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30 Jul 20

Belvoir Group - Forecasts upgraded, strategy continues to deliver

Since the restrictions were lifted in mid-May, Belvoir has seen a surge in activity due to pent-up demand, resulting in June being a record breaking month for the group’s Newton Fallowell estate agency network in terms of instructions and sales and the financial Services division in terms of written income. Management have stated that with the positive impact of the stamp duty reductions still to take effect they are confident that the Group is well positioned to capitalise on the current market upturn and to take advantage of the opportunities arising from more challenging conditions. We have upgraded our PBT forecasts for FY 2020 to the level we forecast pre-COVID. We have also upgraded our target price from 169p to 233p and highlight that H1 2020 has demonstrated the resilience of the group, management’s ability to navigate difficult market conditions and the power of the franchise-led strategy.

Companies: Belvoir Group Plc

29 Jul 20

Avacta Group - Termination of coverage

Edison Investment Research is terminating coverage on Avacta Group (AVCT), BCI Minerals (BCI), Destiny Pharma (DEST), Globalworth Real Estate Investments (GWI), Henderson Alternative Strategies Trust (HAST), Herantis Pharma (HRTIS), Jupiter Green Investment Trust (JGC) and Rockhopper Exploration (RKH). Please note you should no longer rely on any previous research or estimates for these companies. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website

Companies: Avacta Group Plc

03 Aug 20

Cenkos: Seeing Machines Ltd - Better trading than expected

Seeing Machines has released a trading update demonstrating the business is performing better than expected on key metrics: Revenues of A$39.7m were 13% ahead of our expectations of $35.1m and cash of A$38.7m was 21% ahead of our expectations of A$32.0m. We believe this strong end to the financial year reflects the continued demand for the company's Fleet product by sophisticated fleet owners and that the key home markets of Australia and New Zealand have been less affected by COVID than feared. We believe this strong cash performance should reduce the perceived funding risk weighting and help the valuation recover towards previous levels. We iterate our Buy recommendation and 7.2p price target.

Companies: Seeing Machines Ltd.

03 Aug 20

Making the most of lockdown

As is characteristic of this company, management has acted swiftly to execute an additional acquisition, putting the placing proceeds to work with another immediately earnings-enhancing acquisition, creating a Group with diversified revenue and profits, significant growth potential and greater visibility in a post-COVID world. We reintroduce estimates with CAGR in revenues of 29% between FY 2021 and FY 2023 and a CAGR in EBITDA of 34%. Quantuma, an insolvency and restructuring specialist targeting SMEs, is being acquired for £26.95m from existing resources to give an EBITDA multiple of 7.47x (EBITDA March 2020: £3.6m). Our forecasts take into account the greater visibility and predictability that the recent acquisitions bring to the Group. Our new SOTP valuation arrives at a reinstated price target of 300p.

Companies: K3 Capital Group Plc

04 Aug 20

Cenkos: Shearwater Group Plc -- Cautious on Covid

Shearwater delivered adjusted EBITDA ahead of expectations. FY20A was a strong year with the Group delivering maiden profitability and an enhanced margin profile. Cybersecurity and resilience are enduring themes but we are now cautiously presenting a picture of unchanged profitability in FY21E as a measure against the impact of COVID-19.

Companies: Shearwater Group Plc

29 Jul 20

Cenkos: Pelatro Plc -- Expansionary raise

Pelatro has raised $2.7m in an equity Placing to fund an expansion in sales headcount and marketing activities in order to further expand the business, subject to shareholder approval. The product suite is fully developed and ready to be taken to a much broader set of customers. The beneficial impact of this expansion should be felt from the end of 2021E onwards.

Companies: Pelatro Plc

30 Jul 20

Still winning major deals

Sopheon has this morning announced a major win for Accolade – the global snack food giant, Mondelez. The deal is good evidence that Sopheon continues to win material deals despite the pressures of COVID-19, and that its innovation management platform is genuinely market-leading. We continue to believe that the group will see a return to strength as the market slowly recovers, and see today’s announcement as a useful signal.

Companies: Sopheon Plc

03 Aug 20

The Ince Group plc* - Stabilisation and Cause for Optimism

While Ince's FY20 results are complex given the various movements in reported figures associated with accounting for the Ince International consolidation, our assessment is that there are emerging signs of increasing operational effectiveness and reasons for optimism for investors. The operating environment and outlook remains opaque and thus we keep our forecasts and recommendation for the Group withdrawn at this time.

Companies: The Ince Group plc

03 Aug 20

Another positive trading update lifts forecasts

Byotrol released a further positive trading on the back of a strong Q1 FY 2021, citing product sales in excess of £3.4m in the quarter and for the business to significantly exceed full-year market forecasts. With the order book at the end of June still being c.£2m (similar to at 30 April) and continued improving supply chain management for biocidal ingredients, we have upgraded forecasts to reflect this outlook. We increase FY 2021 revenues, adjusted EBITDA and EPS by 15%, 38% and 55%, respectively. Consequently, we upgrade our target price to 10p, at which level the stock would trade on 3.7x sales. As previously indicated, we think the pandemic should result in a secular shift towards improved disinfection prevention, reducing the prospect of FY 2021 being a one-off exceptional performance. The prospect for further upgrades should current monthly revenues extend for longer than anticipated and additional IP monetisation events should not be discounted, in our view, either.

