Y/E update – building blocks in place for future success

Consumers continue to respond well to Sosandar’s on-trend, affordable, long lasting, lifestyle appropriate ranges. While market conditions were poor in Feb/Mar, trading has been strong in Apr as delayed seasonal demand becomes evident post year-end. Net cash is higher and the transition to a less-promotional multi-channel global brand is progressing. The emerging high margin stack bodes well for profitable future growth as initiatives gather momentum online and offline, with maiden stores in lat

Positive Q3 update; higher margin growth accelerates

Revenue growth of 23% in the peak quarter (vs +6% in H1) will be well received. Alongside clear share gains, an accompanying 340bps margin uplift is also stand-out in the industry. This stems from adopting a less promotional strategy on its own site, which commenced in Q2. This holds back short-term sales, scale economies and profitability (per the Oct downgrade) but today’s update underlines the demand for its unique ranges, and validates the decision to broaden distribution in the UK and overs

Hybridan Small Cap Feast - 15 Dec 23

15th December 2023 The Small Cap Team will take a break until Monday 8 January 2024 after today. Merry Christmas to all our readers. @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in

H1 results in line. Growth re-accelerates in Q3

H1 financials were well trailed in the Oct pre-close, including the temporary drag on sales and scale economies from a change of promotional strategy on its own website. The transition to a full price multi-channel brand is making headway, though, with growth accelerating to 16% in Oct/Nov (vs 4% in Q2) and gross margin expanding further. We continue to see substantial future in the Sosandar brand, and see recent weakness as an opportune entry point.

Hybridan Small Cap Feast - 18 Oct 23

18th October 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obje

Near term investment to create further future value

SOS has traded well in H1 in its 3rd party channels and is a top performing brand at M&S/Next. New agreements have been announced in OZ and CAN. It has also unveiled plans to become a full-price ‘multi-channel’ brand, with the 1st stores to open by spr’24 a timely development in our view. This explains why H1 gross margin is so strong, as it has reduced promotional activity albeit lower resultant short-term volumes on its website reduce 24/25 forecasts, which markets may dislike. The channel dat

Taking the Upper Brand: Brands Sector Overview

The earliest dated brand has long been contested; the majority point to Kongō Gumi, a family run construction company that specialised in Buddhist temples in Japan; its documented record of ownership goes back to 578 AD. Like Kongō Gumi, several different brands have withstood the test of time, albeit without then same degree of longevity. The term brand originates from the 1500s and means "to burn" in Ancient Norse and was initially used to mark cattle for ownership. This practice can be consid

Capabilities aligned for exciting new growth phase

FY23 was a transformational year. Despite tough external conditions SOS made strong financial progress with growth in both sales & profitability, and raised £5.5m in an over-subscribed placing to accelerate growth. With a broader product offering, higher gross margin and very compelling customer KPIs, including LTV/CAC, now is the right moment to accelerate profitable expansion. New capabilities to transact and fulfil internationally, and the imminent launch of its App and new personalisation to

Positive exit rate into FY24 and accelerating growth

The full year update signals positive sales/margin trends continued in Q4. With a step-change in resource/capability to expand overseas accommodated within forecasts, the medium to long term potential has increased. Having raised £5.5m in Feb at 22p, SOS is now very well-placed to deliver a step-change in scale and profitability by accelerating multi-channel distribution and other growth plans, including customer acquisition where LTVs are compelling. We see a big opportunity in Mar’25 in partic

Audioboom Group - Q1 24 revenue growth of +11%, FY24E forecasts reiterated

Audioboom’s FY23 results and Q1 trading update show Q1 24 revenue growth of +11% yoy, $6.7m of March 2024 revenue marking the platform’s highest revenue month since May 2022, and a confident outlook that leads us to reiterate our FY24E forecasts. Following the focus on new initiatives through FY23, the platform is now in its strongest ever operational position, with a record 1.1bn monthly ad impressions created in March 2024, record global audience reach of 38.6m unique global listeners in Janua

