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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

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

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.

05 Aug 20

First UK order for Primestore MTM device

EKF has secured its first order in the UK for the Primestore MTM sample collection device, worth £3m over the next 7 weeks. The purchaser is a partner from the private sector, with the device being used in a Covid-19 testing programme for UK staff. With these increasing orders, EKF has expanded its production line in Cardiff and now has capacity for 25,000 sample collection tubes per day. In addition, the production line in Germany is now up and running. We increase our FY20 revenue estimates by a further £3m and EBITDA by £2m. Given the nature of the device, which is agnostic over which molecular test is used, we expect demand to continue at elevated levels for the duration of the pandemic and continue to see further upside potential to our already materially upgraded estimates. EKF remains one of our best Ideas for 2020.

Companies: EKF Diagnostics Holdings Plc

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

05 Aug 20

Low interest rates wipe out operating resilience

L&G reported an operating profit from continuing divisions (excluding Mature Savings and General Insurance businesses) of £1,128m, -2.2% yoy. The COVID-19-related cost was £129m. LGR posted a growing operating profit to £721m. Net profit amounted to £290m vs. £874m a year before, being affected by the reduced discount rate used to calculate LGI reserves. The Solvency II ratio stood at 173%. The Board recommended an interim dividend of 4.93p/share, stable relative to H1 19.

Companies: Legal

06 Aug 20

Cenkos: Duke Royalty Ltd -- Restoring the royalties

Trading in the royalty partner portfolio over Q1/21 shows a material rebound from May, which has been sustained to date, as the portfolio as a whole returns to more normalised trading. Consequently, Duke's cash receipts, while down 20% YoY currently, are set to step up in H2/21 as forbearance measures largely expire and deferred royalties realised. This bodes well for a rebound in earnings and a return to cash paid dividends. A share price down over 55% since Feb 20, standing at p/book of 0.56x H1/20A's NAV p/s thus appears overdone. We await further clarity on the portfolio before reissuing forecasts, thus leave our recommendation U/R.

Companies: Duke Royalty

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

06 Aug 20

Hurricane Energy - Technical review and operational update

Technical review and operational update

Companies: Hurricane Energy 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

06 Aug 20

Teams spirit

LoopUp recently unveiled a major extension to its ambitions – the group is aiming to become a leading global provider of telephony “inside” Microsoft’s Teams product. The opportunity is clear and growing, as enterprise customers look to use Teams for “normal” external phone calls, and LoopUp seems well placed to deliver a differentiated offering using its existing infrastructure and knowhow. In this document we provide an overview of the new platform and explain its strategic significance.

Companies: LoopUp Group 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 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

06 Aug 20

SP Angel Healthcare Conditions

Intelligent Ultrasound (MED.L): Half-year results for 2020 | IQ-AI (IQAI.L): LOI signed with an international medical group for StoneChecker Software Ltd (from yesterday)

Companies: Intelligent Ultrasound Group Plc IQ AI Ltd.

06 Aug 20

SP Angel . Morning View

Altus Strategies* (ALS LN) – High grade gold mineralisation intersected at Tabakorole | Anglo Asian Mining* (AAZ LN) BUY Target 209p – H1 exploration update | Chaarat Gold* (CGH LN) BUY Target raised to 58p (from 51p) – Earnings update | Glencore (GLEN LN) – Record marketing performance shores up H1 results despite Covid19 pressures | Jubilee Metals Group (JLP LN) – Additional copper tailings in Zambia | Kavango Resources (KSZ LN) – Petrology report confirms further similarities between the Kahalari Sutre Zone and the Norilsk nickel system in Russia | Vast Resources* (VAST LN) – Drilling at Baita Plai returns high grade results

Companies: ALS AAZ CGH GLEN JLP KAV VAST

06 Aug 20

Oil & Gas Daily Flow

Hurricane Energy (HUR LN): Material resource downgrade expected at Lancaster | Genel Energy (GENL LN): 1H20 results underline Genel’s financial flexibility

