Zeus Industrials Round-Up - 13 September 2024

The UK industrial sector continues to show promising signs of recovery, with manufacturing PMI reaching a 26-month high of 52.5 in August as all survey indicators but one expanded. Economic data has also been encouraging, with UK pay growth cooling to a two-year low and inflation rising only slightly in July – supporting the case for further interest rate cuts this year by the BoE.

Gooch & Housego (GHH LN) - Plenty of opportunity but execution must improve

Gooch has issued a profit warning, cutting FY24E guidance at PBT by £1.5m or c.16% against Zeus’ estimate. Revenue recognition for certain customer projects has been delayed due to supplier and customer issues outside of the Group’s control. Many other things seem to be going well. The order book is higher, acquisition integration has continued apace, progress to reduce costs via outsourcing is being made, and net debt is lower. We cut our FY24E estimates in line with new guidance. Despite manag

Hybridan Small Cap Feast - 15 August 2024

15th August 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, or it is a rumour Dish of the day Admissions: None Delistings: Tertre Rouge Assets Plc (TRA.L) has delisted from the Standard Segment of the Main Market. What’s baking in the oven? ** Reverse Takeovers: Earnz plc (EARN.L) is an AIM Rule 15 cash shell, which is required to make an acquisition or

Morning Note – 15 August 2024

Gooch & Housego - Slight H2 24 sales delay results in EPS down 15.6%

The group signals a levelling out of the earlier destocking effects and a maintained outlook for FY25, with an increase in H2 output seen. However, some H2 supplier and customer delays results in some revenue slipping into FY25 with a cut to FY24E adj PBT of £1.5m, and a 15.6% EPS reduction. Good progress is being delivered to its strategic plan to raise margins to mid-teens levels and the integration of Artemis and GS Optics is going well. The reduction to FY24 expectations is a frustrating gli

Zeus Industrials Round-up - 14 August 2024

In a volatile period for stock markets, the UK industrial sector has continued its steady improved performance. Manufacturing PMI data reached a two-year high of 52.1 in July with optimism reaching the second-highest level in the survey this year. Inflation remained at 2.0% in June which, coupled with promising labour market data, led the MPC to reduce the base rate by 25bps to 5.0%. Although challenges such as supply chain disruption and economic volatility still remain, the sector’s improving

Gooch & Housego (GHH LN) - Progress being made but more to do

Gooch has reported in-line first half earnings. Trading has started to recover with stock levels normalising at industrial and medical devices customers.

Hybridan Small Cap Feast - 04 June 24

4th June 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, or it is a rumour Dish of the day Admissions: Delistings: Apollon Formularies (AQSE:APOL) has withdrawn from the Aquis Stock Exchange What’s baking in the oven? ** Potential**** Initial Public Offerings: ITF announced: 22nd May: Raspberry Pi announces an intention to float onto the Premium listing

Morning Note – 4 June 2024

Gooch & Housego - Interim results – No change to FY24 expectations

Interims confirm that trading remains in-line with FY expectations. A weaker trading period had been flagged due to some customer destocking. A stronger profit weighting to H2 is expected supported by strong order visibility, an end to the destocking phase and the positive effects of recent management actions. No change to forecasts or our conservative 680p target price that offers 20% upside as management actions progressively restore growth and margins, which will under write scope for a valua

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

Morning Note – 4 April 2024

Morning Note – 19 March 2024

Gooch & Housego - Disposal of Boston A&D unit to focus on core strengths

The group has announced an important step forward in its stated strategy to focus on its core competencies by the disposal of its loss-making A&D operation in Boston for total consideration of up to £9.4m. The group remains committed to its added value growth A&D operations, and this is further evidence of management action to restore margins. The disposal results in modest EPS accretion, improving margins and reducing debt. We look forward to further positive management action in due course and

