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19 Sep 18

Cenkos: Seeing Machines Ltd - Smooth transition for fleet

This morning, Seeing Machines released its FY18 results within which there is an increase in the forecast revenues from the five automotive OEM deals to A$138m (from A$110m), demonstrating the ever-broadening scope for DMS. The board has opted for a smooth transition to a license model for the fleet business and based on this we have substantially pared back our revenue expectations for FY19. Despite this, we believe Seeing Machines remains funded through FY19 thanks to lower expected cash requirements associated with the license model. We re-instate our BUY recommendation and adjust our target price to 15p (from 19p) to reflect recent events.

Companies: Seeing Machines

18 Sep 18

Board changes accompany Interim results

Interim results are in line with the previous trading update, although the outlook statement now points to some slightly softer market conditions, particularly in Flowtech’s engineering-oriented business. The company has recently seen a delay for a customer contract in PMC, which is likely to result in the group trading marginally below expectations. Sean Fennon has also announced that he is retiring as CEO, with Bryce Brooks stepping up to the plate. We reduce our 2018 EPS forecast by 7.7% to 14.8p, with a 5.7% reduction also in 2019. Our TP also reduces by 7% from 215p to 200p.

Companies: Flowtech Fluidpower

18 Sep 18

Cenkos: CloudCall Group Plc - New CRMs to drive additional growth

The 30% revenue expansion secured in H1A has been driven by voice-only products. H2E will see a broadened launch of the unified communications platform and further growth opportunities. The recent fund raising has helped finance the development of a scalable architecture and widen the number of CRM integrations which should lead to supplemental revenue expansion thereafter. The over-sold stock price is not fairly valuing the enlarged addressable opportunity in our opinion.

Companies: Cloudcall Group

19 Sep 18

FY 2018 results – Boots to range Skinny Tan

Full-year results were in broadly line with the 19 June trading statement, with revenues rising 21% to £10.7m (£0.3m shortfall attributed to timing and despatch of June sales into July), resulting in a pre-tax profit of £0.7m and year-end cash of £1.9m. Confirmation that Boots is to range Skinny Tan online and in 1,250 (50%) of its UK stores from February/March 2019 significantly expands the retail footprint to more than 2,000 stores (2.7x), whilst Roots should benefit from a 4x expansion to more than 1,600 stores by year-end. We retain a 220p target price, which implies a calendar-adjusted 2019 P/E, EV/EBIT and EV/Sales of 24x, 14.0x and 1.8x, respectively. Strong growth expectations justify these premia.

Companies: Innovaderma

17 Sep 18

CEO Appointment & board changes

boohoo Group has this morning announced the appointment of John Lyttle as Group CEO (effective 15th March 2019) and the re-alignment of its wider executive board as it positions itself for the next stage of growth. John is currently the COO of Primark, one of Europe’s fastest growing and most profitable retail businesses, a role he has been in for eight years. His appointment brings complementary operational experience to boohoo’s senior management team as it focuses on rolling out the infrastructure and technology needed to realise its ambitions of reaching £3bn in annual sales. Joint co-founders Mahmud Kamani and Carol Kane will remain close to the businesses, moving to Group Executive Chairman and Group Co-Founder and Executive Director respectively, with a focus on driving the longer-term strategy and creative vision for the enlarged Group. Current Non-executive Chairman Peter Williams will step down from his role next March with a replacement NED role to be announced in due course. Interim Results will be announced on 26th September, and the shares trade on 44.3x FY19 PE based on Friday’s close.

Companies: Boohoo.Com

18 Sep 18

A year of transition

H1/FY2018 represents another period of significant development at Flowtech. Organic growth of c.9% and the benefit of the Balu acquisition in March for £10.2m, alongside four during H2/FY2017, has seen revenue increase by 65.1% to £56.4m, and operating profit from £4.5m to £5.7m (margin 10.1%). These acquisitions have also driven an improvement in the gross margin by 2% to 36.1%. The Board remains highly confident in the direction of travel and its commercial positioning to capture much further scale within the €12.4bn European fluid power sector. However, the shorter-term focus is firmly on investment that can deliver sustained operational improvements, procurement benefits and wider Group synergies. Our reduced forecasts incorporate increased operational costs associated with this investment and additional overhead from recent acquisitions. We also take a more cautious tone within Flowtech’s OEM-based businesses, including uncertainty on timing over a £1.5m order. Nevertheless, Flowtech continues to trade at a discount to peers on a PER of 11.5x in FY2018E, falling to 10.6x in FY2019E.

