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07 Oct 19

UK Housebuilding Sector in 3Q 2019: ‘And then there were 17’

Dame Agatha Christie (née Miller) published more than 80 books and plays; and the Guinness Book of World Records lists her as the best-selling novelist of all time with roughly two billion copies sold. ‘And then there were none’ was originally published in 1939, with an un-politically correct title; and it is still the world’s best-selling mystery (with more than 100 million sold). It is also number six on the list of best-selling books of all-time.

Companies: ABBY CSP WJG TW/ BWY PSN GLV BDEV RDW BKG BVS GFRD CRN GLE SPR

10 Oct 19

Strong earnings support transformation

Morses Club’s result for the six months to 31 August confirmed the group’s strong position to both build on its strength in the Home Collect Credit (HCC) market and ultimately benefit from the changes in customer behaviour by broadening the product range and acquiring further HCC loan books. The results showed strong progress in the digital offering, with close to 14% of HCC customers now signed up for the customer portal launched earlier this year, but also indicated that the level of investment needed to follow the changes in customer behaviour is significant, and will have a near-term negative impact on profitability. The level of investment needed in the industry is, however, also likely to result in more acquisition opportunities as other HCC lenders are unable to make the needed investment. We retain our 190p target price.

Companies: Morses Club

10 Oct 19

IQE - Optimising Asian operations

IQE has acquired the third-party shareholdings in its CSDC joint venture in Singapore for a nominal fee. This gives it control of the operation, which is currently loss making, enabling it to restructure the business and focus it on emerging sales opportunities in Asia for molecular beam epitaxy (MBE)-based products. Short term, the deal has a negative impact on earnings. We reduce our FY19 and FY20 EPS estimates by 8% and 5%, respectively.

Companies: IQE

11 Oct 19

SAP founder/CEO steps down, Boeing partners with Porsche, Ford launches in-car VR

Bill McDermott stood down on Friday after a decade building up SAP as the world's leading enterprise software company, handing the task of completing its transition to cloud computing to new co-CEOs Jennifer Morgan and Christian Klein. SAP announced the management overhaul, with immediate effect, after rushing out third-quarter results that showed it gaining traction in its drive to offer a more streamlined range of services and boost profitability. The company’s stock has climbed 21% this year. It’s up 75% in the past five years, topping rival Oracle, which is up 46%, and the S&P 500′s 54% gain.

Companies: EVRH TRAK CPX CALL ECK IMMO LOOP NET SEE TCM TRCS QTX VRE

14 Oct 19

LP-LDL achieves two major milestones

Last week, OPTI announced two major milestones for marketed ingredient LP-LDL, currently sold as a probiotic in foods and food supplements for the reduction of cholesterol: (1) achievement of process validation under good manufacturing practices ("GMP"), a necessary step in developing LP-LDL as a pharmaceutical drug; (2) confirmation of generally regarded as safe ("GRAS") status by the FDA. Both milestones reflect OPTI's commitment to improving the quality of the science and manufacturing conditions for probiotics to bring them closer to pharmaceutical standards. They should increase LP-LDL's attractiveness to both food companies looking to differentiate their products with evidence-backed ingredients and pharma companies looking to target the microbiome with live bacteria. With both events taking OPTI closer to achieving our forecasts and hence valuation expectations, we reiterate our OUTPERFORM recommendation and target price of GBp97 per share.

Companies: Optibiotix Health

10 Oct 19

XP Power - Q3 order intake encouraging

Despite a tough trading environment in Q3, XP Power saw improving order flow and a book-to-bill ratio of 1.04x for the quarter and management anticipates meeting its FY19 expectations. Helped by currency, our FY19 revenue forecast appears conservative but in the face of volatile trading conditions, we maintain our estimates.

Companies: XP Power

11 Oct 19

Retail ready for a renaissance?

There have been few structural shifts in the property sector as profound as the one currently taking place in retail. Consumer spending patterns have drastically changed over the past five years, with online sales now accounting for 19.7% of all retail spend in the UK (August 2019, source: ONS), compared to 11.5% in August 2014. When you look at fashion retailing specifically, online sales accounted for 26.8% of consumer spend on clothing in 2018 (source: Mintel).

Companies: CAPC CAL HMSO INTU NRR SHB

11 Oct 19

Positive Trading Update

Dart Group has released a positive trading update indicating booking trends have continued to strengthen, boosted by later season bookings, and that the Board believes market expectations for FY20 PBT will be exceeded. There had been indications from other market players that demand had been strengthening in the later season and this announcement suggests Jet2 has been well positioned to capture the upside. Reiterate Buy.

Companies: Dart Group

11 Oct 19

Retail ready for a renaissance?

