Surface Transforms (SCE LN) - Positive AGM update

In an AGM trading statement today, Surface reiterated previous guidance1 that, with good progress being made in all departments, profitability should be achieved in 2022e. Further, following communication from the Group’s largest customer, OEM 8, on production and delivery schedules, Surface has now commenced high volume series production of its carbon ceramic brake discs. We expect deliveries to OEM 8 to ramp up over the next two months. Deliveries to other significant customers are also contin

Hardman & Co Monthly: June 2021

In terms of environmental policy, the quest to cut carbon emissions dramatically and to achieve net zero remains high on the political agenda, although the war in Ukraine – and specifically the issue of gas supplies – may weaken these commitments. In any event, the environmental performance of China and the US – responsible, between them, for around one half of global emissions – will be key. In Asia, where ca.85% of energy consumption is currently being met by fossil fuels – there are ca.4.6b

The Hardman & Co Monthly: May 2022

Feature article: Latest ONS survey: steady as she goes…and ignore retail investors at your peril The ONS (Office for National Statistics) has been charting the beneficial ownership of UK-quoted companies periodically since the early 1960s. The latest paper was published in March 2022, and considers the data for December 2020. At December 2020, “Rest of the World” investors owned 56.3% of the market, a further growth since the last survey, while UK institutions’ ownership edged up to 31.6%.

Surface Transforms (SCE LN) - Factory Visit: Transformation

Surface Transforms has hosted a Capital Markets Day and site visit to its Knowsley, Merseyside, factory. We last visited about a year ago and the transformation is significant. The factory has been massively expanded and reorganised, with new equipment and processes configured for high volume continuous carbon ceramic brake disc production. The Group has had a highly successful few quarters, announcing a c.£100m contract with OEM 8, replacing a previous agreement worth £27.5m. Also, a £45m award

Surface Transforms (SCE) Growth rate and visibility enhanced even further

On 24 March, Surface Transforms (SCE) announced a further major multi-year contract from OEM 8. This contract is its largest to date, and brings an additional ca.£70m lifetime sales value. The company’s strong outlook is entrenched, as aptly summarised by the Chairman some time ago with the FY’22 interim results, which were announced on 13 September 2021: “The Company now expects to enter a period of high growth, partially, but not solely based on a lifetime value OEM order book of ca.£70m". Th

Hybridan Small Cap Feast 22/04/22

Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen? Lift Global Ventures plc to join AQSE Growth Market. The Company's investment strategy is to operate as an enterprise company seeking acquisition or investment opportunities within the financial media and technology industries. Within these broad industries, areas of focus may include: Financial news websites and other forms of “new media”, Investment research providers, Financial PR, IR, design and marketin

Surface Transforms (SCE LN) - Healthy progress with the ramp-up

Surface Transforms has had a highly successful few quarters, securing large new OEM customer contracts, implementing a major expansion of factory capacity and a new manufacturing strategy to support volume production. 2021a results were in-line with our forecasts. Last month, Surface Transforms announced a revised c.£100m contract with customer OEM 8, replacing a previous contract worth £27.5m. A £45m award was also announced in December with OEM 6; the total multi-year order book now stands at

Morning Note – 4 April 2022

Surface Transforms - FY2021 in line, all eyes now on FY2022 and beyond

SCE has announced full year results to end December 2021, which are very much in line with expectations. Revenue increased +21% y-o-y largely due to an increasing flow of prototype parts to prospective OEMs and start of production of the Aston Martin Valkyrie. The year end order book was £115m (since increased to £185m), while year end gross cash was £13m. This leaves the business in a strong position to execute on the rapid ramp up in revenues now forecast. We are not materially changing foreca

Morning Note – 24 March 2022

Surface Transforms (SCE LN) - £100m contract signed

Surface Transforms has signed a c.£100m contract with existing customer OEM 8. This replaces the previously announced contract from September 2020 which was worth £27.5m. OEM 8 is seeing very good demand for the vehicle variant which will fit the Group’s market-leading carbon ceramic brake discs. Management has indicated significant upgrades to sales for 2023e-2027e. Naturally, additional costs will be incurred with the production ramp-up. Factory capacity is currently at c.£50m of annual sales

Morning Note – 31 January 2022

Surface Transforms (SCE LN) - Positive trading update

Surface Transforms has provided a brief pre-close and operational update. Revenue for 2021a grew by 20% to £2.4m (2020a: £2m and versus guidance of “under £3m”). Gross cash was a healthy £13m (in line) but with drawdown for further capex spend due shortly. On the production ramp-up, the Group has reported that daily assembly volumes have reached management targets. The specific production issue on the furnace described in the announcement on 14 December has been fixed, with “satisfactory” produc