Companies: Flowtech Fluidpower

18 Sep 18

Cenkos: Bango Plc - Interim results

This morning, Bango announced interim results for the period to 30 June 2018, showing a strong increase in End User Spend (EUS), up 138% to £220m. EUS growth remains on track to more than double for the fourth consecutive year. Audiens has added a completely new and high margin, revenue stream during the period and there remains a growing pipeline of new MNO/App Store integrations to complete as well as further Google Play upgrades, together representing well over US$4 billion in EUS. Further expansion of the Bango platform has also enabled MNO customers to sign-up for Amazon Prime Video in the US, UK and India, and Pandora customers in the US; generating new subscription-based revenues for Bango.

Companies: Bango

17 Sep 18

LIBERUM: Sirius Minerals* - 2.5mtpa binding offtake and vertical integration in Brazil

Sirius have announced a binding offtake agreement at a peak volume rate of 2.5mt of POLY4 with Cibra, Brazil’s 6th largest distributor. In conjunction Sirius will purchase a 30% stake in Cibra, via an equity swap and the issuance of 95m Sirius shares.

Companies: Sirius Minerals

18 Sep 18

Focusrite - Second-half trading as expected with higher cash

Focusrite ends the year with revenue as forecast, continued profit growth in the second half and revenue in line with our expected slower second-half growth. Cash of £22.8m is 10% higher than we forecast and is now over half the balance sheet. US tariffs will likely apply to Focusrite’s business there and management has been considering its response, while risks associated to Brexit appear relatively minor to us. It seems the share price continues to discount a significant acquisition.

Companies: Focusrite

18 Sep 18

All on track for ramp-up in H2’18

CloudCall’s performance in H1’18 was robust, as per the pre-release, with management confirming its H2’18 outlook and target to break-even during FY19E. Our estimates are unchanged. On strategy, the Phase II roll-out of UCS is due to go live in Q4’18, positioning the group to accelerate into FY’19E. We reiterate our Buy rating and continue to see compelling upside.

Companies: Cloudcall Group

19 Sep 18

Cenkos: RA International Group Plc - Interim results

RA International has announced interim results for the period to 30 June 2018. The strategy of pursuing larger and longer duration contracts has started to deliver, with RA successfully winning a 5-year contract with UNICEF and a further 5-year US$30m contract with the UN in Somalia in August. The bid pipeline has increased significantly since the June flotation and, in total, contracts worth US$63m have been won in 2018. Accordingly, management expects a stronger H2/18. Trading at a 2018E PER of 11.4x and EV/EBITDA of 8.9x, falling to 10.7 and 6.8x 2019E respectively, we believe RA offers significant upside potential from the current level. RA also provides a prospective yield of 0.5% with dividend payments commencing in the current year.

Companies: RA International

11 Sep 18

Cenkos: Seeing Machines Ltd - Backup-driver Monitoring System

Seeing Machines has announced that it has launched a retrofit driver monitoring system for autonomous vehicles called the Guardian Backup-driver Monitoring System (Guardian BdMS). The system is designed to ensure that the backup-driver in a self-driving research vehicle is alert, aware and ready to take control of the driving task whenever necessary. The product is in response to clear demand from producers of semi-autonomous and autonomous research vehicles and Seeing Machines has signed an agreement with one customer and is in advanced discussions with several leading companies in the space. The Guardian BdMS product is based on a repurposed Guardian (fleet) Gen-2 unit but using updated FOVIO algorithms and an interface and API designed for this application.

Companies: Seeing Machines

12 Sep 18

Share & share alike

Here we go again – the company reporting season is gathering pace. The MPC is likely to leave rates unchanged although expectations still remain for an increase next year. The UK economy expanded at a faster pace in July helped by the weather and better retail sales. General sentiment continues to be impacted by tariff concerns, combined with Brexit uncertainty. As Table 1 shows, all major indices have fallen over the last month. In Share News & Views, we comment on AorTech*, Bonhill*, DeepMatter*, EU Supply* James Fisher, Haynes, Hunting , Location Sciences*, Marshall Motor and Synectics*.

Companies: AOR APC BMS CRPR DMTR ESC EUSP FDM FA/ GETB LSAI PCF SNX TCN W7L

18 Sep 18

Cenkos: Smart Metering Systems Plc - Interim results

SMS has reported interim results for the period to June 2018 showing a significant increase of 43% in annualised recurring revenue (ARR) to £69.3m. Investment in meter assets, particularly domestic smart meters, increased in the period to a record £78.3m, up 60% (H1/17: £48.9m) and growing the portfolio of assets managed to 2.5m, up 24% since FY17 and 50% since H1/17. The core strategy of SMS remains to build its meter asset portfolio on which it earns long term, index linked ARR. ARR had reached £71.4m by 31 August 2018, 95.2% of our current FY18 forecast of £75m. The recent weakness in the share price has created an opportunity, that in our view, investors should not miss out on and we strongly recommend buying the share.

