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11 Nov 19

LIBERUM: AFH Financial Group* - Organically growing and improved FCF

AFH continues to grow at an impressive rate compared to peers in a tough market environment. It has delivered 8% organic net flows and new business written is up 46% yoy.

Companies: AFH Financial Group

14 Nov 19

Evolving investment case - the next phase

While the FY20 interims are in-line, this does not tell the whole story with the investment case for Volex evolving away from the recovery mode of the last few years to a growth business which now focuses on cash generative, higher margin customers in new markets. The business is substantially de-risked with the top three customers now accounting for 25% of revenues – down from 47% in FY15 and when combined with a re-iteration of our PBT growth forecast of 47% for FY20, an upgrade to our expected net cash estimate from US$17m to US$23m at March 2020, a restored dividend and with it trading on a FY20 PE rating of just 10x, we re-iterate our buy recommendation with a price target of 160p.

Companies: Volex

11 Nov 19

LIBERUM: Sirius Minerals* - Cost savings at the crux of the new plan

Sirius’ announcement this morning has confirmed it will split the financing of the shafts and the remainder of the project, with the $600m shaft component targeted before April. We outlined the rationale for this strategy in September and ran through some of the maths, but today’s release implies scope for less dilution than expected, if it can be executed.

Companies: Sirius Minerals

14 Nov 19

Strong interim results

Volex has announced results for the 26 weeks to 29th September 2019 that reflect management’s focus on operational efficiency, cost control and margin analysis to drive business at acceptable margins. Adjusted PBT and EPS(FD) rose 69.3% and 48.3% respectively with benefit captured from targeted acquisitions. The Group has also returned to the dividend list with the payment of a 1p interim dividend, the first since 2013. On a calendarised basis the shares currently trade at a 34% PER and 36% EV/EBITDA discount to a comparable peer group for 2020. The Board has reiterated its confidence in delivering its full year expectations and in its ability to drive shareholder value.

Companies: Volex

14 Nov 19

Prelims: consistency and opportunity

EBITDA of £10.5m (£10.4mE) was delivered from revenue of £49.2m (£46.7mE) with net cash of £24.1m, (as revealed in August), comfortably ahead of our £21.5m year-end forecast. Newsflow in the period included three acquisitions, the securing of a five year framework agreement for deployment of TRACS Enterprise with a major Train Operating Group, and the successful transition of the CEO role to Chris Barnes. The Group continues to deliver the proven mix of self-funded acquisitions and organic growth, demonstrating comfortable delivery of forecasts reiterated at interims, and a very strong balance sheet giving capacity to deliver much more of the same. With the new CEO able to deliver operational efficiencies to a Group already well versed in delivering successful acquisitions, we look forward to the next part of Tracsis journey. Target 775p reiterated.

Companies: Tracsis

12 Nov 19

Cenkos: Seeing Machines Ltd -- EC safety regulations for DMS adopted

The European Council announced on Friday 8 November that it has adopted a regulation on the general safety of motor vehicles and the protection of vehicle occupants and vulnerable road users. This follows an agreement with the European Parliament in March 2019 and is part of the "Europe on the Move" package, launched by the European Commission in May 2018. These new regulations are to help transition towards a mobility system which is safe, clean and automated. Of relevance to Seeing Machines is the Regulation for the adoption of safety features that include advanced driver distraction warning systems and driver drowsiness and attention warning systems. These regulations will apply from May-2022 to all cars, vans, trucks and buses (including SUVs) and amend several existing safety regulations for EU-type approval.

Companies: Seeing Machines

13 Nov 19

Capital Markets Event

We attended the Frontier Development capital markets day for institutional investors and analysts at the group’s offices in Cambridge yesterday. Whilst there was no new material information provided at the event, various senior managers provided valuable insight into the high-level detail of planning and execution which goes into making a game. The current managerial set-up and capacity the group has in Cambridge, validates the recent move into third-party publishing which we highly favour.

