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07 Jul 20

Well positioned with excellent growth prospects

Kape’s recent Capital Markets Day (CMD) was an extremely useful update on the many benefits of integrating complementary acquired businesses (including the collaboration between engineering teams) and the opportunities for upselling that new product development brings. Over the last six months, Kape has proceeded with the integration of PIA, expanding the growth of new users through the application of the Group’s user acquisition knowhow and technology. It has also made further enhancements to its product offering which, inter alia, will improve user engagement and retention. This note looks to bring out the main points from the CMD and highlights the significant progress that has been made this year.

Companies: Kape Technologies

07 Jul 20

Cenkos: Seeing Machines Ltd -- USA to mandate DMS from 2024

The ‘Moving Forward Act', the strongest automotive safety bill in decades, has now been passed in the House of Representatives. The bill is focused on advancing safety technologies proven to reduce crash and harm and to make sure strong safety standards are in place to save lives. The bill, which now needs to be passed in the Senate, will mandate automatic braking, lane-keeping, blind-spot detection, event data recorders as well as DMS in all cars and trucks sold in the US from 2024. This aligns with the European General Safety Regulation, which passed into law in November 2019. However, in the EU, the European Association of Automobile Manufacturers (ACEA) has requested a 2‐year delay for the introduction of the 2022 Euro-NCAP protocols due to the projected lengthy time that will be needed to recover from the effects of COVID-19. Euro NCAP has agreed, and a delay is now expected to the 2022 and 2024 rating. The new dates will give automakers and Tier 1 suppliers more time to incorporate the necessary changes given the events of recent months with a number of manufacturers announcing 12 month delays to new models.

Companies: Seeing Machines

13 Jul 20

SP Angel Healthcare Conditions

Novacyt (NCYT.L): Trading update | Avacta (AVCT.L): COVID-19 wastewater detection sensor collaboration with Integumen

Companies: Novacyt Avacta Group

01 Jul 20

THE MONTHLY July 2020

A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.

Companies: AGY ARBB ARIX BUR CMH CLIG DNL HAYD NSF PCA PIN PXC PHP RE/ RECI SCE SHED VTA

09 Jul 20

Dart Group*

FY20 results – All Focus on Resuming Operations

Companies: Dart Group

08 Jul 20

When the tough get going

Successful businesses ‘never let a crisis go to waste’. Indeed since an otherwise strong Q1’20 was interrupted by COVID-19, Mpac has further streamlined operations, accelerated R&D and launched new remote equipment diagnostic/acceptance testing, virtual reality & other ‘Industry 4.0’ services.

Companies: Mpac

08 Jul 20

WHI Equity Research: Jubilee Metals (JLP)

Robust, cash-generative production from mining waste Jubilee operates several chrome-Platinum Group Metal (PGM) operations in South Africa and is constructing a zinc-lead (vanadium) plant at Kabwe in Zambia after already commissioning the copper and cobalt circuits (the ‘Sable' refinery). The company has a growth pipeline identified and significant opportunities to find new projects in Africa (or globally); more specifically, Jubilee announced that it is looking to increase its copper (cobalt) production in Zambia aggressively to make full use of the Sable Refinery. Jubilee also owns the Tjate PGM project in South Africa, which is currently on hold. The company model is to treat its own waste materials and to supplement these with third party ores and wastes where possible. This year has been nothing if not eventful for Jubilee, but further progress and material catalysts are expected over the course of 2020. Jubilee has a high-margin business with cash on hand, and we see plenty of opportunities for Jubilee to capitalise on its robust business model through the global Covid-19 crisis and beyond. We initiate with a fair value of 11.2p/sh

Companies: Jubilee Platinum

10 Jul 20

Solid Uninterrupted Production

Central Asia Metals (CAML LN) announced robust Q2 2020 operating statistics which highlight that there were no COVID-19 related interruptions, in part due to stringent measures put in place by the company. Q2 2020 copper output of 3.4kt was down 6% YoY, up 6% QoQ, however, H1 2020 total production was flat at 6.6kt indicating the company is on track for our 13.4kt 2020F target. Q2 Lead and zinc production of 7.5kt and 6.1kt were up 3% and 5% YoY although both were down 1% QoQ respectively. For H1 2020 12.2kt of zinc and 15.1kt of lead were up 5% and 6% which was primarily due to higher throughput.

