Most popular equity research this week | 8-12

Featured Report: 

 The New Rhythm of Ad Tech 

This report reviews key current themes in the constantly evolving ad tech sector. We initiate on RhythmOne which we see as a potential winner in this space given its positioning, technology, and financial strength (Buy, 75p Target Price)... read more

High margin growth strategy accelerated
Redstoneconnect (COMS) | Whitman Howard, 10 May

Gold Access

"RedstoneConnect (Redstone) has acquired Anders & Kern for £1.4m and raised further funds to accelerate the development and market penetration of OneSpace. It has raised £6.5m at 1.5p, a 3% discount to the price on 8th May. We are leaving our FY18 PBT unchanged at £2.2m, but have increased our FY19 PBT forecast by 19% to £3.6m. For FY20 we expect a PBT of £4.1m implying a 3yr (2020-2017) CAGR for PBT of 49%. Moreover, we calculate the acquisition creates shareholder..." 

Well set for long term growth
Vertu Motors (VTU) | Zeus Capital, 10 May

Gold Access

"Vertu has reported another record performance for 2017A, with adjusted EPS +7% ahead of our forecast expectations. We are maintaining our cautious FY assumptions from 2018E and beyond. The Group has very strong foundations in place given its growing aftersales and used car operations accounting for over 70% of gross profit, coupled with having the strongest and most flexible balance sheet in the sector. We therefore believe Vertu remains well positioned to deliver strong growth..." 

FY17=transformational year; FY18=laying foundations for much more

Gear4music Holdings (G4M) | Panmure Gordon, 09 May

Gold Access

"FY17’s very strong results are well ahead of our expectations which had been primed to expect just a marginal profit “beat”, as flagged in the FY17 pre-close on March 3. Management commentary highlights that FY18 has started “with good momentum”. Trading updates are unlikely to disappoint and the medium term outlook is increasingly encouraging. The business is well invested for its current 1-2 year growth projections and is now laying down the strategic cost investment..."  

Two years’ success and platform for expansion
Gear4music Holdings (G4M) | Edison, 10 May

Free Access

"Gear4music (G4M) has excited the market with stellar growth since IPO, and has beaten our forecast once again with 272% EPS growth for FY17. Management is focusing on a strategy that could make G4M a significantly larger company, building on the international development of music as a leisure activity. The company is now investing in the infrastructure to make this possible, with two new centres in Europe and a new base in the UK..." 

Continued turnaround in fortunes

Spaceandpeople (SAL) | Equity Development, 12 May

Free Access

"The group has issued a positive trading statement, which covers the first four months of the current year. It suggests that actions taken by management over the past 12-18 months have progressively steadied the ship..." 

Trading update indicates earnings above forecasts
Collagen Solutions (COS) | Hardman & Co, 11 May

Free Access

"Collagen Solutions is a biomaterials company developing and manufacturing medical grade collagen components for use in medical devices, research, and regenerative medicine. A number of investment initiatives have been introduced recently to accelerate the rate of growth, including global commercial infrastructure and development of a pipeline of finished medical devices, the first of which will be ChondroMimetic for repair of small cartilage lesions. The recent trading update..." 

Moving On From A (Very) Hard Year...

BT (BT/A) | Beaufort Securities, 11 May

Free Access

"BT Group PLC (BT) announced its FY-17 results which were in line with stock market expectations but, due to on-going Regulatory and Pricing pressures, its guidance for FY-18 has been lowered. The dividend growth outlook is now only “progressive” (we assume 5% growth) against “at least 10%” previously. BT has had a very difficult year, with 2018 likely to be challenging too but, trading on only 5.0x FY-18 EV/EBITDA, the valuation is not demanding and reflects BT’s “flat” growth outlook. Despite all the challenges, we believe that BT’s valuation and dividend yield of over 5% make the stock attractive. We thus maintain our Buy recommendation with a revised target price of 340p (390p) based on a 5.5x EV/EBITDA multiple..."