Blackbird plc* (BIRD.L, 19.25p/£64.7m) | Mirada plc* (MIRA.L, 92.5p/£8.2m) | Tern plc* (TERN.L, 10.75p/£29.0m) | Checkit plc (CKT.L, 39.5p/£24.5m)
Companies: BIRD MIRA MIRA TERN CKT
CAP-XX Ltd* (CPX.L, 3.1p/£10.1m) | Gfinity plc* (GFIN.L, 1.675p/£12.0m) | MTI Wireless Edge Ltd* (MWE.L, 38.5p/£33.8m) | Newmark Security plc* (NWT.L, 1.05p/£4.9m) | Mirada plc* (MIRA.L, 95.0p/£8.5m)
Companies: CPX GFIN MWE NWT MIRA
Tern plc* (TERN.L, 10.0p/£27.0m) | Gfinity plc* (GFIN.L, 1.45p/£10.2m) | Mirada plc* (MIRA.L, 95p/£8.5m) | Brave Bison plc* (BBSN.L, 1.3p/£8.0m)
Companies: TERN GFIN MIRA BBSN
Gfinity plc* (GFIN.L, 1.65p/£11.6m) | Mirada plc* (MIRA.L, 95p/£8.5m) | Brave Bison plc* (BBSN.L, 1.25p/£7.7m) | MTI Wireless Edge Ltd* (MWE.L 38p/£33.4m) |
Companies: GFIN MIRA BBSN MWE
Today’s FY20 pre-close points to further revenue growth and a significant improvement in adj. EBITDA for the leading provider of integrated provider of integrated software for Digital TV operators and broadcasters, albeit slightly light of our forecasts as some work slipped into FY21. Revenue is expected to be >$13.0m (FY19: $12.3m, ACLe: $14.2m) and adj. EBITDA of $2.3m (FY19: $0.8m; ACLe: $2.6m). Revenue from izzi Telecom, Mirada’s largest customer, remained stable and it has now deployed on more than 2.8m set top boxes (STBs). izzi has also selected Mirada for its new generation service. Encouragingly, revenue beyond izzi continues to grow as Mirada works on projects in multiple territories and negotiations with potential customers are also ongoing. Mirada has successfully transitioned to remote working and is helping its clients cope with an exceptional increase in service demand. That said, it is impossible to predict the impact of COVID-19 and hence we are temporarily withdrawing FY21 forecasts.
Companies: SGI ANP RRR MLVN RQIH DXRX BRH EKF MIRA KP2
Mobile Tornado Group plc* (MBT.L, 2.95p/£11.2m) | Mirada plc* (MIRA.L, 72.5p/£6.5m)
Companies: Mobile Tornado Group Mirada
Disney+ hits 22m mobile users, SoftBank backed firm downsizes IPO, German mobile carrier selects Huawei
Companies: ENET 7DIG MVR ZOO ZOO AMO BOOM MIRA MWE
TikTok owner Beijing ByteDance Technology is in talks with big music labels - Universal Music, Sony Music and Warner Music - for global licensing deals to include their songs on its new music subscription service, the Financial Times reported on Sunday. ByteDance is looking to launch its music streaming as soon as next month, initially in emerging markets such as India, Indonesia and Brazil, before a future opening in the United States, the FT reported, citing people familiar with the matter. HP's board of directors said Sunday that they unanimously rejected a proposal from Xerox to acquire the company, because the offer is not in the best interest of shareholders and would undervalue HP. Xerox had offered HP $22 per share in its takeover bid for the company. HP is worth $29 billion and is over three times the size of Xerox, which makes printers and copiers, in terms of market cap. Japan's SoftBank plans to merge internet unit Yahoo Japan with messaging app operator Line Corp to create a $30 billion tech giant, as it bags struggling internet companies to bulk up against rivals like Rakuten Inc. The telco in a statement said Yahoo Japan, which last month changed its name to Z Holdings Corp, will merge with Line, owned by South Korea's Naver Corp, in a deal to be completed in October 2020. The companies aim for a definitive agreement by next month in a transaction that will see SoftBank Corp and Naver form a 50:50 venture that will control Z Holdings, which will in turn operate Yahoo Japan and Line.
