Most popular equity research this week | 24-28 April

In case you missed it:

6 powerful and profitable UK platform stocks

What makes a perfect platform? Size, value, bargaining power, and economic moat... read more

T3 Trend Spotting
Strategy Update | N+1 Singer, 28 April

"In our third edition of Trend spotting we stick with our suggestion at the end of March to up European exposure and we review the recent market moves and macro trends. We comment on the recent strong performance of our growth, quality and momentum styles which we expect to continue and we examine what happened to sectors around the last general election period in 2015, adding some new colour..." 

Strong continuing momentum in BOO and PLT, cautious start for NG
Boohoo.com | (BOO) | N+1 Singer, 26 April

"Today’s figures are clear evidence of both Boohoo’s successful business model and growth strategy, with PBT/EPS doubling in FY17, c2% better than forecast. The balance sheet remains strong with unchanged net cash of £58m despite the acquisition and increased capex spend. Guidance today signals sales/ EBITDA growth in FY18 in line with our current forecasts, with higher Pretty Little Thing growth expected (both sales and EBITDA) offset by more modest Nasty Gal growth. Management has taken a lot on with the opportunistic acquisition of the latter, so we are relieved that guidance is prudent as they manage any execution risk and establish the platform for future growth. A lot of the recent re-rating has been well justified but we wonder if the market was hoping for a sizeable upgrade today..." 

A multi-branded, leading fashion eCommerce business, set for at least 50% growth yet again
Boohoo.com | (BOO) | Zeus Capital, 26 April

"A year of upgrades has been topped by yet another sales and earnings beat. Full year sales of £295m are up 51%, with growth accelerating across all regions in H2. This impressive top line performance converted to a 90% increase in EBITDA to £35.6m and a 97% increase in PBT to £30.9m, driven by overhead efficiencies as the group grows. The complementary acquisitions of PrettyLittleThing and the Nasty Gal brand transform the business into a multi-branded proposition. This, alongside investment in range extension and impressive international expansion, underpins our expectations for continued strong growth of at least 50% top line throughout 2017. Active customers have risen 29% to 5.2m, with solid improvement continuing across all KPIs. Despite the significant capital investment, totalling £30.7m in the year, boohoo’s balance sheet remains robust with net cash of £58.4m at the year end. We upgrade our FY18 expectations by c.12% and continue to see the potential for significant profitable growth going forwards..." 

Recovery not reflected in the share price
Redstoneconnect | (COMS) | Whitman Howard, 25 April

"Prelims for the year to January 2017 are in-line but more importantly they confirm the restructuring process is now complete, prove the commerciality of its cloud based platform and demonstrate a move towards higher margin services. PBT was £1.2m (against a loss last year), adjusted EBITDA grew 56% to £2m and cash from operations turned positive at £0.9m allowing a net cash position to be maintained. For this year, we expect PBT growth of 77% to £2.2m (previously £2.5m), implying a current PE rating of 15x. We reiterate our buy recommendation with a 2.2p price target as the turn around generated by Redstone has yet to be reflected in the share price..." 

Growth and returns
National Grid (NG/) | Edison, 28 April

"National Grid’s high visibility revenues, underwritten by regulatory returns across the UK and US, offer equity holders an attractive combination of asset growth and a 4.3% dividend yield. Both the UK and US businesses are well run. The UK business has predictability of revenues until the end of the current regulatory period in 2021 and is delivering returns ahead of OFGEM’s expected ‘base returns’. In the US, a rate filing programme is underway, which will result in enhanced returns in the years ahead. Now that the sale of the UK Gas Distribution is complete, management can continue to focus on delivering shareholder returns across its business units. Management targets 5-7% asset growth, and our fair value per ADR of $69.40 offers 9.1% upside versus current prices..." 

£4m+ top-up funding being sought
Blancco Technology (BLTG) | Equity Development, 25 April

"Although AIM offers growth stocks far less onerous reporting requirements than those listed on the LSE, there are nonetheless disclosures that need to be made. Most of the time this is beneficial, but by following the strict ‘letter of the law’, one can occasionally overstate the severity of short-term issues..." 

Good progress continues
WANdisco | WAND) | Edison, 24 April

"Encouraging progress looks to have continued in Q1 with WANdisco (WAND) securing a $4.1m deal with a multinational financial institution and with the business operating at cash flow break-even. The launch of Fusion V2.10 is significant in that it expands WANdisco’s replication to cover mainstream file storage, enlarges the company’s addressable market and strengthens the proposition General Purpose Replication Platform..." 

Execution Engine
Proactis Holdings (PHD) | Progressive Equity Research, 26 April

Interim results confirmed PROACTIS is executing strongly. In a period during which it consummated its largest ever deal (Millstream), it also added a record number of new customers, drove an acceleration in organic growth and delivered profits ahead of our expectations. The outlook statement remains upbeat with the APF (Accelerated Payment Facility) initiative progressing well. Our FY17E and FY18E forecasts remain materially unchanged for the time being but further strong execution should give scope to lift numbers later in the year..."