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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

10 Feb 20

EBITDA margin sustains profit growth

Despite slower than expected sales growth, UPGS reconfirmed FY2020 profit guidance in a trading statement released today. Other features of H1 included extension of UPGS’s bank facilities and a 10-year addition to the Manor Mill lease. The company continues to monitor the effect of coronavirus closely, and its potential impact on sourcing from China. The central long-term growth message remains in place.

Companies: Up Global Sourcing

10 Feb 20

WHI First Light: Caspian Sunrise, Watchstone Group & Water Intelligence

Caspian Sunrise (CASP) – Corporate – Operational Update Market Cap £140m Share Price 7.7p Caspian Sunrise announced that the Deep Well A5 sidetrack has flowed for a period of 40 days and management stated it continues to believe that the well is capable of producing at a rate of at least 1,500 b/d. The company is focusing on ensuring flow is maintained by adjusting the wells choke size to maintain a constant reservoir pressure. The company stated it is planning to optimise the well through an acid job later in February and that the operation is expected to take three days. Watchstone Group (WTG) – Corporate – Pre-close trading update and planned capital return to shareholders Market Cap £68.4m Share Price 148.5p Watchstone has this morning released a pre-close update for the year ended 31 December 2019, as well as announcing a planned first tranche return of capital to shareholders by the end of June 2020, subject to approvals. Water Intelligence (WATR) – Corporate – FY trading update ahead of expectations Market Cap £44.2m Share Price 317.5p WATR has published another strong update this morning, demonstrating that the company is able to generate strong double digit growth in revenues while at the same time expanding margins. FY2019E results are reported to be well ahead of the prior year on both the sales and the profit lines (+27% and +36% respectively), while no less than 9% ahead of forecasts. Showing again that the company is able to grow sales and margins at the same time, PBT margins are up >150 basis points, while operating margins in the key Corporate activity are at 13.5% (also +150bp).

Companies: CASP WTG WATR

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

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

10 Feb 20

The Industrial Revelation

German industrial production falls in Dec missing expectations, Skanska expects strong outlook for US construction

Companies: CGS HAYD HEAD HILS JHD RNO TWD TRI ZTF SOM GHH

10 Feb 20

ReNeuron Group - Zero overhang

The last 16.42% of the former Woodford stake in ReNeuron has now been sold to Obotritia Capital. The rest of the former Woodford stake, 16.58%, is now managed by Schroders in an investment trust. Removing the 16.42% overhang should help the shares to stabilise and recover. Clinically, ReNeuron aims to present more retinitis pigmentosa eye data during 2020 adding to the strong initial data. Stroke data from the CTX PISCES III trial are expected around mid-2021. We value ReNeuron at £197m, unchanged.

Companies: Reneuron 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

10 Feb 20

WHI Morning Comment: Water Intelligence (WATR)

Growth and value; adj. PBT +36% YoY, 9% ahead of views, delivering 1 year early WATR has published another strong update, demonstrating that the company is able to generate strong double digit growth in revenues (+27%) while at the same time expanding margins, a winning combination. Both sales and profit growth outpaced expectations generously, with a 9% beat to our forecasts at both levels. Particularly pleasing are (1) the ongoing growth in franchisee revenues – despite reacquisitions, organic growth remains a significant feature, (2) corporate location revenue and margin growth, +44% including reacquisitions but double digit even if these are excluded, and (3) the B2B channel (insurance-led) generated a sparkling +41% increase in sales. WATR is rolling out a strategy which has had long gestation, featuring a nation-wide presence across forty-six US states, technical skill-sets, overseas expansion and, ultimately the huge drivers for saving water in the modern world (annual multi-billion $ domestic pay-outs by US insurers alone). Major entry barriers remain. The company is effectively delivering a year early. Given our 500p fair value, we see significant upside for the shares together with a significant buying opportunity.

Companies: Water Intelligence

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

Clean up quarter, growth should pick up in Q1

Sbanken ASA (SBANK) reported its Q4 result today and contained some non-recurring items. The flat lending book is our main concern, but we expect growth within home loans to pick up in Q1. Following an increase in opex our 2020/2021 EPS is lowered 3%/2%, but we still see a high likelihood of M&A this year and also believe the bank’s value on a standalone basis is higher than today’s market value. We reiterate Buy and target price of NOK 85.

