See what was trending this week...
Companies: 94A, AUTG, BOTB, BIOM, BOY, BUR, CAR, CKT, EMH, EXO, FEVR, FUL, G4M, GRPEF, HDD, HAYD, HCHOF, IKA, IQE, ITX, CRPR, JOUL, MEGP, MGAM, MAB1, NANO, OXIG, CAKE, MLM, TRC, SCS, SHOE, SCE, SYM, SYN, VCP, VCT, ZEN
Shopping Trolley
from finnCap, 25 July
Gold Access
Best Of The Best | Fulham Shore | Hotel Chocolat | Joules | Patisserie | Photo-Me | Real Good Food | Revolution Bars | SCS Group | Shoe Zone | Victoria
"While the decline in pub numbers over the past decade has often been attributed to the smoking ban, a rebalancing of demand from drink-led to food-led occasions and an uneven playing field between pubs and supermarkets on beer duty and business rates, we think that pubs also need to shoulder some responsibility, having largely failed to keep pace with changing trends, in particular lacking concepts that appeal to Generation Z consumers and Millennials. In this report, we discuss the characteristics of ‘Gen Z’ and Millennials (socially conservative, fiscally cautious, digitally native); what they like doing (lots in social isolation, far less in pubs and clubs); and how to tempt them back into pubs (create an ‘Instagram-able aesthetic’, offer free wi-fi and more technology, widen the wet offering and embrace non-drinkers, offer pop-up ‘immersive activities’ and employ retro with special offers that cater for groups rather than ‘couply’ stuff). Generating a strong social media presence (not just Facebook but also Instagram, Snapchat and Twitter) allows operators to be with their customers well after closing time and encourages customers to do their marketing for them."
Fevertree Drinks (FEVR)
Sparkling UK Dominates H1 Sales Growth | Whitman Howard, 25 July
Gold Access
"Fever Tree (FEVR LN, HOLD, T/P 1700p) interim results reported brisk 77% revenue growth to £71.9m (H1 2016: £40.6m). Adjusted EBITDA at the half year stage rose 102% to £25.2m (H1 2016: £12.4m) and diluted EPS increased by 106% to 16.7p (H1 2016: 8.1p). The UK drove revenue growth, benefiting from distribution gains made in H2 2016 and the strong performance of the off-trade which now accounts for 50% of UK’s revenue split. These strong set of results mean Fever Tree would only need to achieve £55.8m of revenue in H2 in order to meet full year consensus of £126.7m compared with £61.6m in H2 2016."
Mortgage Advice Bureau (MAB1)
Trading update | Zeus Capital, 25 July
Gold Access
"Ahead of the publication of its interim results on Tuesday 26 September, Mortgage Advice Bureau (MAB) has released a pre-close update, which reveals: Revenue increased 15% YoY to £49m (1H16: £43.1m); Average adviser numbers rose 14% to 974, Total number of advisers rose 58% since 30 June 2016 and 6% since last year end to 1,008 on 30 June 2017 with “new business recruitment 2H weighted”; Revenue per adviser rose modestly compared to 1H16 which benefited from the 1H16 spike in Buy-to-Let applications; At 30 June 2017, the Group had a £19m cash position including £11m unrestricted cash balances."
IQE (IQE)
Start of mass market VCSEL ramp-up | Edison, 26 July
Free Access
"IQE’s pre-close trading update notes a 16% year-on-year increase in wafer revenues in H117, driven by strong double-digit growth in photonics and currency tailwinds. Importantly, the photonics growth heralds the start of a mass-market ramp up in VCSEL (vertical cavity surface emitting laser) wafers for consumer applications, encouraging management to proceed with plans to substantially expand capacity ahead of anticipated demand in H218. We make modest upwards revisions to our estimates, noting the potential for further upgrades as there is greater clarity on photonics volumes."
Burford Capital (BUR)
Exceptionally strong first half results | N+1 Singer, 27 July
Gold Access
"Given the previously-disclosed secondary sales of 25% of the entitlement to proceeds from the Petersen case, about which we have written extensively in the past, expectations for Burford’s first half results were high, and they have not disappointed! Revenue and profit metrics are up 130-170% on the prior year period depending on the line-item, accompanied by very strong cash proceeds. Asset management has made a good initial contribution earning maiden performance fees and there appears to be no shortage of opportunities to grow the business. We have increased this year’s adjusted PBT estimate by 69% to reflect Argentina-related developments, with a smaller upgrade for 2018. Pending finalisation and publication of our updated valuation work, we reluctantly have to keep our recommendation under review."
Gear4music (G4M)
AGM: Buoyant trading continues; Strategic developments on track | Panmure Gordon, 28 July
Gold Access
"Today’s in line AGM trading statement reassures that G4m continues to make progress on multiple levels. The statement is qualitative but confident in tone in confirming that; (1) buoyant trading continues, (2) long-term strategic developments to make G4m a significantly larger, global company remain on track; and (3) FY18 will represent “another year of good progress”. To reflect management’s measured confidence and our increasing conviction that G4m has a big addressable market, a clear USP, and a scalable business model to capture the financial benefits of such a global opportunity, we raise our TP to 920p, and see ample scope for more increases as G4m demonstrates further evidence of operational, strategic and financial progress. Our previous TP of 700p has now been comprehensively surpassed, reflecting significant investor demand post the oversubscribed placing at 690p on May 19th raising £4.2m equity growth capital to accelerate the execution of the company’s strategy. We reiterate our BUY."
Advanced Materials – the building blocks of Tomorrow’s World
from Hybridan, 26 July
Gold Access
Applied Graphene Materials | Autins | Biome Technologies | Bodycote | Carclo | Elektron Technology | European Metals | Exova | Graphene Nanochem | Hardide | Haydale Graphene Industries | Ilika | Itaconix | James Cropper | Morgan Advanced Materials | Nanoco | Oxford Instruments | Plastics Capital | Surface Transforms | Symphony Environmental Technologies | Victrex | Zenyatta Ventures
"Whether we know it or not, advanced materials are a core component in the everyday life of the everyday person. They are the key material in items we often disregard, such as printer inks and lotions, to objects which defy the laws of gravity like the Airbus A380 and London’s Shard. Furthermore, these materials are not only essential to many objects and structures, but, due to their superior qualities, are the key to the advancement of many industries. One such example is the use of carbon fibre which offers five to ten times more rigidness, stiffness, and strength than its aluminium counterpart. As a result of these impressive qualities, motorsport and athletics have improved ten-fold since their mainstream use and new records are broken every year."
Photo-Me International (PHTM)
Rapid innovation within very tight parameters | Progressive Equity, 27 July
Free Access
"Photo-Me is something of a paradox – although it is a £600m market cap business, it still operates as if it were a nascent entrepreneurial business. It is risk averse and yet highly innovative. Its strength derives from the interaction between three core capabilities - building durable relationships with retail site owners, strong management of technology and product development, and delivery of operational logistics excellence. This note describes the Group’s positioning, and the core investment thesis."
Joules Group (JOUL)
A strong 2017 with multiple catalysts ahead | Liberum, 26 July
Gold Access
"A strong set of results for FY17E with PBT 12.2% ahead of Liberum expectations set at the time of the IPO (May 2016). Revenue growth in the UK of c.18% and c.36% in International markets has resulted in c.20%revenue growth for the group. There is now a growing pipeline of opportunities in Licensing that provides further evidence of the growing appeal of the brand as well as potential positive catalysts in FY18E and beyond."