Alphawave Semi: FY23 trading update, amended forward guidance

Alphawave Semi has reduced guidance for FY23 and prospectively citing lower revenues from China, changes in expected revenue recognition from long-term contracts, and continuing investment in R&D. The share price has reacted negatively, giving up most of the gains since the trading statement at the end of January. Current consensus, which is a good match for pre-existing guidance, should be reduced, most likely following release of the FY23 results and full 1Q24 trading update due on 23 April. H

Crimson Tide - FY23 reports +15% revenue; investment phase complete

Crimson Tide has reported FY23 results to December in line with expectations, with additional operating leverage benefitting updated FY24 and maiden FY25 and FY26 forecasts. FY23 delivered +15% revenue growth to £6.2m at 86% GM, of which over 90% is recurring, and maintained £5.8m ARR even after unexpected customer churn in the year as we previously noted. Crucially, the Group achieved milestone adj EBITDA profitability of £0.4m at 7% EBITDA margin, and edges closer to adj PBT profitability expe

Morning Note – 16 April 2024

Devolver Digital (DEVO LN) - Rebuild year

Devolver Digital encouragingly delivered 2023 results slightly ahead of expectations and provided a steady medium-term outlook that leads us to reiterate our 2024 Adjusted EBITDA estimates. Longer term, the company is now planning to further develop its two major planned titles, Human Fall Flat 2 and System Era's next major new release. We now expect those major titles to be released in 2026 rather than 2025, meaning we lower our 2025 Adjusted EBITDA forecast to $10.6m from $17.6m but introduce

Morning Note – 15 April 2024

Checkit - New product launch and contract wins

Checkit has won contracts with two customers worth at least £417k over the three-year lives of the contracts, confirming its ability to upsell to its existing customer base and supporting our forecasts. Having trialled the new technology with multiple customers, Checkit has launched its Asset Intelligence module, which uses advanced analytics and machine learning to enhance customer sustainability, reduce costs and increase revenue.

Soft growth patch

Auction Technology Group - H1/24 Trading update

ATG’s H1/24 trading statement indicates revenue for the six-month period to 31 March 2024 was $86m, a 6% increase on H1/23 (1% organic growth), helped by the addition of the EstateSales.Net (ESN) marketplace last year, which performed well in the period. Total marketplace revenue increased 2% (organic), driven by growth in value-added services (VAS) and event fees, offsetting a decline in commission revenue (mainly through lower asset prices).

Morning Note – 17 April 2024

Intelligent Ultrasound Group - GE Healthcare launches new Voluson Signature with

GE Healthcare has announced the launch of the Voluson Signature 20 and 18 ultrasound systems, with the related press release noting these systems ‘comprehensively integrate artificial intelligence’ to improve the ultrasound procedure for clinicians and the women being scanned. These ultrasound systems include SonoLyst, the AI which incorporates Intelligent Ultrasound’s ScanNav Assist and ScanNav AutoCapture AI software. The launch of additional Voluson systems including the SonoLyst suite of AI

Touchstar - Full year results: Recurring revenue strategy delivers further profit growth

Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning's full year results reflect the outcome of a multi-year strategy coming to fruition for the group, with recurring revenue growth of 8.7% delivering overall revenue growth of 7.1% and in turn a 60% increase in PBT to £0.7m. Over the past few years, Touchstar has focused on enhancing the returns from their product offering through a shift towards recurring software licen

It’s not what you sell, it’s the way that you sell it

This report is intended to help UK small- and mid-cap investors gain a better understanding of software companies’ routes to market, and to highlight how one of the most important facets of the way in which they grow and deliver value is routinely ignored.  We examine sales processes for six UK-listed companies and one that has recently been taken over, and consider why they have followed their respective paths.

LIBERUM: Cirata plc: Cirata from the flames

Engage XR Holdings - Expanding from FY23, FY24E forecasts reiterated

ENGAGE XR’s FY23 results show revenue and net cash in line with the February trading update, EBITDA ahead at -€4.0m vs -€4.5m due to the split of cash outflow between opex and working capital, and a confident outlook that leads us to reiterate our FY24E forecasts. FY23 revenue for the core ENGAGE platform was unchanged vs FY22 at €3.3m, as H2 23 revenue was impacted by the record seven-figure contract announced in February shifting to 2024, and several enterprise customers scaling back renewals