Most popular equity research this week | 5-9 June

Government uncertainty to weigh on domestic consumer stocks

N+1 Singer, 9 June

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Featuring: Findel, Halfords, N Brown, Howden Joinery, Swallowfield, Walker Greenbank, Cambria Automobiles, Boohoo.Com, MySale, Vertu Motors, Lookers, BCA Marketplace, Marshall Motor Holdings, Carpetright

General Election 2017 – Brief Word on Forex
Whitman Howard, 9 June

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"With a hung parliament in prospect, the chief focus of UK FMCG stocks in the immediate aftermath of the general election should be forex. This Quick Sharpener outlines the immediate winners and losers from potential currency weakness. Overall, a weak pound tends to benefit the multi-national Big-5 because, as Exhibit 1 highlights, they are substantial overseas earners..."

Boohoo.com (BOO) 

106% group growth delivered in Q1, £50m new equity to fund capex enabling £3bn sales | Zeus Capital, 8 June

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"boohoo continues to exceed expectations, delivering Q1 group revenue growth of some 106% to £120.1m, with standout like-for-like revenue growth of 78%. Significantly, the group has also announced plans to construct a brand new automated ‘super-site’ that will provide boohoo with an additional £2bn of net sales capacity. The c.£150m of capex required will be invested over the next three years and will be funded by a £50m equity placing alongside cash generated by the business. In our view, the £50m fund raise and continued outperformance gives boohoo enormous flexibility to grow, and when combined with the existing Burnley site, will bring group sales capacity towards £3bn, a serious statement of intent. Alongside today’s new equity placing, 3.25% of the total share capital is also being placed from existing shareholders, equating to c.£80m. We note that the sellers will be subject to a six month hard and six month soft lock up period."

Best of the Best (BOT)

Prelims comfortably ahead, 6.5p special div | finnCap, 8 June

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"Adj. PBT of £1.5m is 7% ahead of our upgraded expectation and shows 43% y-o-y growth, driven principally through a meaningful improvement in both gross and operating margins. Cash generation meanwhile continued to be very strong with FCF/adj. PAT >100% for the fourth consecutive year. This meant a year-end cash position of £2.1m, of which £0.8m will be distributed to shareholders through an ordinary and special dividend of 1.4p and 6.5p respectively. We upgrade FY18E adj. PBT by 6% (suggesting 8% y-o-y growth) – conservative assumptions we believe, considering that BOTB plans to increase its marketing spend by c.70% to £2m, which if used as effectively as previous years, provides upside risk..." 

Workspace (WKP) 

Unique position for strong growth | Liberum, 8 June

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"Workspace remains extremely well positioned to benefit from the continued evolution of occupational demand towards shorter, flexible leases. Its combination of freehold model, established scale and customer service focus mean it also offers a unique, lower risk, means to play this trend..."

Gear4music Holdings (G4M) 

European horizons open up | Edison, 5 June

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"Gear4music’s continued market share gains in the UK, and triple-digit growth in Europe, give line of sight to a significantly larger business with enhanced investment returns. Institutional investors have demonstrated their confidence in the company’s growth strategy with the recent placing, but that has not been sufficient to address a market that continues to focus on higher value based on increasing market share..." 

AstraZeneca (AZN) 

Delivering In Cancer Therapy | Beaufort Securities, 5 June

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"AstraZeneca (AZN) this morning announced another positive result in one of its Phase III Oncology trials. Lynparza, has shown itself to be significantly more effective than chemotherapy in reducing the risk of breast cancer spreading, and/or resulting in the patient’s death. This comes after recent positive results for Imfinzi, which treats patients with locally-advanced lung cancer, for whom surgery is not an option. Lung cancer is the leading cause of cancer death among men and women, accounting for one-third of all cancer deaths, more than breast, prostate and colorectal cancers combined. Looking forward, AZN is becoming increasingly dependent upon cancer drugs for its growth, which is a risk, should Trial results not be ultimately reflected in revenues..."

VP (VP/) 

Making all the right moves | Equity Development, 6 June

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"Form is temporary, but class is permanent” is a sporting truth that equally applies to the corporate world, describing those companies that consistently outperform. One such stock is Vp, who today issued another “excellent” set of results. FY17 PBTA and EPS coming in at £34.9m (+17%) and 69.5p (+12%) respectively, with the dividend hiked up 17% to 22p on the back of 16% ROCE - once again in excess of the Board’s stretching ‘through-cycle’ goal of 15%..." 

Sopheon (SPE) 

Confidence in ‘continued positive development’ | Progressive Equity Research, 8 June

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"Sopheon’s AGM statement notes that, during 2017, it has continued to advance its Accolade software platform, launching version 11.1 in February. The Group has recently been included in Gartner’s Magic Quadrant for Project Portfolio Management, a strong validation of its unique position in the enterprise portfolio management, enterprise initiative management, and product development markets. Full year revenue visibility is up, despite a robust prior year comparator. That combines with a strong pipeline to produce a confident statement from the Board on future delivery. We expect that the benefits of Sopheon’s products will continue to drive customer wins as the requirement to manage innovation becomes more fully recognised..."