic Energy (DELT LN): Resources update – The Cadence, Cordova, Bathurst and Basset prospects hold 597 bcf, 124 bcf, 275 bcf and 128 bcf prospective resources (P50) respectively. These licences were recently offered to Deltic and are located in the Southern North Sea. IGas Energy (IGAS LN): Acquiring Geothermal business – IGas is acquiring GT Energy, a developer of deep geothermal heat projects onshore UK. GT Energy's principal project is a 14 MW deep geothermal project in the Etruria Valley, Stoke-on-Trent. IGas will make an initial payment of £500,000 to be satisfied by the issue of 2,222,223 IGas ordinary shares. There could be further payments according to milestones associated with progress at GT Energy’s project. The maximum payable consideration is £12 mm with new ordinary shares of IGas not exceeding 29.9% of the share capital of IGas. GT Energy has entered into a term sheet with Gravis Capital Management to fund a significant proportion of the ~£20 mm project through a limited-recourse debt facility. Independent Oil & Gas (IOG LN): Potential offer to acquire Deltic Energy (DELT LN) – Independent Oil & Gas is considering a possible all-share offer for the Deltic. Premier Oil (PMO LN): Considering transaction with Chrysaor – Premier Oil is in discussions with Chrysaor as a potential alternative to the proposed equity raise. The preferred route remains the re-financing announced previously. Union Jack Oil (UJO LN): Equity raise – Union Jack is raising £7 mm of new equity at a price of £0.16 per share. The proceeds of the fundraising will be used to (1) pay the deferred cash consideration due on first oil production at the Wressle development in 4Q20, (2) drill a side-track well at the Biscathorpe discovery in 2021 and (3) ongoing investment in the other conventional onshore drill-ready projects including a proposed low-cost, side-track well at the producing Keddington oilfield and a proposed conventional well at North Kelsey. FORMER SOVIET UNION Caspian Sunrise (CASP LN): 1H20 results – 1H20 production in Kazakhstan was 1,494 boe/d with production of 1,643 boe/d at the end of June. The company held US$0.2 mm in cash at the end of June. MIDDLE EAST AND NORTH AFRICA Energean (ENOG LN): New gas contract in Israel– Energean has signed two new Gas Sales and Purchase Agreements which, combined, represent quantities of gas of up to 1.4 bcm/y and increase total firm contracted gas sales from the Karish project to approximately 7.0 bcm/y on plateau. SUB-SAHARAN AFRICA Global Petroleum (GBP LN/AU): Raising £1.4 mm of new equity – Global is raising £1.4 mm of new equity priced at 0.75p per share. Subscribers are also being issued 1 warrant per share with a strike price of 1.5p.

Companies: BP/ CASP ENOG ENI PEN PMO RBD SDX

18 Sep 20

Panoro Energy ASA (OSE: PEN): Boosting returns in Gabon, gearing for exploration

• BW Energy, the operator of the Dussafu licence is reviewing the development concept of Hibiscus and Ruche with a jack-up conversion instead of a new build wellhead platform. Overall, this could reduce the break-even of the project from US$30/bbl to US$25/bbl, reflecting the current low cost of barges. The operator now estimates that the project would achieve an IRR of 15% at US$30/bbl (US$35/bbl previously). • Pending more visibility on the new development plan, gross capex could be 20% lower than the previously anticipated US$400 mm. The development is expected to restart in 4Q20. • Net to Panoro’s 7.5% WI, the potential net savings would represent ~US$6 mm, almost ~8% of the current market cap. Given Panoro’s high cost of capital, this could be material as Panoro could redeploy the freed-up capital on other initiatives. • The last two development wells at Tortue are expected to be drilled in 2Q21. This is likely to be followed by two exploration wells at Hibiscus to firm-up the 110 mmbbl upside identified on seismic (~8 mmbbl net to Panoro, representing ~100% of the company’s YE19 WI 2P reserves in Gabon). An E&P story with the right ingredients Gabon is Panoro’s core asset and the enhanced economics of the Dussafu development boosts the attractiveness of an investment in Panoro. Importantly, the likelihood of development activities restarting in 4Q20 improves the visibility on production and cash flow growth. Panoro shares trade in line with our 2P NAV of ~NOK10 per share that does not factor in the potential lower capex in Gabon. In addition, Panoro continues to offer near term diversified and high impact exploration upside with an aggregate unrisked value for the programme of almost NOK30 per share (~3x the current share price). An enhanced balance sheet with lower development cost in Gabon provides additional fire power to the exploration drilling activities. The Salloum West appraisal well (unrisked NAV of >NOK3 per share) is expected to be drilled in 1Q21. Subject to completion of farm-out transactions with Africa Energy, the company will then drill a very high impact exploration well drilled in South Africa (unrisked NAV of NOK15 per share). Drilling the upside at the Greater Hibiscus area later in 2021 has an unrisked value of NOK10 per share.

Companies: Panoro Energy ASA