11 for 22 - Investment ideas for 2022

Where next for markets in 2022? In our view, if COVID is not on the way out, we are just going to have to live with it now and it will have less and less impact on economic forecasts going forward. Instead, the bigger issues for investors to deal with in 2022 are cost inflation and staff shortages for business (which are already hitting earnings momentum), energy cost inflation and higher taxes hitting the consumer wallet, and markets that start from very elevated valuation multiples compared wi

Morning Note – 16 December 2021

Boohoo Group plc (BOO LN) - Q1 Trading Update

• Q1 financial highlights: Group revenue of £445.7m is -8.3% YOY vs. a strong comp (Q1 FY22 revenue +32.1%), in line with Zeus’s forecast and management’s previously stated guidance. Gross sales growth remained positive +9% YOY but was offset by higher returns driven by normalisation of returns rates due to product mix change. In our view the impact of lockdown restrictions over the past two years limits the usefulness of assessing the Group’s progress on a YOY basis. Over the three-year pre-pan

Hybridan Small Cap Feast 28/06/2022

Joiners: No Joiners Today. Leavers: Raven Property Group has left the Main Market. What’s cooking in the IPO kitchen? Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or req

Cenkos: Seeing Machines Ltd -- RFQ win and increased market share target

Seeing Machines has announced that it has been appointed by an existing global automotive Tier-1 customer to deliver its FOVIO Driver Monitoring System (DMS) for an existing global automotive group. This programme is to be delivered via Seeing Machines' embedded Driver Monitoring Engine software, is led out of North America and covers a broad array of vehicle models for safe level 2-3 semi-autonomous driving and meeting anticipated regulatory requirements. The appointment comes with minimum volu

Shoe Zone plc (SHOE LN) - 30% upgrade to FY22 Adj. PBT

Moderating freight costs, rental cost savings and selective price increases have driven a 30% upgrade to our FY22E adjusted PBT forecast.

Hybridan Small Cap Feast 22/06/2022

Dish of the day Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June. LifeSafe Holdings, a fire safety technology business with innovative fire safety p

Morning Note – 24 June 2022

Hybridan Small Cap Feast 23/06/22

Dish of the day Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or request an overd

Hybridan Small Cap Feast 20/06/2022

Joiners: No Joiners Today. Leavers: Tungsten Corp and Sensyne Health have both left AIM. Hibernia REIT has left the Main Market. What’s cooking in the IPO kitchen? Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June. LifeSafe Holdings, a fi

Cenkos: CAP-XX Ltd - New Lithium Ion Capacitors

CAP-XX has announced that it has expended its product offering to include Lithium-ion Capacitors (LICs). LICs are also called hybrid supercapacitors as they blend two different technologies; the positive electrode is like a supercapacitor, and the negative electrode is similar to a Li-ion battery. CAP-XX hybrid supercapacitors maintain key benefits of batteries, including higher operating voltage (3.8V) and increased energy density, while maintaining traditional characteristics of supercapacitor

WH Ireland: Solid State (SOLI) - Trading update – strong finish to the year results in further earnings upgrades

Solid State is a specialist value added component supplier and design-in manufacturer of computing, power and communications products. Following the group's trading update in February, when we raised our 2-year earnings expectations by c.10%, Solid State this morning reports an exceptionally strong end for the year to 31 March 2022 as positive trends in trading continued and well-publicised semi-conductor supply chain challenges were controlled. As a result, FY 2022E group revenue is now anticip

LIBERUM: Frasers Group* - We expect a resilient performance; read across from JD Sports is positive

Shoe Zone PLC (SHOE LN) - Initiation: Best foot forward

Shoe Zone’s accelerated digital strategy and defined store rationalisation programme, alongside decisive action on cost control and cash preservation, means the Group is emerging from the pandemic as a leaner, stronger and more resilient business. Robust cash generation means we expect the Group to be debt free and able to reinstate its dividend in the current year.

Small Cap Feast

Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation £20m raising c. £8m “to finalise the development and launch

Shoe Zone PLC (SHOE LN) - FY21 expectations upgraded

Shoe Zone is upgrading FY21E Adjusted PBT expectations to £8.0m, a 22.7% upgrade to our previously published forecast of £6.5m, following initial work done as part of the ongoing yearend review process. The benefit of this upgrade also flows through to FY23E where we increase our forecasts by the same quantum. Despite the recent share price rally, we continue to believe Shoe Zone trades at a deep discount to its fair value, with a return to the dividend list anticipated in the current financial

Solid State (SOLI) - Interims – record period despite supply chain challenges; EPS estimates unchanged

Solid State is a specialist value added component supplier and design-in manufacturer of computing, power and communications products. Interim results this morning read well, illustrating both a record six-month period, including very strong performances from both Willow Technologies and Active Silicon acquisitions, and an order book as at 30 November standing at a record £70.3m. While global supply chain challenges will continue to need to be successfully managed, the Board remains confident of