Companies: Frontier Developments

15 Nov 19

FY’19 organic Media sales up 31% y/y

Future Plc’s FY results revealed the better than consensus growth noted in the trading update last week. Underlying group revenues grew 11% y/y, and 70% on a reported basis to reach £221.5m (FY’18: £130.1m), with organic Media revenue growth of 31% (reported: 134%) to £154.9m (FY’18: £66.3m). EBTIDA margins were 24.6% (FY’18: 15.9%) supported by increased scale and improving product mix. Regionally, US sales grew an organic 40% y/y with US ARPU still at a 38% discount to the UK (FY’18: 48%). EPS growth rose 95% y/y to 47.5p/share, whilst FCF rose >200% to £53.7m. Alongside FY results, management have announced the acquisition of Barcroft Studios (‘Barcroft’), a small independent studio that creates original video content for distribution across owned and operated social sites as well as mass media channels. Total consideration is £23.5m (9.4x LTM EBITDA), of which 40% will be satisfied in shares. Finally, management have also noted that, after a strong Q1, the Group now expects to be materially ahead of full year expectations. As joint broker to Future, we are restricted and can therefore provide factual comment only up to the conclusion of the General Meeting.

Companies: Future

15 Nov 19

LIBERUM: Frontier Developments* - Trading update, future games, CMD

Frontier has provided a trading update which highlights that the strong sales of recent launch Planet Zoo underpins FY20 forecasts and in the same statement provides a number of positive updates on existing and future games. The main takeaways for us are the strategically important expansion of Planet Coaster onto console (FY21), the confirmation of a major paid-for release for Elite Dangerous (FY21), and news of two major releases coming in FY22 including the licensed IP launch in FY22 which will be multi-platform. The update drives changes in some of our game release assumptions but we leave headline revenue and profit forecasts unchanged. We retain our Target Price of £18 and our view that Frontier is a core holding in a UK SMID fund.

Companies: Frontier Developments

15 Nov 19

DCB for YouTube in the USA

Bango has announced the launch of Direct Carrier Billing (“DCB”) payment services for Google’s YouTube TV Service, with the initial launch via a “leading” but unnamed US Mobile Network Operator (“MNO”). With the ongoing growth in US Over The Top (“OTT) video services continuing to cannibalise the Cable TV operators, we believe DCB for YouTube TV is a strong offering in a large market. The release is light on detail as to the potential value to Bango, and we make no revisions to forecasts. Nevertheless, the launch represents a further win in an area of strategic focus for the group. It also confirms the integration of a major new merchant service into the Bango Platform.

Companies: Bango

13 Nov 19

Full year results, first look

Avon Rubber has announced FY results comfortably ahead of consensus with the Group describing a transformational year in 2019 which sets it up well for the medium term. We see the Group as well positioned given its end markets and product development which should be attractive for investors but the recent stock run-up has been strong and valuation appears full. Neutral.

Companies: Avon Rubber

26 Mar 19

Cenkos: XLMedia Plc - High FCF yield

2019E should see the beginning of a recovery phase. Development effort into existing assets and diversification away from gambling should help reduce the volatility seen of late. The free cash flow yield is pricing in no recovery whatsoever.

Companies: XLMedia

18 Jul 19

FY results; acquisitions to fully benefit FY 2020

Full-year results to 30 April 2019 were in line at the revenue line but 5% (£0.1m) better than expected at the adjusted pre-tax profit level. Underpinned by c.5.5% organic growth, the 20% and 26% increases in revenue and adjusted EBITDA were driven by full-year contributions from ATC and QSI, acquired in FY 2018, as well as five acquisitions in FY 2019. Notable was the 35% increase in free cashflow. Additional investments into Sentek, Atik, Graticules and Astles and the integration of ATC with Thermal Exchange in FY 2020 should benefit the businesses in FY 2021. We upgrade our FY 2020 adjusted EPS by 7% as well as introduce FY 2021 forecasts, which indicate 13% EPS growth. The company indicates that it expects to add at least one new business in FY 2020, which will be incremental to these forecasts. We are raising our target price by 9% to 60p, reflecting the improved gross margins and stronger underlying cashflow.

Companies: Scientific Digital Imaging

08 Nov 19

Games Workshop Group - Strong five-month trading update

Games Workshop (GAW) has published a trading statement for the first five months of FY20, highlighting an acceleration in revenue growth to c 12% (versus our previous forecast for the year of c 4%), strong margin growth and encouraging signs with respect to its ability to leverage its intellectual property through royalty income. Our PBT estimates increase by c 9% for FY20 and FY21, and our DCF-based valuation increases by 10% to 5,176p.