Companies: Central Asia Metals

07 Jul 20

Finally, a change of strategy?

With a new CEO, Amanda Blanc, Aviva’s shareholders could dream of a possible change in the group’s strategy, with a more focused insurance business. The new Chief has an opportunity to take painful decisions in a year where no one will require a high operating performance.

Companies: Aviva Plc

08 Jul 20

Hurricane Energy

Operational update

Companies: Hurricane Energy

08 Jul 20

Independent review of UK supply chain

Independent review launched: The Boohoo Group has announced the launch of an immediate independent review of its UK supply chain, intended to identify any areas of risk and non-compliance and to further strengthen the Group’s compliance procedures to ensure similar allegations will not recur in the future. The review is to be led by Alison Levitt QC, a highly experienced advocate who has previously reported on complex issues, including safeguarding enquiries. Boohoo has also announced an initial additional £10m investment in ensuring any supply chain malpractice is eradicated and is accelerating its independent third-party supply chain review with ethical audit and compliance specialists Verismo and Bureau Veritas.

Companies: Boohoo Group Plc

09 Jul 20

RBL interim revenues on track for +36% H1, uncertainty elsewhere

RBG Holdings pre-close trading update to June 30th confirms a strong H1 performance for RBL, the Group’s law firm, with revenues up 36% like-for-like to c.£11.4m YoY. Convex, the CF boutique, understandably has faced COVID headwinds, with most of its H1 pipeline deferred indefinitely, whilst Litigation Finance continues to grow its pipeline and financing commitments on a longer term view. Due to continued uncertainty from COVID we withdraw our forecasts this morning, with a view to reinstating once more clarity on H1 outturn and momentum into H2 is available.

Companies: Rosenblatt Group

09 Jul 20

Exits Native Antigen Company for strong return, heading to evergreen

The Native Antigen Company (“NAC”) has been acquired by LGC for up to £18.0m – with the ongoing COVID pandemic highlighting the value of knowledge and execution in the infectious diseases space. Mercia invested in NAC via both its balance sheet and 3rd party funds. The exit represents a strong return for both sources of capital, validating complete connected capital to optimise value creation. For the balance sheet stake, the £5.2m proceeds represent a £2.5m gain on realisation (c.1.5% of our FY21e NAVps). Final Results will be announced next week, when we will review our forecasts. The shares are currently trading at a 45% discount to NAV (which is 20% cash). Today’s exit demonstrates justification for a much narrower discount, if not a premium, to conservative carrying values.

Companies: Mercia Technologies

07 Jul 20

Open Orphan*

Laboratory Services Contracts Signed

Companies: Open Orphan

06 Jul 20

Macfarlane Group*

Resilient Trading Update

Companies: Macfarlane Group

13 Jul 20

Jubilee Metals CEO welcomes 54% growth in first half operational earnings

13 Jul 20

Belvoir Group CEO talks new strategic alliance with Nottingham Building Society

13 Jul 20

4iG - Acquisition of TRC

As part of its ongoing buy-and-build strategy, 4iG has announced the acquisition of TR Consult (TRC), a specialist IT consultancy focused on the cybersecurity sector. Based in Budapest, TRC addresses a corporate client base in the broader Central Eastern European (CEE) region, as well as in Hungary. TRC was founded in 2007 and is well known to management, having worked with 4iG for the last 10 years. In FY18, TRC had total revenues of c €2m (HUF0.7bn). The purchase price was not disclosed.