Companies: Sbanken ASA

14 Feb 20

Buy Aker BP at a discount through Aker

DPS was broadly as expected at NOK 23.5, representing a 4.6% yield and a pay-out of 3.5% of NAV; the latter is in the high-end of the 2-4% target range. Limited new information on the portfolio companies: FID for Aker Energy is expected in 2020 (as expected) and market outlook for oil service remains tough (as expected). AKER currently trades at an adjusted discount of 24%. Target price reduced to NOK 708; 55% of current upside is linked to Aker BP. Buy reiterated.

Companies: AKER ASA-A SHARES

14 Feb 20

Resilient TV advertising, good development outside TV

In 2019, TV advertising revenue was resilient. In the French TV advertising market which declined, M6 had stable organic TV advertising revenue despite a tough Q4 19 (-3.4% organically) affected by lower demand from advertisers due to the social unrest in France. The TV EBITA margin was stable (22% of revenue). In Radio and Production & Audiovisual rights, the contribution to group EBITA increased thanks to additional synergies in radio and a good year for the distribution of films.

Companies: Metropole Television

14 Feb 20

A strong Vivendi redeems a challenging FY19 for the core activities

Bolloré released sales figures that, despite falling in line with our estimates, paint a worrisome picture for the group’s ‘core activities’ (i.e. excluding Vivendi). Particularly in the context of a latent global slowdown due to the Covid-19 outbreak and its potential impact on global freight volumes and oil product prices. The outlook for 2020 may not differ much from the disappointing performance of Bolloré’s core businesses in 2019.

Companies: Bollore

14 Feb 20

Never ending restructuring story

The quarter was characterised by a fall in the tangible book value per share in spite of an inflated bottom line. However, this was offset by a sharp reduction in capital usage. 2020 will be another year of restructuring amplified by the late decision to refocus NatWest Markets while the top line will be under pressure.

Companies: Royal Bank Of Scotland Group

14 Feb 20

Xpediator's Stephen Blyth outlines five-year growth plans as core businesses 'perform strongly'

14 Feb 20

Savannah Resources' David Archer discusses outlook for EVs and lithium

14 Feb 20

Strong Q4 but mid-term outlook slashed

Acceleration in sales in Q4, driven by Somatuline, ensured that the full year sales and profitability targets were achieved. However, an impairment charge was booked following the disappointing clinical results of Palovarotene. Combined with the entry of generics for Somatuline and the slower than expected uptick of Onivyde, the FY22 targets have been slashed. M&A could put the business back on track but the interim CEO should reassess the company’s acquisition strategy before making any move.

Companies: Ipsen

14 Feb 20

Optibiotix Health makes strong start to 2020 with new product launches and agreements

14 Feb 20

Great cash generation but sacrificing the dividend in return for a healthier balance sheet

The results for 2019 are average to say the least (organic growth of +0.7%) and a meagre €0.58 EPS (2018: €0.77). On the positive side, the free cash flow before dividend looks massive at €244m (€3.83/share), up from €-33m last year, but half of this counts as window dressing. The shareholder is confronted with a sudden dividend cut to €0.24 (€0.60 promised) but, at last, a healthy net debt ratio in return.

Companies: Tarkett

14 Feb 20

Still burning cash in Q4

There are high hopes of lifting the high taxes on US polysilicon after the Phase I trade agreement between the US and China, which seems to have forced management to rethink its decision regarding Moses Lake. Changing the accounting method for the Yulin JV looks to us like a confession of loss of control in the JV. Our profitability expectations were higher as we had expected lower costs for the remaining operations.

Companies: REC SILICON

14 Feb 20

H1 2019/20: publication in line, but not enough to bring enthusiasm

The publication was in line with estimates, though it was not enough to bring much enthusiasm to the market. The underlying trends remain challenging, except for Mobile Connectivity, but this represents only 6% of the topline. We anticipate an operational improvement in H2, but we will reassess our figures.

Companies: Eutelsat Communications

14 Feb 20

Europa Metals' Laurence Read details geotechnical study for Toral

14 Feb 20

Pembridge Resources CEO details growth strategy and development plans

14 Feb 20

Deliveries fell by 5.2% in January

China has started to be a drain on VW’s vehicle deliveries in the last month and the current month is expected to be much worse. From a product point of view, van and truck deliveries fell disproportionately strongly. All passenger car brands combined saw their delivery volume falling by 4.4% to 791k.

Companies: Volkswagen