Hybridan Small Cap Feast 11-11-2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Long Term Assets Limited (LTA), a Guernsey investment company, intends to join the Specialist Fund Segment of the Main Market of the London Stock Exchange. The initial portfolio is made up of a diversified range of assets, recently valued in the region of £160m, comprising a complete selection of the Disruptive Capital’s family office private asset portfolio. LTA aspires to be a “best-in-cl

Return to profit anticipated in Q1’23 after FY22 loss

Driver has issued a full year update, which confirms an adj. loss before tax of £0.3m for FY22 (H1 profit of £0.4m, H2 loss of £0.7m). Management has implemented a significant reorganisation in the Middle East and APAC, with further significant cost saving plans implemented. This should leave the business on a more stable footing, with management anticipating a return to profit in Q1 FY23, with further performance enhancements expected in Q2. A strong balance sheet, with net cash of £4.8m at Sep

A sturdier foundation, with positive momentum

Management has undertaken a significant rationalisation programme, successfully commissioned new ERP software, and explored means of reducing central costs to place the Group on a sounder footing moving forward, following an extremely challenging FY22 for Driver Group. The actions are paying off, with Q1 ’23 moving into profit, with further progress anticipated from Q2 onwards. While it is difficult to assess the valuation of a business with no published estimates, what is very clear is the dir

Inflexion point

Driver Group is reaching an inflexion point as it looks to focus operations on the more profitable and less risky geographical regions. Following the H1 period end, management transferred 25 staff in the UAE and Malaysia and several contracts to an unnamed Counterparty in exchange for an advance payment of trade receivables (£2m) and help to collect further monies owed to the Group. As measured by adj. PBT, the interim results were in the middle of the guidance range. We think the resulting red

H1 PBT in line; Restructuring drives improved outlook

Driver’s interim results report revenue of £24.4m (H1’21: £25.0m) and adj. PBT of £0.4m (H1’21: £1.0m). This is a creditable performance against a challenging market backdrop, with the legacy effects of COVID-19, and the impact of the war in Ukraine on some of Driver’s clients and their counterparties. Europe & Americas continued to trade very profitably, offsetting losses in the Middle East and APAC. Post period end, the Group issued an update on its Middle East operations, in particular the UA

An elegant solution

The decision to transfer the bulk of Driver Group’s UAE office to a Counterparty solves an ongoing cash collection issue and saves on exceptional (and cash heavy) costs at the same time: a masterstroke in our opinion. The level of cost savings will be a multiple of previous expectations, with improved cash flow, profitability, and higher consultant utilisation levels in Europe another positive side effect. This elegant solution gives confidence in the strength of leadership now in situ within th

Hybridan Small Cap Feast 23/05/22

Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Psych Capital PLC, intends to list on the AQSE Growth Market. Psych operates the Psych Platform (a business-to-business networking platform), that is developing the Blossom Database pursuant to a third party licensing arrangement. The Company also has an investment of 426,000 common shares in Awakn, a Canadian NEO Exchange listed psychedelics research and clinical group, with operations in the UK and Europe.

Middle East exposure materially de-risked

Driver Group has issued a positive update on its Middle East operations, in particular the UAE. It has agreed with an unnamed counterparty that 25 employees will transfer to the counterparty on 1st June, resulting in annualised cost savings of >£3m, with no associated exceptional termination costs. This compares to the £1m in cost savings identified within the 29th March update. The counterparty will also assist in collecting the associated debtor book of c.£3.5m, c.£2m of which it will pay upfr

A strengthening of the Board

Driver Group is currently part way through a rationalisation of its Middle Eastern and APAC businesses, following losses generated in the regions during H1 ’22. The combination of the new CFO announced, Charlotte Parsons, and the commissioning of a new ERP software will result in more timely reporting procedures and improved management information. Charlotte has extensive experience within the consulting sector and providing high-level strategic and change management advice to several Boards. W

Fix Underway

With plans in place to review the Middle East and APAC regions, the trading update suggests that management were taken by surprise. The rationalisation process is likely to be more severe than originally anticipated, potentially including an overhaul of reporting procedures. We expect the focus to turn to gross margins, cash collection and higher utilisation levels – involving headcount reductions, office closures, and a focus on higher quality customers. The likely scale of the required action

