LIBERUM: Frontier Developments: Positive signs; new games remain key

Frontier Developments (FDEV LN) - Full year guidance confirmed

Frontier’s interims show a positive result from its back catalogue titles but disappointing performance from new releases, as already flagged in its November 2023 trading update.

LIBERUM: Frontier Developments: The change begins

Zeus: Video Games Sector Quarterly review - January 2024

Subsector price performance: In the fourth quarter to 29 December 2023 all but the AAA publishers and platform subsector saw share price declines. The UK PC and Console focused subsector was again the worst performing subsector (-26.2%) over the quarter and LTM (-70.1%).

LIBERUM: Frontier Developments: Back to basics

Initial Equity Trading Comments - 1 December 2023

Frontier Developments (FDEV LN) - Expect change

Initial sales from the launch of Warhammer Age of Sigmar: Realms of Ruin have underperformed. After several disappointing new releases, the company has decided to reverse its strategy to diversify into adjacent game genres. We believe the increased focus should improve Frontier Development’s efficiency but may also increase its revenue concentration and volatility. The update and strategic change lead us to lower FY24 Adj LBITDA to £13.6m from £9.0m. We now also forecast no revenue growth over t

Hybridan Small Cap Feast - 27/11/23

27th November 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 obj

LIBERUM: Frontier Developments: Warhammer: Soft trading through key period

Frontier Developments (FDEV LN) - Road to recovery

We are encouraged by Frontier Developments' announcement of an Organisational Review. We believe many video games companies inflated their expense bases during 2020 and 2021 and reduced focus on return on investment. Frontier now plans to reduce annual operating costs by up to 20% by the beginning of FY25. Frontier's Organisational Review returns the business' focus to optimising returns, leading us to forecast a recovery in adjusted EBIT margins to 5.3% in FY25 and 9.4% in FY26. We believe the

LIBERUM: Frontier Developments: Review and Realms of Ruin key to improving cash flow in FY25E

Zeus: Video Games Sector Quarterly review - October 2023

Subsector price performance: In the quarter to 30 September 2023, all four subsectors saw mean average share price declines. UK PC and Console focused subsector was again the worst performing (-20.6%).

Frontier Developments (FDEV LN) - FY23 results

Frontier Developments’ results for the year to 31 May 2023 showed a year-on-year decline in revenue of 8.3% and wider than expected operating losses due to non-cash impairment charges and accelerated amortisation of underperforming titles. The Group has tidied its balance sheet and is taking a more prudent approach to game amortisation, which lowers our near-term underlying EBIT forecasts. The company is now refocused on selecting games that better align to its previously successful strategy, wi

Hybridan Small Cap Feast - 13 Sep 23

13th September 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 ob

PROGRESSIVE: Watkin Jones: H1 in-line amid reviving investor appetite

Watkin Jones’s guidance for FY24E is unchanged in its trading update for the first half to 31 March. We maintain our forecasts for the full year and introduce half-year estimates, in line with reiterated guidance that performance will be significantly H2 weighted. The group confirms a continuing gradual recovery in appetite among institutional investors to forward fund its build-to-rent (BTR) and student developments. We believe this should gather pace as the direction of interest rates becomes

Ceres Power Holdings - Strategic partnerships powering growth

Ceres Power Holdings’ innovative technology uses electrolysis to produce green hydrogen and solid oxide fuel cells to generate power. In a year where it moved to the Main Market of the London Stock Exchange, it recorded revenue growth of 13% and gross margin expansion to 61% (the highest in the sector, according to management), but is yet to record an operating profit (FY23 operating loss of £59.4m versus £54.0m in FY22). Ceres continued its strategy to drive innovation and technology across sol

PROGRESSIVE: Sanderson Design Group: Strategic growth drivers show their value in challenging trading conditions

Sanderson Design Group (SDG) has announced its FY24 full-year results, which are in line with the headline figures from its February trading update. A record year for Licensing and a strong performance in the key North America market helped to offset a challenging consumer environment in other geographies, most notably the UK. While this backdrop is set to persist in FY25E, the group will continue to focus on its strategic growth drivers, notably North America and Licensing, to deliver sharehold

