Small Cap Breakfast
Block Energy— UK based oil exploration and production company whose main country of operation is the Republic of Georgia. Raising £4m. Mkt cap £9.3m. Due early June. Codemasters Group— video game developer and publisher, specialising in high quality racing games. Offer TBA. Seeking £15m in primary. Due 1 June. Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June. Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Offer TBC, expected late May. Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May Team17 Group -video games label and creative partner for independent developers. 2017 revenues of £29.6m and Adjusted EBITDA of £12.9m. Raising £45.1m primary and £62.5m secondary at 165p. Mkt Cap £216.6m. Expected 23 May 2018
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22 May 18
UK Food to Go
Ongoing labour cost challenges, higher input costs, sustained brisk organic sales volume growth and further room for innovation at both product and distribution level were the key investment features of the 2018 British Sandwich & Food to Go Association AGM and Conference, which was held in London yesterday. Moreover, the association had strong messages on food waste reduction and CSR, both of which are important as the industry body continues to lobby the UK government hard ahead of Brexit. The chief UK listed plays on Food to Go are Greencore (GNC LN, BUY, 310p), Cranswick (CWK LN, HOLD, T/P 2700p) and potentially Produce Investments (PIL LN, BUY, T/P 240p). Our overall industry stance remains positive.
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20 Oct 17
Digging in Well
Produce Investments’ (PIL LN, BUY, T/P 240p) released FY2017 results on 28th September 2017 where revenue beat expectations and matched EPS estimates. In this Quick Sharpener we update our forecasts and take the opportunity to increase our price target from 210p to 240p. BUY. Exhibit 1 details our changes to forecasts. We maintain revenue at £203m, FY2018 and £206m, FY2019. EBIT is increased 18.8% to £9.6m in FY2018 and 16.9% to £10.0m in FY2019. The rise in EBIT margin from 4.0% to 4.8% reflects operational efficiencies achieved through the newly integrated ERP system.
05 Oct 17
“Assembled Here Together”
A debate about why major US food manufacturers’ margins appear consistently higher than those achieved in Europe is, in our view, worth having. In particular, should greater willingness to outsource production processes and focus more on marketing, new product development, finance and strategic M&A be the answer, there could be significant revenue growth opportunities for those who act as food industry solution providers.
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29 Sep 17
Core Organic Strength Central to Opportunity
Produce Investments’ (PIL LN, BUY, T/P 210p) FY2017 results were ahead of both our own and market expectations at the revenue level but matched consensus on EPS. On 21st September 2017 the company stated that trading remained in line with Board expectations whilst it announced key Board changes – i.e. Chairman Neil Davidson and NED Sean Christie will retire from the company this calendar year.
28 Sep 17
Core Organic Strength Central to Opportunity
Produce Investments (PIL LN, BUY, T/P 210p) announced yesterday that Chairman Neil Davidson and Non-Executive Director Sean Christie intend to retire from their respective roles at the time of the company’s AGM in November. The company is due to release preliminary FY2017 results on 28th September. Trading remains in line with Board expectations according to today’s press release.
22 Sep 17
Eyeing Up Opportunity
Produce Investment’s (PIL LN, BUY, T/P 210p) interim profits were well beneath inferred market expectations as delays in the recovery of ex-farm potato prices coincided with unusual costs associated with the company’s implementation of a new ERP system. Interim EBIT fell to £0.2m from £3.4m last year.
24 Mar 17
Small Cap Breakfast
K3 Capital Group—Schedule 1 from the Group of business and company sales specialists across business transfer, business brokerage and corporate finance. Admission date and fundraise details TBC. Integumen— Schedule 1 from the personal health company developing and commercialising technology and products for the human integumentary system. Raising £2.16m at 5p. Expected market cap £8.16m. Admission expected 5 April. Sentinel—Investment company expecting NEX admission/introduction on 24 March. £636k raised pre-IPO. BioPharma Credit—Expected Gross Initial Acquisition Proceeds now c.$338m. Gross Cash Proceeds capped at $423m with placing and open offer. Results expected 23 March with admission now due 30 march.
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23 Mar 17
FY2016 Profits in line despite modest revenue beat
Produce Investments (PIL LN, BUY, T/P 210p) reported FY2016 preliminary results ahead of both our own and market expectations at the revenue level but with operating profits in line. Net revenue advanced to £185.1m from £178.4m in FY2015 – we were looking for £181.5m - while adjusted operating profits rose from £8.0m to £9.2m. Proposed full year dividend is 7.32p, a 2.2% gain on last year. The company is confident that despite challenging trading conditions, it is in “a strong position to grow.”
29 Sep 16
UK FMCG winners and losers from Brexit
The British referendum on EU membership is scheduled for 23rd June 2016. While opinion polls and bookmaker odds still bias towards “remain,” it makes some sense to assess briefly potential the FMCG winners and losers in the event of Brexit happening.
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03 Jun 16
Digging up cash
Produce Investments is well placed to prosper, both in its core mainland GB potato business and in such useful additions as Jersey Royals and daffodils. A proven positive M&A track record is a major plus for a cash generative company with clearly achievable targets. In our view, valuation is attractive. BUY
18 May 16