Companies: Byotrol Plc

29 Jul 20

Resilient performance and confident outlook

Hargreaves’ FY20 results are very solid indeed. As previously reported, the only noticeable impact from COVID was in the slippage of Blindwells’ land sales, which were due to conclude during the lockdown period. Site activity has resumed and sales remain on track to conclude in the current year. A final dividend of 4.5p has been declared and the outlook statement is measured but confident. We reintroduce forecasts today, effectively reinstating our pre-COVID expectations. Hargreaves is well positioned to deliver a period of significant, renewed growth with the prospect of a double digit dividend yield from FY22 as HRMS profits are distributed.

Companies: Hargreaves Services Plc

03 Aug 20

Signs Softcat as a reseller, momentum elsewhere

Smartspace released positive news for both Space Connect and SwipedOn on Friday, sending the stock nearly 50% higher. Space Connect has signed a distribution agreement with Softcat and the SwipedOn has posted 80% yoy growth in AAR. Encouragingly too, SMRT also flagged current net cash at £1.7m (vs. £1.9m in April) demonstrating impressive reliance despite a challenging macro backdrop. In fact, SMRT has adapted quickly and is proving a ‘Covid beneficiary‘, seeing strong inbound demand as customers look for safe news ways to conduct business. Reassured by this, we continue to believe that Space Connect and SwipedOn could be worth considerably more than the current market cap.

Companies: Smartspace Software Plc

28 Jul 20

Open Orphan* - COVID-19 Vaccine Ph I Trial Contract Signed

Open Orphan has announced the signing of a new contract with Codagenix Inc, a vaccine developer, to conduct a phase 1 trial for a COVID-19 vaccine candidate. The trial will focus on evaluation of safety and immunogenicity of the single-dose intranasal candidate in 48 volunteers. Although this is a phase I trial, in our view, it goes some way to validate Open Orphan's offering in the market and could lead to follow-on contracts. We expect the opportunity available to Open Orphan continues to increase and that H2 2020 should bring further good news flow and momentum to the stock. Reiterate buy

Companies: Open Orphan Plc

03 Aug 20

Rebound post lockdown

What’s new: Purplebricks Group results for the year to 30 April 2020, show the Australian and US units as discontinued; but include the Canadian unit sold for C$60.5m (i.e. £35m) in July. Investors will focus on the UK unit which revealed:  11% fall in UK revenue to £80.5m (FY19: £90.1m), as the number of instructions fell 23% (impacted by early Covid uncertainty and lockdown), but the average revenue per instruction “ARPI” rose 12% to £1,394;  UK gross profit margin improved to 64.1% (FY19: 63.0%);  UK marketing costs to revenue improved to 25.6% (FY19: 29.6%);  Spend on Digital capacity pushed UK operating costs 32% to £26.2m (FY19: £19.9m), as new management team pursued initiatives which are being “delivered at pace with significant opportunity for further innovation.”  UK adjusted EBITDA fell 53% to £4.8m (FY19: £10.2m).

Companies: Purplebricks Group Plc

28 Jul 20

Trading activity improves and NED appointment

The group has announced its H1 trading update, with a challenging Q2 due to lockdown effects albeit with improving trends throughout the quarter. With previously outlined cost savings of £1.6m and additional restructuring delivering a further £1m of annualised savings, the group expects the second half to be profitable and cash generative. Net debt at £14.6m has reduced a further £1m since March. Our forecasts and price target remain under review.

Companies: Flowtech Fluidpower Plc

30 Jul 20

Reduced credit loss absorption capacity

As expected, the quarter saw a sharp increase in loan impairments. However, one can wonder if the increase was not capped by the group’s willingness to keep its results afloat. Management’s downbeat guidance in terms of revenue recovery potential and cost reduction does not bode well as regards the group’s future credit loss absorption capacity.

Companies: Lloyds Banking Group

04 Aug 20

NQ Minerals chairman welcomes record production at Hellyer in July

04 Aug 20

Nasty marks of reality

In the light of the settlement of the majority of glyphosate-related plaintiffs, Bayer took €12,050m legal costs into account (also for dicamba and PCB). Regarding future litigation, there is currently no agreement in place. Bayer’s operational performance was less pronounced in Q2, despite Crop Science’s stronger one. Pharmaceuticals and Consumer Health reported weaker than expected figures. Management now expects a stronger negative impact from the pandemic and has adjusted the guidance accordingly.