Companies: Games Workshop Group

11 Nov 19

Weak China trading in H1 weighs on FY outlook

Today’s trading update highlight that the ASF outbreak in China continues to weigh on performance, exacerbated by the US-China trade dispute. If these trends continue, FY results could fall significantly below market expectations. Although there are early shoots of market recovery, our revised forecasts conservatively imply that current trading conditions will remain through the remainder of this financial year, resulting in FY2020-22e gross revenue forecast reductions of 20%, 18% and 14%, respectively; and underlying EBITDA downgrades of 39%, 32% and 28%, respectively. Our EBITDA estimates have been reduced by a further £3m pa to reflect an anticipated change in R&D capitalisation, one of several areas under consideration as the company transitions to best accounting practice. We stress that several regions outperformed expectations in H1, and we remain confident that the Group is poised to benefit when the ASF outbreak is ultimately contained and trading conditions in China improve.

Companies: Eco Animal Health Group

15 Nov 19

Q3 19 trading statement: not so bad but a soft Q4 outlook

The Q3 19 top-line growth remains decent However, the tyre business is seen as slowing in Q4 We will downgrade our forecasts for FY19 and going forward

Companies: NV Bekaert

15 Nov 19

9m19: new layer of complexity, right timing for partial divestment of the Chilean concession

The Chilean concessions asset have been partly sold with very good timing but also resulting in a new layer of complexity added to an already complex company. Following these results, we expect to increase our EBITDA, decrease our net profit and increase net debt and capex. Overall, we expect a positive impact on our target price in the vicinity of 5-10%.

Companies: Sacyr

15 Nov 19

Stobart Group PLC reports ' strong strategic and operational first-half performance'

15 Nov 19

Enteq Upstream - Expansion strategy drives strong interim results

Enteq Upstream PLC (LON:NTQ) is a leading technology provider to the global oil & gas directional drilling market. The company designs and produces high-end robust measurement-while-drilling (MWD) systems and associated components. We gave some details on the technologies and demand drivers in

Companies: Enteq Upstream

15 Nov 19

Port operator Agulhas has two huge opportunities in east Africa says CEO Phillips

15 Nov 19

Borussia Dortmund - Exciting viewing ahead

Borussia Dortmund’s Q120 results exhibited typical volatility due to the key summer transfer window. Excluding the volatile transfer revenue, there was good growth with other revenue up c 15%. We maintain our forecasts but note there is a key Champions League game in less than two weeks and results in the Bundesliga must improve to ensure qualification for the competition next season. The shares continue to look well supported by its player assets and the FY20e EV/EBITDA multiple of 5.8x.

