Most popular equity research this week | 21-25 Nov

Benefit of tenant fee ban | Purplebricks Plc | PURP

Zeus Capital, 24 November

"Purplebricks’ statement in response to the Chancellor’s Autumn statement, which will ban letting agents charging tenant fees, reveals: The proposed abolition of tenant fees for letting … will have [no] meaningful impact on [Purplebricks’] business; Tenant fees charged by Purplebricks are modest and highly competitive. Upfront fees for tenants are currently £175 (inc VAT) outside London and £209 (inc VAT) in London. Purplebricks does not charge renewal fees; Purplebricks [will] adapt the model swiftly and at minimal cost …. [which should make its customer proposition] even more attractive for landlords seeking excellent service and better value; The proposed changes … represent a significant opportunity to further highlight to landlords the value that Purplebricks is already renowned for offering sellers..."

Gaming Gains | Quixant Plc | QXT

finnCap, 24 November

"Today’s update reveals the Gaming division is showing particularly strong YoY revenue growth and margin performance. In consequence, FY 2016 revenue will be over $86m (compared with our previous forecast of $82.5m) and H2 EBITDA margins will be significantly higher than the 14% seen in H1. We therefore raise both our FY 2016 forecasts and our target price. We retain our FY 2017 forecast as is, ahead of the full-year results in March..."

Cash offer from TVH | Lavendon Group | LVD

Panmure Gordon, 22 November

"TVH, the international parts distributor and equipment rental business, has made an all cash share offer for Lavendon. The 205p offer was initially going to be 200p but it was raised following various conversations with management and certain investors. Lavendon management are not recommending the offer but irrevocable’s have been received from GVQ and Unicorn (combined holding 12.3%). The offer (+47.5% premium to last night's close) values the business on a forward EV/EBITDA of 4.7x, which compares with 4.6x forward multiple over the last three years..."

Solid interim results | Vectura Group | VEC

N+1 Singer, 23 November

"Today’s interims from Vectura are solid, with profitability ahead of expectations and pipeline development in line. The expected newsflow from Vectura over the coming months is significant: Utibron® vs. Anoro® Phase III data is due later this year, to be followed by the expected US launch of Utibron® and FDA approval of VR315/Generic Advair® by 10th May 2017. With two major near-term US launches ahead, we retain our Buy recommendation..."

Steady progress and strong FX tailwinds | First Property Group | FPO

Arden Partners, 23 November

"Overview. First Property’s (Fprop) interims reflect the strong FX translation tailwind from the 12.2% move against the euro, together with contributions from new investments made last year and reductions in funding costs on the Group’s European debt. Reported profits of £4.47m were flat (2015: £4.46m) but with a much smaller contribution from one off items in H1 this year of £0.29m (2015: £1.58m), the underlying picture showed good progress. Adjusted EPS of 2.40p was down 17%, reflecting a higher tax rate due to complex deferred tax provisions related to FX movements..."

Leveraging brands and data | Future | FUTR

Edison, 24 November

"Future is building and widening its revenue streams based on strong global brands and on a scalable delivery platform. Growth of revenues in categories such as eCommerce, events and digital advertising resulted in broadly maintained group FY16 revenues, while the margin has started to build, helped by operating leverage. The Imagine purchase, post year-end, brings further scale and efficiency. The lengthening record of delivery against expectations and the premium projected earnings growth are making the multiple increasingly attractive..."

Strong first-half performance, full year on track | Entertainment One Ltd | ETO

Edison, 22 November

"Strong performances across all Entertainment One’s (eOne’s) divisions underpinned 19% reported revenue growth in H117. With a significant proportion of its slate commissioned or contracted in Television, a good roster of films and strong momentum internationally in Family, the full year is on track to meet management’s expectations. We maintain our forecasts and believe the shares, trading at a considerable discount to peers, do not yet reflect the more balanced structure of the group, or its stronger operational performance..."

Another quarter of delivery | Karolinska Development | KDEV

Equity Development, 14 November

"Karolinska Development's turnaround maintained its momentum in Q316. Portfolio companies, Promimic and Dilafor, raise a total of SEK75m (including commitments) with SEK53m already invested by third-party investors; and Umecrine Cognition has since completed a SEK45m fundraising. On the operation front, BioArctic has formed a collaboration with AbbVie; and after the period end, following the publication of very promising Phase I data in ovarian cancer, Aprea has advanced APR-246 into Phase II. Our valuation of Karolinska, based on its four main assets, is unchanged at SEK9.10 per share..."

Breakfast Today | MYSQ | AERO | HSS | MARS | PETS

Beaufort Securities, 25 November

"With US markets closed yesterday for Thanksgiving and in the absence of significant overnight news, Europe is expected to have a quiet opening this morning with the FTSE-100 seen just 5 points either side of unchanged in early trading. Markets across Asia ended fractionally higher with even the Shanghai Composite moving positive after falling sharply in opening trade, as conflicting views of regarding the potential impact of tariffs on Chinese imports proposed during Trump's electoral campaign and optimistic scenarios that China now finds itself ideally placed pick up the TTP baton that will be dropped on his first day in office, circulated. Elsewhere in the region, the Nikkei set the early pace with the Yen hitting an eight-month high against the US$, along with similar weakness against the basket of other major Asian currencies, boosting competitivity for this export-led economy. Japanese consumer prices fell by 0.4% in October, although this eight-consecutive decline was in line with consensus and smaller than the 0.5% reported for September. Given also that the ECB is now thought likely to not only continue its EUR80bn monthly asset purchase but also to extend the program out to September 2017, the continuing ascent of the US$ ahead of the Italian Referendum and run-up to the French presidential election, now has forex traders are suggesting parity could between the two currencies could be achieved early in the New Year. Oil meanwhile remained subdued ahead of the OPEC meeting scheduled for 30th November, while Gold fell back again on dollar strength and reduced Indian buying. UK macro releases due today include the second GDP estimate, the CBI Quarterly Distributive Trades Survey and the Hometrack UK Cities House Price Index. Just a few, mostly smaller UK corporates are also due to report earnings or provide trading updates this morning, including Fastjet (FJET.L), Triad Group (TRD.L), Pennon (PNN.L) and Zambeef Products (ZAM.L). Traders will also remain sensitive to further reports from the Western allies who have been pressing Iran for several months for a firm commitment to proceed with proposed cuts to its enriched uranium stockpiles, for fear that otherwise these sensitive negotiations could be scuppered upon Trump's move to the White House in January."

Will justice soon be done?... probably | Pathfinder Minerals Plc | PFP

Beaufort Securities, 25 November

"The Pathfinder story started with the 2009 acquisition of the Naburi mineral sands mining lease in Mozambique. It then acquired the neighbouring Moebase exploration licence, an ex-BHP Billiton property which had had $29m spent on it. Together these licences contain upwards of 2Bt of minerals sands resources grading c 3.5%, with patches over 9% i.e. a world class property and opportunity."