Q2 impacted by poor Middle East/APAC performance

Driver has issued an H1 trading update, which highlights that trading is substantially below expectations, with the Group achieving adj. PBT of £0.3m-£0.5m in H1 vs. £1.0m in the prior year and a previous full year expectation of £2.7m. It attributes the underperformance to an unexpected drop in activity levels in the Middle East and a problematic, loss-making contract in APAC. Europe & Americas continues to perform consistently. Given the inconsistent performance of both the Middle East and APA

Forecasting a strong earnings recovery despite soft Q1

FY21 results were delayed due to seeking reassurances over an investigation into its principle customer’s operations in Oman. These assurances have been sought and the results confirm adj. PBT of £2.0m, in line with expectations and as flagged in the October update. Net cash of £6.5m is also in line with that flagged in the update. After a material improvement in activity levels during Q4, Q1 softened. Despite this, a material improvement in earnings performance is expected in the current year.

Reasons for optimism

Despite the delay, the results for the year to September were in-line with expectations at the adj. PBT level, with the level of dividend doubling y-o-y. The latter highlights the Board’s confidence in improved trading in H2 2022 and the levels of net cash. Q4 ‘21 enjoyed a pick-up in activity levels, which continued into the first two months of the new year, albeit disrupted briefly by Covid in December. With costs at a multi-year low, a rising number of fee earners operating in the added-value

Terminating coverage

Strong finish to 2022, upgrade to 2023

Somero Enterprises - Year-end trading update – slightly lower than expectations

The update reflects some slight customer supply chain constraints, with the resultant FY revenue and EBITDA slightly down on previous guidance. Underlying market demand remains positive with expected backlogs. Strong growth was again recorded by Europe (+20%) and Australia (+40%). We reduce our revenue for FY22 by 3.5% with a 3.7% reduction in Adj EPS. Lower net cash of $34.0m is also reflected in dividends, which we reduce by 22% to 37.5ȼ. The growth story remains strong with international grow

QuotedData’s Real Estate Monthly Roundup – January 2023

Performance - 2022 ended with another difficult month for property companies as the sector continues to get to grips with the impact of higher interest rates. There were several funds that performed well during December, however, with secondary shopping centre landlord Capital & Regional top of the pile. For a second month on the trot Home REIT saw its share price tank after it came under attack from a short seller in November. Valuation moves - It was a mixed bag for valuations, with six-month

This Week's AIM Highlights 20th January 2023

LIBERUM: SigmaRoc* - Good start to 2023 with strong pipeline

LIBERUM: Yü Group* - Yet more upgrades

Strix (KETL LN) - Full year trading update

Strix have issued a full year trading update indicating profit after tax will be c. £23.0m, in line with updated guidance provided in the 30 November 2022 trading update following completion of the Billi acquisition. Year-end net debt came in at £87.0m, slightly ahead of Zeus forecasts, leaving the company well placed to bring net debt / EBITDA materially below 2.0x during FY23. Profitability being in line provides confidence that the Zeus FY22 revenue forecast of £110.0m will be achieved, imply

Q4 & FY22 Trading Update

Capital Limited (LSE: CAPD) this morning provided its Q4 & FY2022 trading update. The Company has continued to perform strongly in 2022 with Q4 revenue 8.2% higher QoQ and 18.9% higher YoY. The full year of revenue has once again exceeded the revised guidance (albeit marginally) and our estimates.

ITM Power - A Major Reset

ITM’s new CEO has outlined a major reset for the company focused on transforming it into a volume manufacturer of market leading electrolyser technology. Getting there will involve a lot of work and cost and today’s revised guidance shows a near doubling of EBITDA loss against the original consensus for FY23. FY 24 should start to see the benefit of cost cutting and the company has also announced two new 100MW contracts announced today with Linde. Importantly, ITM has the cash reserves to suppor

ITM Power (ITM LN) - H1 FY 2023 results

ITM has released its H1 results to the end of October 2022, alongside providing an update on the company’s strategy under its new CEO. The statement is something of a curate’s egg, showing an expectation of poor FY 2023 financial performance (as previously flagged), but also a new strategy focused on manufacturing scale-up, and signature of two new 100MW contracts.

Hybridan Small Cap Feast - 25 Jan 23

25 January 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 object

SHORE CAPITAL - Ultimate Products+ (UPGS) - House Stock, 170p - Returning to Ambiente - a commercial opportunity

Morning Note – 31 January 2023

Hybridan Small Cap Feast - 17 Jan 23

17 January 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 object