discoverIE Group - Bolt-on Sensing & Connectivity acquisition

discoverIE has made a small bolt-on acquisition within its Sensing & Connectivity division for £5m in cash. CDT, a high-margin business, provides cross-selling opportunities and should support more complex integrated designs within the Contour business cluster. We estimate the deal is earnings accretive, upgrading our underlying EPS forecasts by 1.0% in FY23 and 1.2% in FY24.

discoverIE Group - Strong growth despite market challenges

discoverIE has seen a strong bounce-back in trading after the worst of the COVID pandemic, with organic revenue growth of 18% y-o-y in FY22 and 14% versus FY20 (pre-COVID). The combination of organic growth and recent high-margin acquisitions generated underlying operating profit growth of 34% y-o-y with a margin approaching 11%. Organic order growth of 36% y-o-y has provided a strong order book entering FY23. With FY22 underlying EPS beating our forecasts, we upgrade FY23 and introduce FY24 est

Morning Note – 14 June 2022

discoverIE - Strong growth, rising margins, very well positioned

discoverIE’s focus on the structurally growing markets of renewables, medical, transport and industrial & connectivity has continued to support strong growth. FY 2022 sales were up +25% (organic +18%) and adj. EPS up +31% (+4% ahead of our forecast). Operating margins rose from 10.2% to 10.9%, evidencing rising value-add and the group’s ability to pass on the impact of inflation and supply chain issues. discoverIE’s components are essential to customer projects but generally only represent a sma

discoverIE Group - Entering FY23 in a strong position

discoverIE continued to see strong order intake and sales in the remaining two months of FY22, closing the year ahead of board expectations. FY22 revenue grew 25% y-o-y and on an organic basis, revenue grew 17% and orders by 36%, to end the year with a record order book. We have upgraded our underlying EPS forecasts by 4.0% for FY22 and 2.5% for FY23.

Morning Note – 14 April 2022

discoverIE - Ahead of expectations, EPS upgraded +5%

discoverIE has detailed that strong trading has continued through to its March year end, evidencing again the group’s ability to deal successfully with the industry-wide supply chain challenges. Despite semiconductor shortages delaying sales in two of the group’s twenty businesses, reported sales are up +25% (+28% at CER and +20% organically) and we have upgraded FY 2022E EPS by +5% and FY 2023E +2%. The outlook remains positive with orders well ahead of sales, up organically by +36% on last yea

discoverIE Group - Continued order strength drives upgrades

discoverIE’s trading update for the four months to 31 January 2022 confirmed a continuation of the strong trading momentum reported in H122 and management expects FY22 underlying EPS for continuing operations to be ahead of board expectations, despite ongoing supply chain issues. We have upgraded our underlying diluted EPS forecasts by 4% in FY22 and 2% in FY23.

Morning Note – 9 February 2022

discoverIE - Trading ahead, with order book up +65% organically

discoverIE has detailed that trading in the four months to January 2022 has been strong with a further strengthening of the order book. Consequently, the Group expects to be ahead of full-year expectations, despite ongoing supply chain headwinds, and we have upgraded FY 2022E EPS by 4% and FY 2023E by +2%. Sales in the four months to January were up 34% (organic +20%), an acceleration in the +24% (organic +15%) seen in H1. The order book at 31 January 2022 was at a record level of £216m, over 65

discoverIE Group - Record order book drives upgrades

discoverIE reported strong organic growth in H122, up 8% compared to pre-COVID H120, and the underlying operating margin increased 0.8pp y-o-y to 10.3%. With the disposal of the distribution business agreed, the group is now solely focused on its design and manufacturing business and has revised key strategic targets to reflect this. Through its focus on structural growth markets, internationalisation and further higher-margin acquisitions, discoverIE expects to continue to grow the business and

Morning Note – 30 November 2021

discoverIE - Strength of the growth model evidenced again

discoverIE has reported a strong set of H1 results with sales up +21% (+15% organic), operating margins up 0.8ppts and underlying EPS up +37%. The interim dividend has been raised by 6%, with the Board highlighting the strategy can fund sustainable dividend growth and a higher level of investment in acquisitions from internally generated resources. With a £50m inflow in H2 from the disposal of the distribution businesses, acquisition-led upgrades are highly likely to follow, in addition to the 4

AFC Energy (AFC LN) - Kier agreement

AFC has signed an agreement with another leading UK construction/infrastructure player, this time in Kier Group. We believe this further endorses our long term thesis that AFC will play an active role in encouraging the transition away from diesel-fuelled temporary power solutions. We believe its technology could help the sector make clear strides towards a net zero future, which has to commence now if they are to reach this target by 2045. The share price has been weak of late (in line with man

AFC Energy (AFC LN) - A year of deployment

Interim results from AFC contain few surprises and the group remains on track for the full year. The two main deltas versus our (unpublished) forecast were that the £2m stage payment from ABB were treated as deferred income rather than as revenue and that income from R&D tax credits was below our estimate. The first issue is an accounting issue which has no bearing on cash flow, while the second is likely a timing issue. On its own, the tax issue explains why period end cash, at £48.6m, was £1m

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

Morning Note – 6 July 2022

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

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.

Surface Transforms (SCE LN) - Trading update: profitability guidance reaffirmed

Following the brief but positive AGM statement last week, Surface has issued a fuller pre-close trading update for the half year. H1 revenue increased by 240% to £2.9m; at the upper end of our forecast expectations (i.e., £2.5m-£3m). Gross cash was £6.7m against our estimate for approximately £6m. OEM 8, the Group’s largest customer, is now in full production following a small delay in vehicle start-of-production. Delayed sales have been offset by higher development revenue from other new custom

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

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

Hybridan Small Cap Feast 06/07/2022

Dish of the day Joiners: LifeSafe Holdings (LIFS.L) joins AIM. The fire safety technology business with innovative fire safety products, has developed what the Directors believe to be market disrupting, eco-friendly fire safety protection products to both protect (via fire extinguishers) and detect (via carbon monoxide, smoke and heat alarms) fires. The Company raised £3m on Admission. Market Cap approximately £16.6m. Leavers: No leavers today. What’s cooking in the IPO kitchen? Immediate acquis

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.

Inflationary headwinds managed well; encouraging signs in H2

Autins has reported its interim results this morning, which reflect underlying market conditions. Positively, while the top line declined 32% or £4.3m, mgmt. have handled the headwinds well and undertaken offsetting actions to contain EBITDA losses to £0.35m, in line with H2’21. Despite the backdrop, AUTG has seen its enquiry pipeline increase by £17m to £31m since the turn of the year, of which £11m is for EV platforms. There are encouraging signs with customers holding record levels of order b

2,000 Home Milestone Achieved

A brief year end update this morning confirms that Gleeson has hit its 2,000 home strategic target during FY22, as planned. This is a considerable achievement, representing a doubling of home sold over the past five years, a period which included the COVID pandemic. We make no changes to forecasts this morning, with a more detailed update due on 11th July. Against a sector that has de-rated materially, we note that Gleeson has particularly underperformed peers over the past month and its previou

Cenkos: CAP-XX Ltd -FY22 Trading in line

CAP-XX has announced that revenues and adjusted EBITDA for the year ended 30 June 2022 are, subject to clearance by CAP-XX's independent auditors, expected to be in line with current market expectations. Product sales are up 39% by value on the previous year and total revenue up 31% on the previous year at A$5.6m (CNKS forecast A$5.8m). Adjusted EBITDA is expected to be a loss of (A$0.7m) (CNKS forecast (CNKS A$1.3m net of legal fees), after excluding A$2.4m in legal fees associated with the AV