Companies: 7DIG MVR ZOO AMO MIRA
Further good performance in H1 from Mirada, a leading provider of integrated software for Digital TV operators and broadcasters. H1 numbers were somewhat skewed by the successful £2.1m disposal of Mirada Connect, its non-core cashless payment parking division, but underlying revenue grew 11% to $5.7m and there was a $0.3m positive swing in underlying adj. EBITDA to $0.3m. Net debt reduced $1.3m to $3.5m. H1 saw a contract win with Plataforma Multimedia de Operadores (PMO), an accelerated deployment at izzi Telecom and roll outs at ATN international (ATNi) in Bermuda and SkyTel (Mongolia). Mirada’s new Android TV custom launcher has been well received with purchase orders of more than $3m. Mirada has also integrated its Iris platform with Netflix and this is being rolled out in Mexico. Management reports a positive outlook with participation on several prospects and an increasing pipeline of opportunities. Forecasts remain unchanged and fair value increases to 182p/share from 175p.
Mirada plc* (MIRA.L, 160p/£14.2m) | Tern plc* (TERN.L, 9.25p/£21.9m) | Character Group (The) plc* (CCT.L, 360p/£77m)
Companies: MIRA TERN CCT
Dropbox shares bounced around after the company reported betterthan-expected third-quarter earnings on Thursday, as investors digested the company's improvements on some key metrics but widening GAAP losses from a year ago. Earnings excluding certain items came in at, 13 cents per share, vs. 11 cents per share as expected by analysts, according to Refinitiv.
Companies: 7DIG ZOO AMO ESYS KNOS MIRA
Roku stock tanked more than 14% in after-hours trading after the company reported a wider net loss in the quarter, as it spent more to attract subscribers to its video streaming platform. Despite the loss, the video streaming company reported 32.3 million active accounts, up from 30.5 million during the previous quarter, and an average revenue per user of $22.58 compared to the previous quarter's metric of $21.06. Roku is targeting international expansion throughout the North and South American markets and expects to launch its first T.V. models in the UK by the end of 2020. Hardware was always a tough market and competition is heightening in our view. Qualcomm said on Wednesday it expected 200 million 5G smartphones to be sold in 2020, including flagship devices launching next fall, a reference Wall Street took as a hint that Apple would offer the faster technology next year. Once 5G networks are widely available sometime next year, Qualcomm, the world's largest supplier of mobile phone chips, and its rivals stand to benefit because the phones will require more chips to gain the speed boost. We’re bullish 5G – and Apple wading in certainly doesn’t hurt market growth in our view. Shares of Chinese internet giant Baidu surged over 4% in after-hours trade following better-than-expected results for the third quarter. Excluding items, EPS came in at 12.61 yuan, beating market expectations, but representing 34% YoY decline. Baidu has faced several headwinds this year including a slowing Chinese economy amid a protracted U.S.-China trade war, increased competition from new search players like TikTok owner ByteDance and increased scrutiny from regulators on the advertising market in the world's second-largest economy. Baidu is righting the ship belatedly after missing the mobile market. We’re waiting to see what happens with its B2B efforts.
Companies: 7DIG ZOO AMO MIRA
AT&T announced the launch of HBO Max streaming service for May 2020, with a new "Game of Thrones" series at the current HBO price of $15/month. The move surprised analysts and investors attending the Warner Media presentation on Tuesday as it was lower than expected. HBO Max is expected to reach 75 million to 90 million global subscribers by 2025, with about 50 million of these coming from the United States. The success of HBO Max is in many ways a referendum on a strategy to merge content with the means to distribute it. Challenger banks and FinTech firms are expected to have half of all consumers using their payments, card and retail banking accounts in the next three years, according to Capgemini. The group’s World Retail Banking Report highlights how challenger banks are changing the overall banking journey as well as offering customers new services, like quick or early access to funds not covered by traditional loan or card systems. Traditional banks have the right product but are "Lagging behind and giving ground to non-traditional payers in the last-mile customer experience". In our view this should surprise nobody. But the acid test of trust through a future financial crisis is yet to occur. Huawei Technologies lifted its share of China's smartphone market to a record 42%, with third-quarter shipments rising by two-thirds as domestic consumers rallied behind it after US sanctions, data released on Wednesday showed. Huawei strengthened its dominance of the world's biggest smartphone market even as the Chinese company was all but banned by the US in May from doing business with American companies, significantly disrupting its ability to source key parts We are surprised by the strength of recent data supporting Huawei.