Companies: Smart Metering Systems

18 Sep 18

Cenkos: Redde Plc - Forecast upgrade

Redde's strategy of continuous operating improvement, enabled by integrated technology and a strong customer service ethos, remains a sustainable competitive advantage. Low debt adds to competitive flexibility. We have raised our EPS forecasts by 10%+. Offering a 6.4% prospective dividend yield (with 8% DPS growth pa), we reiterate our Buy.

Companies: Redde

22 Sep 18

A small loss-making activity is sold

ElringKlinger has decided to sell new enerday GmbH, in which it acquired a 75% stake in 2014 and in which it controlled 80% earlier this year. This activity concentrates on the development of high-temperature fuel cells for stationary applications. ElringKlinger intends to concentrate on the development of low-temperature fuel cells for mobile applications.

Companies: ElringKlinger

21 Sep 18

The GC integration to yield first synergies soon

The company reported its first half 2018 results which included General Cable from 1 June. The numbers were overall impacted by one-offs (FX negative impact and Western Link provisions) and the change in perimeter, but the business managed to deliver a reasonable adjusted EBITDA, helped by strong momentum in the Telecoms division. The integration looks well on track and the company is confident in its ability to deliver synergies. The negative was in the HV submarine segment which is likely to experience phasing issues in the coming months.

Companies: Prysmian

21 Sep 18

PureCircle - StarLeaf to drive growth

PureCircle’s FY18 results demonstrate the business is recovering well from the problems in North America. Transition to the superior StarLeaf stevia product is proceeding well and should continue to be accretive to margins. The innovation pipeline remains strong and the company is well positioned to continue to capitalise on the shift away from sugar and towards natural sweeteners.

Companies: PureCircle

21 Sep 18

Mologen - Global lefitolimod partnership close to completion

Mologen announced that it has signed term sheets for a global partnership with Oncologie for its lead asset, lefitolimod. The deal is expected to complete in Q119, and in the near term Mologen expects to receive €23m from the agreement in a combination of R&D funding, cash payment and bond issues. Sensitivity remains around Oncologie who are an early stage biotech with $16m in seed funding. Mologen announced a capital raise in which it could receive gross proceeds of €18m. Focus remains on data from the Phase III IMPALA trial in metastatic colorectal cancer (mCRC), expected in 2020. We value Mologen at €188m (€16.6/share).

Companies: Mologen

21 Sep 18

Beowulf Mining - Corporate Video, Kallak Iron Ore Project

21 Sep 18

Accsys Technologies - Accoya volume rising, more capacity on stream

AGM comments point to operational progress at Arnhem and an on-track construction schedule for the new Tricoya facility at Hull. Accsys has set out a clear development plan for the group; while we are not placing undue weight on a short trading period, we are encouraged to see that growing revenues and production volumes have been achieved in the year to date.

Companies: Accsys Technologies

21 Sep 18

Cenkos: Tasty Plc - Efficient Capital Allocation

Tasty plc has announced its interim results for H1/18A. Revenue declined 5.7% YoY to £23.0m. The company continues to focus on its performing estate, whilst adapting its strategy in the face of unfavourable trading conditions. Management is maintaining focus on keeping its food offering relevant and reducing its cost base, whilst pushing forward with initiatives to fully understand its customer and strategic marketing opportunities. Given the uncertain outlook and lack of formal guidance we maintain our Hold recommendation.

Companies: Tasty

21 Sep 18

Morning Note – 21 September 2018

Companies: Savannah Resources

21 Sep 18

(Almost) Daily Market News Update

A sunny August helped UK retail sales surpass expectations and grow at a moderate 0.3% compared to an expected decline of 0.2%. On top of that, July retail sales growth was revised upwards to 0.9%, indicating that the hot summer months helped spur consumption.

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21 Sep 18

Morning Song

Bagir Group (BAGR LN) Interim results | M&C Saatchi (SAA LN) H1 outperformance provides a huge buffer against uncertainty | Summit Therapeutics (SUMM LN) H1’s highlight antibiotics programmes on track

Companies: BAGR SAA SUMM

21 Sep 18

Small Cap Breakfast

Green Man Gaming—pure play e-commerce and technology company in the digital video games industry. revenue CAGR growth of 26.7% in the last three years to £47.5m. Due 28 Sep. EBITDA Profitable. Offer TBA Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over the next few months. Kropz PLC-Intention to float by the emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa

Companies: BMTO MERC XSG WSG SAG GFIN CARR MOSB TUNG

21 Sep 18

Northland Capital Partners Limited Morning Report

SAVANNAH RESOURCES (SAV.L) | CLONTARF ENERGY (CLON.L)

Companies: Savannah Resources Clontarf Energy

21 Sep 18

Judges Scientific - 2018 Interim Results

Judges Scientific reported results for the first half of 2018. The period included a first-time contribution from Oxford Cryosystems, which was acquired in July 2017. Organic growth of order intake and sales was solid and well in line with the full year target.

Companies: Judges Scientific