Companies: Hurricane Energy Plc Genel Energy Plc

06 Aug 20

Salt Lake Potash CEO says securing debt and equity package is 'massive last piece of the puzzle'

06 Aug 20

Cenkos: Duke Royalty Ltd -- Restoring the royalties

Companies: Duke Royalty

06 Aug 20

The weak global economic recovery will be very costly

AXA’s underlying earnings stood at €1,885m, -48% yoy. The impact of COVID-19 on profits was in line with the previously published guidance, at €1.5bn. Commercial lines, notably AXA XL, released a loss of €843m. The group’s net income stood at €1,429m, -39% yoy. The Solvency II ratio was 180%. No dividend to distribute in Q4 20 and the two strategic targets, relative to underlying earnings per share and adjusted ROE, were withdrawn. Our model will be refined.

Companies: AXA SA

06 Aug 20

Taking steps to improve the runway

Exchange USD 356m in its ‘23 CB for USD 213m in a Guaranteed CB ‘27 The new Senior Guaranteed CB will be structurally senior to GNs We estimate an available basket of USD ~0.9bn for similar debt The transaction is positive for the company but mixed for the bonds

Companies: Transocean Ltd.

06 Aug 20

In line Q2 results

Crédit Agricole SA (CASA) released this morning its numbers for Q2 20. Numbers are broadly in line with expectations except on the capital side (better than expected). Both total revenues and expenses were in line with expectations. Loan losses were in line with expectations as well, while management did not give any guidance for FY2020. The CET1 ratio at 11.7% was 40bp higher than expected and 30bp higher qoq (12% pro forma state guaranteed loans).

Companies: Crédit Agricole SA

06 Aug 20

Solid set of Q2 20 figures but highest profit of all reinsurers

• Net premiums earned increased by 6% to €12.5bn • Q2 results were hit by COVID-19-related claims which were around €700m • Net profit attributable to shareholders decreased by 42% to €580m for Q2 20 • Prices rose by 2.8% and premium volume increased by 8.3% to €3.8bn at the July renewals • The implementation of the 2020/2021 €1bn share buy-back programme announced on 26 February 2020 is now cancelled

Companies: Münchener Rückversicherungs-Gesellschaft AG

06 Aug 20

Fidelity China Special Situations - AGM Presentation - Dale Nicholls (Portfolio manager)

06 Aug 20

Gold 'has nothing stopping it' as it surges past $2000/oz

06 Aug 20

Catalyst in H1, US may become an inhibitor in H2

Buzzi announced a good set of results with a strong performance registered in the US due to higher demand, supportive pricing, tailwind from input costs and favourable FX. However, management has a conservative outlook for the US for H2, which largely contributes to its EBITDA outlook of -5-10% yoy. Buzzi’s results were better than expected and, hence, we will be updating our numbers upwards.

Companies: Buzzi Unicem SpA

06 Aug 20

The insurer resumes dividends

NN Group released H1 20 operating result of €926m, up 1.3% yoy. The net result declined by 47.5% to €587m, impacted by non-operating items. The COVID-19-related costs were limited to €30m. The Solvency II ratio stood at 221% and the insurer decided to distribute an interim dividend of €2.26/share, which includes the final dividend of 2019, and to continue the share buy-back programme. Achievements were better than expected. Our numbers will be revised up.

Companies: NN Group NV

06 Aug 20

Pan Asia Metals gearing up for drilling at key tungsten project as it nears ASX listing

06 Aug 20

Cenkos: Fulcrum Utility Services Ltd -- Repositioned and focused on green growth

FY20A results are broadly in-line with forecasts set prior to Covid-19, evidencing a far stronger H2A delivery to the year. Fulcrum has now refocused on a number of growth opportunities based on long-term strategic priorities for the UK, including the move to a net zero economy. MoM momentum is building so far in FY21, such that pre-Covid trading levels are expected to be met in Q2/21. Given this, a record order book and strong balance sheet, we see a brighter future for Fulcrum ahead.

Companies: Fulcrum Utility Services Ltd.