Companies: CAPC CAL HMSO INTU NRR SHB

09 Oct 19

Positive momentum: another £642m net inflow in Q2

Liontrust has seen another impressive quarter of net inflows, against an uncertain market backdrop of geo-political uncertainty. AuM grew by 4% with the majority of the £642m net inflow coming from the core UK Retail channel. The Neptune acquisition completed postperiod end, taking AuM to £17.4bn. We see upside as the Neptune fund range is marketed to Liontrust’s core clients. In our view, a 12x FY20e PER is undemanding for a resilient growth profile which sets it apart from peers.

Companies: Liontrust Asset Management

08 Oct 19

On the runway to recovery

Air partner is a leading international aviation services business. The Broking division (88% of gross profit) charters airliners for commercial, private and freight customers. The near term market backdrop is challenging but longer term prospects are positive, with passenger numbers set to double by 2037. Strength of relationships in the Broking business and a portfolio approach (no single product or market dominating) places Air Partner well to navigate short term challenges. Geographic diversification (recently opening offices in the US/Asia) offers potential for market share gains, whilst a plan to grow the Consulting & Training division (12% of gross profit) should smooth the earnings profile of the Group. We see significant recovery potential in Air Partner as the refreshed Board executes its strategy.

Companies: Air Partner

10 Oct 19

Cenkos: Falcon Oil & Gas Ltd - Drilling Commences

Yesterday, Falcon Oil & Gas announced the spudding of the Kyalla 117 N2-1 exploration well in the Beetaloo Sub-Basin, Australia. The Kyalla 117 N2-1 well is the first well in the Stage 2 drilling programme to evaluate the potential of the Kyalla shale liquids rich gas play, with Falcon and its partner, Origin Energy looking to build on the 6.6Tcf of gross 2C contingent resource already discovered within the Middle Velkerri B shale dry gas play during 2015/2016. Following the Stage 2 programme, the JV will look to achieve commercial production flow rates in the most prospective play(s) through the drilling and stimulation of two horizontal wells in 2020. With a largely carried work programme and a resource base far in excess of any of its peers we believe Falcon offers investors a low-risk, low cost entry point into an emerging world-class basin. We maintain our BUY recommendation and our 41p price target.

Companies: Falcon Oil & Gas

11 Oct 19

Outperformance at Mobile Nations now expected

Future Plc has today announced the achievement of accelerated earn-out payments related to the acquisition of Mobile Nations in March’19. Deferred consideration of $55m (50% cash/ 50% new shares) becomes payable, with management assuming the achievement of an $11.5m EBITDA contribution from Mobile Nation operations to March’20. Mobile Nations management team will continue to work within Future within the newly created Future Labs, tasked with driving additional organic growth by integrating new initiatives, businesses, tools and processes once they reach a suitable maturity level. Future management continue a strong record quickly bedding down new acquisitions. The modest outperformance in Mobile Nations performance is largely offset by a marginally bigger than expected share base increase. We make no changes to our forecasts however at this time.

Companies: Future

07 Oct 19

LIBERUM: Ramsdens Holdings* - Positive trading update and an exceptional profit

Trading has been in line with the board's expectations, despite what is referred to as a challenging retail environment. The stores recently acquired from The Money Shop are said to be trading well, and acquisitions are still being appraised.

Companies: Ramsdens

09 Oct 19

Diversified Mining Services Contract Win

Capital Drilling (LSE: CAPD) this morning announced the signing of binding agreements to provide a full range of mining services at Allied Gold’s Bonikro Gold Mine in Côte d'Ivoire alongside a US$3 million strategic investment. The new contract win marks a strategic move for the company, including for the first time providing load and haul operations, with control of the mine’s heavy mining fleet alongside five drill and blast rigs. Capital is working with Bonikro management to refine the mine plan following Allied’s recent acquisition, with a view to transitioning the agreement to a five year contract in H1/2020.

Companies: Capital Drilling

15 Oct 19

Sirius Real Estate Limited - Bochum Case Study

14 Oct 19

The Scottish Investment Trust - Executive Interview

<a href="https://www.edisongroup.com/company/the-scottish-investment-trust/2525/"><strong>The Scottish Investment Trust</strong></a> adopts a contrarian approach to investing in companies around the world, seeking to ignore the ‘madness of crowds’ and instead invest in deeply unloved areas of the stock market, where recovery potential has been overlooked by the majority of investors. It aims to reward shareholders with above-average returns over the long term and to achieve dividend growth ahead of UK inflation. In this <a href="https://www.edisongroup.com/edison-tv/fund-manager-interview-alasdair-mckinnon-the-scottish-investment-trust/"><strong>interview,</strong></a> Alasdair McKinnon, manager of The Scottish Investment Trust, explains what being a contrarian investor means in practice and how this is facilitated by being independent of any fund management group. He also highlights some of the out-of-favour areas of the global stock market where he is currently finding attractive investment opportunities.