13 Jul 20

SP Angel . Morning View

Centamin (CEY LN) – Q2 results confirm 2020 production and cost guidance remains broadly intact | Jubilee Metals Group (JBL LN) – Interims highlight strong PGM earnings growth and maintenance of cash position | Novagold (NG CN) – Novagold suing short-selling firm J Capital Research for defamation (Mining.com) | Panther Metals (PALM LN) – Raising £250,000 | Pensana Metals (PM8 AU) – Drilling from Longonjo – updated mineral resource estimate expected by end of September | Vast Resources* (VAST LN) – Baita Plai development update

Companies: CEY JLP NG PALM VAST

13 Jul 20

Beating consensus - at the adjusted level

Having guided for a weak Q2, Akzo released some preliminary figures, which look a bit stronger than expected, at first sight. But adjusted figures do not reflect reality. In the parallel / adjusted world, the company beat consensus. We await the full Q2 report, which will show the real figures and we would not be surprised if the company reports some weaker than expected profitability (EBIT: Q2 19: €308m: Q2 20 est.: €157m).

Companies: Akzo Nobel

13 Jul 20

FY’19 solid; outlook ‒ broad range of outcomes

Key takeaways from NSF’s results and presentation were: i) solid underlying 2019 with normalised operating profits up 20% and lower impairments to revenue; ii) £60m cash now ‒ April and May cash-generative; and iii) current collections 86% of pre-lockdown levels. NSF is a going concern and is considering an equity raise to help fund additional growth. Downside includes: i) statutory loss with further goodwill impairments; ii) material uncertainty arising from COVID-19 effects and so possibly its going-concern status; and iii) operating performance improvement needed for further securitisation-line drawings (waiver extended on 29 June).

Companies: Non-Standard Finance

13 Jul 20

SP Angel Healthcare Conditions

Novacyt (NCYT.L): Trading update | Avacta (AVCT.L): COVID-19 wastewater detection sensor collaboration with Integumen

Companies: Novacyt Avacta Group

13 Jul 20

Integumen's Gerry Brandon outlines collaboration with Avacta for real-time coronavirus detection

13 Jul 20

Oil & Gas Daily Flow

Eco (Atlantic) Oil & Gas* (ECO LN): FY results, fully funded for upcoming Guyana drilling campaign 2020 | President Energy (PPC LN): Drilling and workover programme takes shape in Argentina

Companies: President Energy Eco Oil & Gas

13 Jul 20

As expected: barcode purchase order

As expected: poLight announced purchase order for the barcode product The barcode customer was announced on March 5th Already included in estimates and has no impact on our investment case Hold rating maintained as poLight remains a binary investment case

Companies: Polight ASA

13 Jul 20

Market Report: FTSE 100 jumps as Asian markets near five-month highs

13 Jul 20

InnovaDerma reports strong cash and 'resilient performance' during pandemic

13 Jul 20

Cenkos: Corero Network Security plc -- 58% growth in orders

Order growth in H1E is running at a sustained high level and the sale of annuity based contracts is creating a material recurring revenue base for the business. This is pushing revenue recognition forward so while the H2E weighting in our unchanged forecasts looks high, a high quality business underpinned by ARR growth is currently being built.

Companies: Corero Network Security

13 Jul 20

Allenby Capital TMT Update - 13.07.20 - GFIN.L, STAR.L, MIRA.L

Gfinity plc* (GFIN.L, 3.6p/£26.7m) | Starcom plc* (STAR.L, 0.95p/£3.3m) | Mirada plc* (MIRA.L, 90.0p/£8.0m)

Companies: GFIN STAR MIRA

13 Jul 20

Media and Games Invest - Benefiting from lockdown, ready for lift-off

Media and Games Invest (MGI) is a games and media business, operating through two divisions, games (free-to-play MMO and casual games) and media (cost-effective user acquisition). The group supplements organic growth (Newzoo: 8.4% growth 2019–22) with a ‘buy, integrate, build and improve’ acquisition strategy. On a pro forma basis, MGI delivered an FY15–19 revenue CAGR of 40% and an adjusted EBITDA CAGR of 43%. MGI’s M&A strategy is focused on the acquisition of assets from distressed businesses at attractive valuations, with growing cash flows expected to rapidly reduce outstanding net debt (€72m at end Q120). MGI has significantly benefited from increased consumer demand as a result of the COVID-19 lockdown. Having recently bought out the gamigo minorities, management sees no slowdown in growth or attractive acquisition opportunities in FY20 or the foreseeable future.