Companies: 7DIG ZOO AMO BOOM BGO BOKU EQLS MIRA TECH
Google parent company Alphabet reported third-quarter earnings that missed earnings per share expectations but was otherwise in line with what investors expected. Revenues grew 20% YoY but aggressive investments in other bets weighed on profitability. The share price fell 4% overnight as investors digested the relative performance on earnings alongside growing unrest among its staff.
Companies: 7DIG ZOO AMO BOOM MIRA
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Kape’s recent Capital Markets Day (CMD) was an extremely useful update on the many benefits of integrating complementary acquired businesses (including the collaboration between engineering teams) and the opportunities for upselling that new product development brings. Over the last six months, Kape has proceeded with the integration of PIA, expanding the growth of new users through the application of the Group’s user acquisition knowhow and technology. It has also made further enhancements to its product offering which, inter alia, will improve user engagement and retention. This note looks to bring out the main points from the CMD and highlights the significant progress that has been made this year.
Companies: Kape Technologies
U.S. futures and European stocks dropped on Friday as investors mulled a reported conflict among policy makers over a stimulus package for the single-currency region, as well as political upheaval in France.
The Stoxx 600 Index fell after Bloomberg News reported the European Central Bank is facing a potential rift over how much their emergency bond-purchase program should stay weighted toward weaker countries such as Italy. The euro fluctuated following French President Emmanuel Macron's decision to name a new prime minister after asking his government to resign. Rolls-Royce Holdings Plc slumped after the British jet-engine maker said its exploring options to raise funds to strengthen its balance sheet.
The dollar was slightly down, posting its first weekly drop in a month, while American cash equity and bond markets were shut for Independence Day. President Donald Trump will attend an early July 4 celebration at Mount Rushmore with thousands of guests who won't be required to wear masks, while his U.K. counterpart Boris Johnson urged Britons to act responsibly as pubs prepare to re-open and the government lifts quarantine rules on travel for 60 countries.
The friction at the ECB highlights the risk to markets should promised stimulus measures fall short. Investors continue to weigh policy support and upbeat economic data against relentless new outbreaks of the virus. U.S payrolls figures Thursday fuelled optimism of a V-shaped recovery in the world's biggest economy, even as Florida reported that infections and hospitalizations jumped the most yet, and Houston had a surge in intensive-care patients. Emerging-market stocks posted the biggest weekly gain in a month.
Elsewhere, crude oil dipped but remained on track for a weekly gain.
Companies: TGL JSE IAE ADME BP/ DGOC ENOG NTQ NTOG PMO RBD ROSE RDSA UKOG TRIN
Gfinity plc* (GFIN.L, 1.625p/£14.0m) | Blackbird plc* (BIRD.L, 16.5p/£55.4m) | Tern plc* (TERN.L, 11.5p/£31.1m) | The Panoply Holdings (TPX.L, 72.5p/£39.9m)
Companies: GFIN BIRD TERN TPX
We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.
Companies: BCA CLIN CLG CBP DNLM EAH STU FCRM FUTR GTLY INS GLE NICL SDL SPR TRI
Interims from Gfinity, the leading international esports business, saw progress with gross profit growth and cost control resulting in reduced operating losses. Going forward, Gfinity is focusing on three core areas where it has a competitive advantage (eMotorsports, own community and building communities for others) and exiting other areas. As flagged in March, Gfinity has undertaken a strategic review and has started a series of major cost reduction measures including board and senior leadership changes and is adopting a more flexible operating cost model. It is also strengthening its balance sheet with a conditional raise of £2.25m at 1p/share plus a 1:1 warrant. COVID-19 has driven a surge in video gaming and in traffic to Gfinity’s own platforms and has created opportunities, such as the F1 Esports Virtual Grand Prix series. It has also created an increased level of uncertainty for the rest of FY20, however, with major live physical events deferred. Consequently, we are withdrawing forecasts in the interim.
