Most popular equity research this week | 12-16 June

iomart (IOM) 

In-line FY results, but some disappointment in consulting area | N+1 Singer, 13 June

Gold Access

"iomart FY results are in line with expectations with Cloud Services and Easyspace delivering 10% and 4% organic growth, respectively, adjusted PBT margins being maintained at 25%, strong cash generation and a proposed 90% increase to the final dividend to 6.0p. Within Cloud Services though, the group did flag a disappointing performance from SystemsUp, the consulting business, which has a higher proportion of non-recurring revenues. As such, we expect market estimates to reflect lower growth in Cloud Services going forward (to c.7-8% vs. 9-10% previously) but the impact on overall profits will be offset by the €7.9m acquisition of Dediserve announced today leaving EPS estimates only marginally changed. iomart has a resilient business model – with very high levels of recurring revenue, profit margins and strong cash generation – allowing it to withstand some disappointments along the way. The shares are on Mar’18 EV/EBITDA of 9.3x and a P/E of 18.1x."

Purplebricks (PURP)

Targeting California | Zeus Capital, 14 June

Gold Access

"On June 14 to 17, Purplebricks management will attend the 51st Annual NAREE Real Estate Journalism Conference in Denver. At this conference, it will announce the commencement of its United States expansion. Today’s RNS observes: California will be Purplebricks’ first launch state; California Association of REALTORS data estimates total sales commissions exceeding US$11.5 billion; In preparation for its US launch, Purplebricks will soon begin engaging hundreds of highly experienced, full time real estate agents across California..." 

Britvic (BVIC) 

Fizz confined to the drinks in FY2017 | Whitman Howard, 12 June

Gold Access

"Despite its increasing strength and demonstrable growth overseas Britvic (BVIC LN, BUY, T/P 800p) remains on course for a flat year overall at EBITA level. However, the company’s brand strength should mitigate some of the current input cost pressures while its strong Q4 2016 revenue was always going to be challenging to lap. The underlying business quality, in our view, remains strong..."

Majestic Wine (MJW) 

Exceeding expectations | Liberum, 15 June

Gold Access

"Half way through the transformation project, the company is executing their strategy through a more disciplined use of cash which should drive better returns. This should allay concerns that growth is the only consideration and we feel we may be entering into a period of improved earnings visibility despite the backdrop..." 

Carclo (CAR) 

High growth healthcare/engineering stock trading >30% below SOTP valuation | Equity Dev, 15 June

Free Access

"You don’t have to be a ‘Silicon Valley’ tech startup to deliver double-digit top line growth. Carclo – an innovative designer and manufacturer (70% non-UK sales) of complex plastic parts, cables and premium LEDs (see below) to the healthcare and engineering sectors - has been doing exactly this for years..."

WANdisco (WAND) 

$2m deal with major US retailer | Edison, 14 June

Free Access

"WANdisco has announced a new contract valued at c $2m with a major US multinational retailer. The company’s last three announced big data deals span automotive manufacture, financial services and now retail, highlighting the broad applicability of the company’s technology. With $6.1m of big data deals announced thus far this year, we believe there is a strong prospect of upgrades but leave our estimates unchanged for now pending a fuller trading update..." 

Thin Film Electronics (THIN) 

Tapping the booming medical marijuana market | Edison, 12 June

Free Access

"Thin Film Electronics (Thinfilm) has announced an agreement with California’s leading medical marijuana supplier, Caliva, to incorporate Thinfilm NFC solutions into its packaging. Caliva sells a wide range of products including 21 different strains of cannabis with different potencies and cultivation practices, as well as a range of over 130 cannabis-containing foods and ancillary equipment. Caliva is looking to enhance the shopper experience and provide more consistency, transparency and accessibility towards the cannabis space, as well as boosting marketing via offers and events. In 2016, California became the fifth US state to legalise recreational use of marijuana. Public sales of cannabis from stores are expected to start in 2018, which should lead to a further substantial increase in Caliva’s sales..."

Hummingbird Resources (HUM) 

Increases Yanfolila interest to 80% ahead of production | Beaufort, 13 June

Free Access

"Hummingbird Resources, the West African focused gold development and exploration company, has increased its ownership of the Yanfolila project in Mali. The Group has agreed to exercise its option with minority owner La Petite Mine d’Or (LPMDO), to acquire an additional 5% interest and 1% royalty for total consideration of US$2m to be paid in shares on 31 March 2018. As such, Hummingbird will own 80% interest in the project (previously 75%) whist the royalty will be reduced to 3%. The Company also owns 90% of the 4.2Moz Dugbe gold project in Liberia..."