Companies: Borussia Dortmund GmbH & Co.KGaA

15 Nov 19

Zaim Credit Systems CEO talks growth potential following London listing

15 Nov 19

Bardoc Gold Limited (ASX:BDC) - Western Australia,

CONSOLIDATION CONTINUES TO DELIVER Since the October 2018 merger with Excelsior Gold, Bardoc Gold Limited (“Bardoc”, or the Company) has continued to make major progress on the 100% owned Bardoc Gold Project (“BGP”), located north of Kalgoorlie in Western Australia. The current Project area, located within the highly prolific Eastern Goldfields of the Yilgarn Craton (one of the world’s premier mining districts), is the result of the ground consolidation undertaken since 2017, with the Company now working towards a Pre-Feasibility Study (“PFS”), targeting a standalone operation with a central mill - this is due for completion in Q4, 2019. A key component is the recently updated Mineral Resource Estimate (“MRE”) which has incorporated the results of ~40,000 m of post merger infill and extensional drilling that has continued to provide strong results from the various deposits. The upgraded MRE of 49.4 Mt @ 1.9 g/t for 3.02 Moz (with 60% in the Measured and Indicated categories) represents a 17% increase on contained ounces from the November 2018 MRE, itself an increase of 23% on the combined Resources of the pre-merger projects. The large, robust Resource base is key to underpinning Bardoc’s plans of developing a standalone gold mining and processing operation - although there are a number of mills that could provide toll treatment in the region, such arrangements tend to favour the mill owner rather than the miner. The three cornerstone deposits, Aphrodite (1.68 Moz), Zoroastrian (0.515 Moz) and Excelsior (0.320 Moz), which all have increased Resources, are located 30 km apart within the Bardoc Tectonic Zone (“BTZ”), and within 100 km of and to the north of Kalgoorlie in Western Australia - the Company is looking at both open cut and underground operations at these deposits which will form the backbone of planned operations. The Project also includes a number of satellite deposits, particularly around Zoroastrian, in what was termed the Kalgoorlie North Gold Project (“KNGP”) by Excelsior, and centred over the historic Bardoc Mining Centre - one recently acquired tenement hosts the Slug Hill deposit, which was reportedly, at 23.5 g/t, the highest grade producer in the field. We will refer to this area as Kalgoorlie North to differentiate it from other areas, although this is not a name used by the Company. Also in the mix is Bardoc’s 79 koz open pit Mulwarrie deposit, located some 65 km west of Aphrodite near the Davyhurst Mining Field. Most recently the Company has acquired the Mayday North and North Kanowna Star prospects - these are located to the east of the main BGP area, which added 111,600 oz of JORC compliant Resources to the BGP. Ongoing activities will provide good newsflow over coming months in a time of high appetite for gold stocks and historically high Australian denominated gold prices, and should result in value appreciation. News will include progress on the PFS, and in addition ongoing drilling, particularly in regional exploration and evaluation of satellite deposits, should continue to deliver results. KEY POINTS Successful consolidation: The mergers and acquisitions have consolidated the highly prospective BTZ, resulting in a large mineral inventory that should be sufficient to support a long term, robust standalone operation. Cashed up: Having just raised A$15.2 million through a placement and oversubscribed SPP at A$0.10/share, the Company is well cashed up to fund ongoing activities. High quality Resources with upside: The Resources of the individual deposits appear to be of a quality to support the planned mining styles, be it open cut or underground; in addition a number of these are open along strike and/or down dip hence there is the potential for Resource expansion. Ready access to infrastructure: The Western Australian projects have ready access to power and transport infrastructure, and a resident workforce and services in Kalgoorlie. Stable, well respected mining jurisdiction: Western Australia is a well regarded mining destination, ranking 1st in Australia and 2nd globally in the 2018 Fraser Institute Survey of Mining Companies. Positive outlook for gold: Our view, given global economic conditions and geopolitical factors is that the Australian denominated gold price will remain at around current historically high levels or higher for the foreseeable future. Strong management and technical team: The Company has management and technical personnel with extensive experience in the junior resources sector, and a proven history of technical success and delivering value to shareholders; in addition key personnel currently hold ~11% of the Company, thus aligning their interests with those of other shareholders.

15 Nov 19

Enteq Upstream PLC's international strategy 'delivering real results'

15 Nov 19

Gfinity PLC's head of partnerships on why big well-known brands are entering Esports

15 Nov 19

Cost management, capex discipline

The performance in Q3 19 was not surprising following the upwards revision of 2019 EBITDA guidance and the pre-announcement of Q3 19 numbers some weeks ago. Despite lower revenue (-0.9%), the EBITDA margin improved significantly (+2.2pts to 16.5% of revenue) thanks to all divisions. Ocean and Terminals & Towage were the best performers. 2019 EBITDA guidance is confirmed at $5.4-5.8bn. AP Moller-Maersk remains focused on cost and capex discipline.

Companies: AP Moeller Maersk

15 Nov 19

LIBERUM: PureTech Health - resTORbio failure trims NAV but over 30% upside remains

PureTech is a healthcare investment company with a broad portfolio of affiliate companies and a growing internal pipeline. Today one of their investments, a publicly quoted biotech called resTORbio, announced the failure of its phase III drug and the shares have fallen substantially.

Companies: Puretech Health

15 Nov 19

Again, healthy quarterly results

Even though the market conditions remain challenging, Mayr-Melnhof Karton achieved strong Q3 19 results. Varying improvements materialised in both divisions. While we don’t expect the market headwinds to retreat anytime soon, the group should remain a beneficiary of the still high untapped potential of (European) packaging markets.

Companies: Mayr-Melnhof Karton