Gfinity (LON:GFIN) is a world leader in the fast-growing market for esports. The company designs, develops and delivers full end-to-end esports solutions. This includes bespoke content, tournament and event solutions for commercial partners via the company’s proprietary online platform, live broadc
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
Companies: IQE SDY SUN ERGO NETD G4M GFIN ULS FUTR
The Court of Appeal yesterday issued judgment “comprehensively” in favour of property portal owner OnTheMarket’ssubsidiary, Agents' Mutual, regarding all the competition issues in its legal proceedings against Gascoigne Halman, part of the Connells estate agent chain. While the non-competition issues relating to OTM’s claim remain to be resolved, we see this as a positive in terms of investor sentiment and allows senior management to focus more on the delivery of its growth strategy.
This morning OnTheMarket (“OTM”) management confirmed that “as of 31 January 2019, it has listing agreements with UK estate and letting agents with more than 12,500 branches. This is an increase of more than 7,000 branches in just under a year since Admission to AIM in February 2018.”
Bonhill reported a maiden profit in the nine months to December 2018 and results ahead of expectations driven by a record performance from InvestmentNews. The company is now seeking to acquire Last Word Media, a highly complementary UKbased B2B media businessserving the global asset management industry, for initial consideration of £8.0m (cash & shares). To fund the acquisition, the group is raising £10.0m (gross) via a placing of new shares at 84p per share. Pro-forma forecasts have been included below. We have increased our TP to 128p (107p).Buy.
Companies: Bonhill Group
With its turnaround phase now complete, and with a new management team in place the Group is well placed to focus on its strategy of achieving growth both organically and through acquisitions. The Group has been structured to accommodate for a significant increase in scale without requiring material increases in core fixed costs. This allows for a potentially rapid improvement in profitability. We maintain our BUY recommendation.
Companies: Dods Group
Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.
Companies: OPM ALU ANCR BLV CONN CRC STU GATC HAT LEK MMH MCB MWE NXR NTBR NOG PAF PEG RFX SRC TEF TEG TPT VTU WYN XLM
Cash is currently £8.5m (31 May 2019: £10.2m; 31 January 2019: £15.7m); Progress converting free-of-charge trial agents to paying contracts with over 2,000 signed on an average ARPA of £297/month and 46% on long-term contracts of 3 or 5 years with shares; Launch of new home developers with Barratt Developments plc already contracted on a portal listing and additional products advertising agreement; Agent offices remain over 12,500 and UK residential listings are now approximately 86% of Zoopla’s and 65% of Rightmove’s listings; Record levels of value delivered to advertisers with visits in September expected to exceed the 25.4m achieved in May 2019;
The H1 trading update from Gfinity, the leading international esports business, demonstrates further progress in the refocusing on a Strategic Client Management model where Gfinity acts as the trusted independent partner to games publishers, sports rights holders, brands and media companies in the development and delivery of their esports strategies. Gfinity is reallocating resources towards its community, consulting and content creation streams to supplement delivery of end-to-end esports programmes. As part of this, the Company has taken the decision not to progress a material opportunity for a new contract with a customer where it has recently completed a major project. This results in a significant reduction in FY20 revenue forecasts but improved mix and ongoing cost control means that adj. EBITDA loss actually reduces. We have also reduced our revenue growth assumption for FY21 and now expect that Gfinity will move into EBITDA profit in H2 FY21. This change has implications on our cash forecasts however we note the company is in discussions with several potential strategic investorsthat would create new opportunities for the Group.
YouGov’s H1 trading update confirms that the group is on track to meet management expectations for the year and our forecasts are unchanged. Data Products remains the driving force behind the overall progress, with the US and the UK markets highlighted, despite these markets being the longer-established in the group. Management’s five-year plan to FY23 targets doubling both revenue and adjusted operating profit margin, as well as achieving a 30% CAGR in EPS (25% EPS CAGR in the earlier plan). In this context, the valuation premium to slower-growing peers looks well underpinned.