Morning Note – 7 June 2022

Gooch & Housego - Stronger H2 expected after H1 weakness – forecast unchanged

Interim results signal no changes to full-year expectations. The first half saw macro-economic challenges; although GHH coped well with rising costs due to previous restructuring and efficiencies taken, COVID-related challenges resulted in customer delays and component supply disruptions. A&D saw lower volumes due to these issues but is expected to have a stronger H2 supported by a strong order book. Industrial saw good growth in industrial lasers and semiconductor activity. No change to trading

Morning Note – 5 April 2022

Gooch & Housego - Half-year output constrained, but with a record order book

The group’s half-year update highlighted that it is seeing robust levels of demand across all its businesses, with a recent recovery also now coming through at A&D. This results in a record order book, which has grown by 25.6% in CER terms to £119.9m. However, first half output has been constrained by supply chain challenges, as previously identified, COVID-related absences and some shortages of high skilled labour. COVID-related staff absences have affected UK output recently. The group now exp

Morning Note – 23 February 2022

Gooch & Housego - Record order book; trading in line with expectations

The group’s AGM trading update signals that demand in the first four months of its financial year has been strong and improving. Some COVID-related issues have continued to affect some areas of the business. While mitigating actions have been taken, management now expects trading to be slightly more H2 weighted, with guidance unchanged for FY22. Trading conditions remain robust in a number of end markets such as hi-reliability fibre couples, industrial lasers and medical lasers, while the order

Morning Note – 30 November 2021

Gooch & Housego - FY results ahead of expectations, recovery on track

FY results were ahead of expectations, with a strong closing month. It has seen a strong recovery in nearly all its end markets, with some internal efficiency benefits gained and exceeding some currency headwinds and supply chain challenges. No change to forecasts with recovery expected to continue, underwritten by a growing order book, and management is cautiously positive. Our price target remains 1450p, offering upside after its recent underperformance.

Morning Note – 5 October 2021

Gooch & Housego - Year-end trading update – slightly ahead of expectations

The group has provided a positive year-end trading update, pointing to trading being slightly ahead of existing expectations. Gooch & Housego has seen a good recovery in underlying market activity, although the update indicates some supply-chain constraints and currency headwinds. We increase our FY21 EPS by 2.5% to 37.3p, but maintain our existing expectations for FY22. We also retain our 1450p price target with today’s update helping sentiment.

Morning Note – 1 June 2021

Gooch & Housego - Interim results, in line with underlying market recovery

Interims were in line with expectations, with most areas showing decent recovery over recent months and existing underlying market trends continuing, although noting currency headwinds. We raise our FY21 EPS forecasts by 4.4% and by 7.7% in FY22, thus prompting us to increase our price target from 1355p to 1450p, maintaining existing target multiples. The shares premium rating is well-deserved and the recovery in trading momentum is assisted by restructuring benefits.

Morning Note – 7 April 2021

Gooch & Housego - Half-year update – trading in line, momentum improving

The group’s half-year trading update points to trading in line with expectations, with evidence of trading impetus improving across most markets. The various industrial laser markets are now more clearly in recovery mode driven by Asia, with the US and European markets now also gaining momentum. Additional A&D contracts and robust medical diagnostics demand have also been positive. Some logistical and remaining COVID-19-related stickiness in the supply chain has been seen but is expected to impr

Small Cap Feast

Parsley Box, the direct to consumer provider of ready meals to the 60+ demographic, recently announced its AIM IPO plans. Parsley Box provides ready meals, which are not required to be stored in a fridge or freezer, have a shelf life of up to six months and are cooked in minutes. The company reported revenue of £24.4m for the financial year ended 31 December 2020 (unaudited). Deal details TBC and admission is expected to occur late March/ early April 2021. Caerus Mineral Resources, a London base

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

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.

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

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

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

Small Cap Feast

Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation £20m raising c. £8m “to finalise the development and launch

AFC Energy (AFC LN) - Feedback post Capital Markets Event

AFC Energy hosted its maiden Capital Markets Event yesterday, giving an excellent summary of its progress in the last year and its prospects. The company is making good progress in commercialising its EV charging product alongside ABB and should be ready for market in 2022. We believe the long-term prospects for the company remain exciting.

Shoe Zone PLC (SHOE LN) - FY21 expectations upgraded

Shoe Zone is upgrading FY21E Adjusted PBT expectations to £8.0m, a 22.7% upgrade to our previously published forecast of £6.5m, following initial work done as part of the ongoing yearend review process. The benefit of this upgrade also flows through to FY23E where we increase our forecasts by the same quantum. Despite the recent share price rally, we continue to believe Shoe Zone trades at a deep discount to its fair value, with a return to the dividend list anticipated in the current financial

Solid State (SOLI) - Interims – record period despite supply chain challenges; EPS estimates unchanged

Solid State is a specialist value added component supplier and design-in manufacturer of computing, power and communications products. Interim results this morning read well, illustrating both a record six-month period, including very strong performances from both Willow Technologies and Active Silicon acquisitions, and an order book as at 30 November standing at a record £70.3m. While global supply chain challenges will continue to need to be successfully managed, the Board remains confident of