Companies: Scottish Investment Trust

14 Oct 19

Witan Investment Trust - Buoyant revenue generation

Witan Investment Trust (WTAN) employs a multi-manager strategy providing a ‘one-stop shop’ for exposure to global markets. The trust’s investment director James Hart highlights WTAN’s robust revenue stream, which is underpinned by a portfolio of high-quality companies with long-term growth potential. The trust’s annual dividends have compounded by 8.7% pa over the last 10 years and by an enhanced 10.3% pa over the last five. Hart says that although expectations have moderated, the outlook for growth remains favourable, which is positive for the long-term, patient investor, despite shorter-term periods of stock market volatility.

Companies: Witan Investment Trust

14 Oct 19

Bacanora Lithium CEO hails completion of strategic investment by Ganfeng

14 Oct 19

Flutter-TSG merger: well-intentioned, but not without risks

Flutter group recently announced an all-share merger (pending regulatory approval) with Canada-based The Stars Group, operator of the world’s largest online poker site, PokerStars, creating an online gaming behemoth (over 80% revenue from online operations) with revenue of £3.8bn and earnings of £1.14bn. The share exchange ratio has been fixed as 0.2253 new Flutter shares for every TSG share. While the marriage does have clear advantages, we believe it will also bring along its share of worries/risks.

Companies: Flutter Entertainment

14 Oct 19

Europa Oil & Gas CEO eagerly awaiting news on Inishkea and Wressle

14 Oct 19

LP-LDL achieves two major milestones

Companies: Optibiotix Health

14 Oct 19

Encouraging outlook despite the frustrating results

FY18/19 earnings were negatively impacted by various non-recurring items. Nevertheless, we still believe in the company’s development potential due to its strong business model.

Companies: Bastide Le Confort Medical

14 Oct 19

Interim results in-line – Health acquisition, estimates unchanged

The NFC rating has come under pressure due to a combination of macro concerns and a 1% organic revenue decline just reported for H1 FY2109. The organic decline is largely driven by two of the seventeen portfolio businesses with organic growth elsewhere in the portfolio improving from previous data points. We expect the issues at Beyond to correct through H2 which, combined with healthy organic growth elsewhere in the portfolio and a full contribution from Health Unlimited, leads us to upgrade our FY 2020 expectations. NFC now trades at a PE discount to both the Agency and Small Cap Media peer groups despite a superior growth profile. The balance sheet remains comfortable.

Companies: Next Fifteen Communications Group

14 Oct 19

SP Angel . Morning View

Bacanora Lithium (BCN LN) – Closure of Ganfeng Lithium funding and Board changes | Bluejay Mining* (JAY LN) - BUY - Target price 21.3p – 2019 Disko-Nuussuaq exploration update – new drill ready targets identified | Caledonia Mining (CMCL LN) – Power supply interruptions slow gold production at Blanket mine in Zimbabwe. Shaft sinking completed at new Central Shaft. | KEFI Minerals* (KEFI LN) – The Company congratulates PM Abiy Ahmed on Nobel Peace Prize win | Rambler Metals & Mining* (RMM LN) – Copper production rises at Ming Mine and Nugget Pond in Canada to highest level since 2014 | Sirius Minerals (SXX LN) – Financing remains major question as Sirius signs offtake agreement with Muntajat Group | Vast Resources* (VAST LN) – Heritage Concessions License and Funding Update

Companies: BCN JAY CMCL KEFI RMM SXX VAST

14 Oct 19

SP Angel Healthcare Conditions

Yourgene Health plc (YGEN.L): Half year trading update

Companies: Yourgene Health

14 Oct 19

1Spatial - Encouraging early signs from GI

H120 saw a solid performance from 1Spatial’s core business augmented by a good start from its recent Geomap-Imagis (GI) acquisition. GI generated revenue of £2m and EBITDA of £0.5m in its first three months and additional synergies have been identified. It is early days but in the context of a £5.3m price tag (EV) we see this performance as encouraging. 1Spatial also highlighted significant contract wins post period end. It now looks well set to execute on its next phase: establishing a market leading position in Location Master Data Management (LMDM).

Companies: 1Spatial

14 Oct 19

Accsys Technologies - Solid progress from solid wood

Accoya wood progress in FY20 to date continues to validate the business model and expansion undertaken last year. The new Tricoya project is also progressing albeit with commissioning slipping by some months into H2 calendar 2020. Our existing model accommodates these effects and we have made no changes save for adding FY22 estimates for the first time. For now, on our unchanged estimates, we continue to contend that the current valuation is underpinned by Accoya.

Companies: Accsys Technologies

14 Oct 19

Nina Amin joins Goldex as the platform looks to expand into India

14 Oct 19

H1: volatile crude prices impact results

While the renewables division pursues its development, the volatility in the oil markets has affected the oil & gas activities. H1 sales increased by 3% year on year, with management mentioning a wait-and-see stance from oil & gas operators. H2 looks more positive though, with Dietswell carrying out rig inspection work contracts awarded in H1.

Companies: Dietswell