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

Hybridan Small Cap Feast - 25 April 2024

25th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: Smart Metering Systems (SMS.L) has delisted from the AIM market What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar

Gooch & Housego (GHH LN) - A chink of light

Gooch has issued a positive update for H1. Trading has started to recover with stocking levels normalising at industrial and medical devices customers. The outlook is positive with growth returning, and management has confirmed our full year estimates (adjusted for the disposal of EM4). The order book and order flow appear healthy, and net debt is comfortable. Gooch clearly still has plenty to do to lift operating margins from a lacklustre 8.1%, but the transformation plan appears to be back on

Surface Transforms - Fund raise for the profitable growth phase

SCE is raising £16m through a placing (and up to a further £3m through open offer) to fund substantial expansion and additional working capital. This will enable the Group to grow to £75m revenue capacity in the near term, commence the build and equipping of a new factory and then (with internally generated free cash flow) scale to £150m revenue capacity and beyond. With a contracted order book of £190m and a prospective pipeline of £400m, this is clearly the time to seize the opportunity. The e

Surface Transforms - New guidance – forecasts under review

Surface Transforms has issued new revenue guidance for FY24, with the company now expecting revenues in the range £17.5-22m. We are withdrawing our previous forecasts for FY24 and withdrawing our price target while we review the impact of the new guidance.

Solid State - Anticipating record adjusted PBT in FY24

Solid State’s trading update affirms the sustained strength in demand throughout H224, resulting in record FY24 revenue and adjusted PBT ahead of prior consensus of £155m and £12.5m, respectively. This is attributable to the earlier-than-expected delivery of a NATO contract. As a result, consensus FY24 revenue and adjusted PBT estimates have been raised by c 6% and c 20%, with respective FY25 estimates declining commensurately.

Time to focus on growth ambitions

AKA: Initiating Coverage of a.k.a. Brands with Buy and $14 PT: Upside Ahead

We are initiating coverage of a.k.a. Brands Holding Corp. ("a.k.a. Brands" or the "company"), a leading owner of primarily online apparel-based brands focused on Generation Z and Millennial consumers, with a Buy rating and $14.00 price target, or 10.9X our 2025 EBITDA projection of $20.2 million. The company's brands include: 1) Princess Polly, focusing on 15 to 25 year-old women; 2) Petal & Pup, which offers feminine styles for 25 to 34 year-old women; 3) Culture Kings, a street wear destinatio

Hybridan Small Cap Feast - 14 Mar 2024

Banquet Buffet*** Abingdon Health 9.25p £11.3m (ABDX.L) The lateral flow contract development and manufacturing organisation announces its unaudited interim results for the six months ended 31 December 2023. Revenue increased 117% to £2.4m (H1 2023: £1.1m). The Adjusted EBITDA loss decreased 47% to £1.2m (H1 2023: £2.2m). Furthermore, reduction in operating loss of 50% to £1.2m (H1 2023: £2.4m). The Board therefore expects that H2 2024 revenue will be significantly improved compared with H1 2024

AFC Energy (AFC LN) - First modular ammonia cracker system

AFC has unveiled a groundbreaking modular ammonia cracker system demonstrating viable and scaleable production of hydrogen in the UK using this method. The cracker system is designed to deliver 140 tonnes of fuel cell grade hydrogen each year. Hydrogen from the plant will initially be targeted for sale into AFC’s UK H-Power Generator deployments, including those with Speedy Hydrogen Solutions. Along with the recent purchase of the mobile storage and distribution assets of Octopus Hydrogen, AFC c

PROGRESSIVE: Sanderson Design Group: Delivering to strategy against an unhelpful global backdrop

Sanderson Design Group (SDG) continues to deliver on its key strategic initiatives and growth drivers despite a challenging global backdrop. The group’s FY23 performance showed flat revenue, with adjusted underlying PBT rising £0.1m to £12.6m. Net cash dropped back to £15.4m, with the total dividend maintained at 3.5p. The star performers were Licensing (reported revenue +25%), the Morris & Co brand (+16%) and the US market (+20%). Our forecast revisions assume more modest sales progression, wit

Morning Note – 4 April 2024