Companies: Bayer AG

04 Aug 20

Games Workshop Group - Winning performance

Games Workshop’s (GAW) FY20 results show that demand post lockdown, during which the company initially suspended all trading, has surprised on the upside, leading to a greater profit outturn than recently anticipated by management. Management is aiming to grow revenue in FY21e, while maintaining the operating margin given a focus on leveraging Online (19% of group revenue) as the economic environment will likely lead to lower growth for Trade (52% of group) and a decline in Retail (29% of group) revenue. Our new forecasts for FY21e are for revenue to increase by 2.1% and PBT to decline by 5% due to lower royalty income.

Companies: Games Workshop Group Plc

04 Aug 20

Immotion CEO says opening of flagship 'Ocean Explorer' at Mandalay Bay is major milestone

04 Aug 20

Q3 20: slight beat on consensus and solid Q4 guidance

Infineon released its Q3 figures which included Cypress for the first time, the earnings of which have been allocated to ATV, PSS and CSS. Overall, Q3 sales beat consensus expectations while there was a slight disappointment at the profitability level, hampered by both pandemic and Cypress-related costs. Going forward, Infineon anticipates solid growth for Q4, driven by the early signs of stabilisation as well as a one-off effect due to consolidation.

Companies: Infineon Technologies AG

04 Aug 20

Can the Varian Healthineers deal ignite acquisitive interest in Elekta?

Benefiting from the super-rich valuations offered by Siemens Healthineers for the proposed acquisition of Varian Medical, Elekta, a direct competitor, surged c.15% yesterday. With the No.1 player in the oligopolistic radiation therapy market now grabbed, there is a possibility that the No.2 player, Elekta, might also be grasped by an industry bigwig. In our view, Royal Philips, which has been a strategic partner for Elekta, might be interested in the family-owned business in the mid-term.

Companies: Elekta AB

04 Aug 20

ADM Energy's Head of New Ventures talks financing strategies and 2020 marginal field bid round

04 Aug 20

Missed FY20 expectations with H2 slightly worse

FY20 top and bottom line missed expectations and Diageo didn’t provide guidance for next year. Improvements expected in the coming months thanks to lockdown restrictions easing, though the margin should still be under pressure for the next six months.

Companies: Diageo Plc

04 Aug 20

Cenkos: Shearwater Group Plc -- Cautious on Covid

Companies: Shearwater Group Plc

04 Aug 20

Numbers below on lower rate and utilisation

Adj. EBITDA ~21% below consensus and ~18% below ARCe… …as achieved rate and utilisation fall short of expectations We expect the share to trade lower on the back of the report

Companies: Dorian LPG Ltd.

04 Aug 20

Encouraging positioning and focus

K3’s recent (delayed) announcement for the last financial year contained commentary about the Group’s performance in the current operating environment. Today’s interim announcement builds on that with emphasis on the future of the Group as a smaller, more own-IP rich business following its exit from the UK Dynamics operation. K3 has a supportive level of resilience from its recurring revenues, its customer base and its financial position. Crucially, management sees significant upside from its K3|imagine platform and associated solutions. Although we do not reintroduce estimates at this point, we hope to review this later in the year, and would suggest that the overall EBITDA performance might be in the range £5-6m.

Companies: K3 Business Technology Group Plc

04 Aug 20

SP Angel . Morning View

Centamin (CEY LN) – H2 profits rise 280% as company maintains 2020 production guidance | Chaarat Gold* (CGH LN) - BUY– H1/20 production in at 27koz with FY20 guidance reiterated at 55koz, Tulkubash funding closure on course for YE20 | Edenville Energy* (EDL LN) – Rukwa coal operations restart | Pensana Rare Earths (PRE LN) – Final drilling results from Longonjo | Serabi Gold* (SRB LN) – Extension to drawdown period for the convertible loan | Versarien (VRS LN) - Launch of graphene enhanced protective face mask

Companies: CEY CGH EDL PRE SRB VRS

04 Aug 20

Oil & Gas Daily Flow

Union Jack Oil* (UJO LN): Significant progression made at flagship West Newton project | Pharos Energy (PHAR LN): Two-year extension granted at TGT field, Vietnam

Companies: Union Jack Oil Plc Pharos Energy Plc

04 Aug 20

Picton Property Income - Reinstating forecasts following robust Q121

Despite challenging market conditions, Picton’s Q121 DPS was well-covered by EPRA earnings and robust portfolio capital values. Combined with low gearing, NAV per share was just 1.3% lower versus Q420 and including DPS paid, the NAV total return was -0.6%. With encouraging rent collection data continuing and the lockdown easing, we have reinstated our estimates and look for the quarterly DPS run-rate to increase in H221.

Companies: Picton Property Income Ltd.

04 Aug 20

SP Angel Healthcare Conditions- 04-08-2020

Redx Pharma (REDX.L): Out licensing agreement with AstraZeneca | Genedrive (GDR.L): Collaboration with Beckman Coulter to automate SARS-CoV-2 PCR testing

Companies: Redx Pharma Plc Genedrive Plc