AFC Energy (AFC LN) - Unlocking value from AFC’s ammonia cracker technology

AFC Energy has announced the launch of Hyamtec Limited (“Hyamtec”), a wholly owned subsidiary established to commercialise the Group’s next-generation distributed ammonia cracking business. The aim of this technology is to support low-cost, scalable, and on-demand hydrogen production for industrial and mobile applications. As a subsidiary of AFC, Hyamtec will have increased flexibility in seeking funding for its growth and offer investors more focused exposure to this cracker technology. We beli

Tandem Group - Interim results

Trading conditions remained challenging for Tandem in H1/24, with ongoing macroeconomic headwinds, elevated freight costs and a shift in retailers’ buying habits all having an impact on the business. Nevertheless, Tandem was able to deliver a robust performance, maintaining flat revenue YoY, with an improved margin that helped narrow the adj. EBITDA loss to £0.2m (H1/23A: £0.7m loss). Tandem’s results tend to be H2 weighted (H1/H2 revenue split of 45/55% over recent years), given the importance

Morning Note – 19 September 2024

PANMURE LIBERUM: Science in Sport: All on track - prospects of upgrades building

Portmeirion + (PMP, House Stock at 223p) - Still on track for FY24F

Returning to double digit growth from FY25

Gleeson has delivered a robust FY24 outturn, with adj. PBT of £24.8m (FY23: £31.5m, SCMe: £24.1m). Gleeson Homes delivered a resilient performance whilst Gleeson Land was impacted by planning delays. Looking ahead, demand is expected to strengthen as interest rates continue to reduce, with reservation rates improving to 0.50 in the past 10 weeks (FY24: 0.44, FY23: 0.38). Continued progress in Partnerships (two agreements to date) and a strong pipeline in Gleeson Land enhances this. We forecast a

Self-help & core markets resilience in H1; FY PBT expectations held

H1-24 results as anticipated are weak. We make 5 key points: (1) Tough trading in South Korea masks a resilient performance in the dominant North America / UK territories (+5% cc). (2) South Korea trading has stabilised in Q3 which is sentiment positive. (3) Pro-active cost cutting action bodes well once market conditions improve. (4) Whilst the broad trading environment continues to have challenges, there is no change to FY expectations. (5) The interim DPS has been lowered, but this reflects a

Surface Transforms (SCE): Pre-close trading, AGM and prospects

SCE is delivering its £390m order book but still faces headwinds. It is knocking down the obstacles, giving detailed explanation of progress, and, indeed, output has been consistently good since late June. Clearly, this is not as early as hoped. We maintain our 2024E sales, but we have reduced several forward profit estimates. This means that we now estimate a £2m gross cash outflow for 2H24, with a stable 2025, and rising 2H25 and thereafter. Significantly, from here, there are now duplicated p

PANMURE LIBERUM: CEO Video: Jonny Watts, Frontier Developments:

Hybridan Small Cap Feast - 16 September 2024

16th September 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, or it is a rumour Dish of the day Admissions: None Delistings: Vector Capital (VCAP.L) has delisted from AIM What’s baking in the oven? Our daily digest of news from UK Small Caps If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”. Hybridan Chefs resea

Hybridan Small Cap Feast - 17 September 2024

17th September 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, or it is a rumour *New product launch* In addition to our Small Cap Feast, which will continue to bring you the latest IPO news and stories across the small cap universe, we will shortly be launching “Friday Takeaway”. This will delve a little deeper on individual companies and focus on non-h

Spectra Systems (SPSY LN) - Sensor contract drives double-digit upgrades

Today’s announcement from SPSY confirming a major new contract with a significant existing central banking customer (partly anticipated in our forecasts) provides further affirmation of the company’s strong technology and close relationships with globally prominent clients. While foreshadowed in earlier announcements, the sensor contract is, however, expected to be considerably more profitable in its totality than previously anticipated. SPSY is an established world leader in providing security

Morning Note – 10 September 2024

Frontier Developments (FDEV LN) - Rollercoaster year

Frontier Developments’ FY24 results to May were broadly in-line with our forecasts for revenue, adjusted EBITDA and gross cash after a comprehensive trading update issued in June. The major Warhammer RTS game release disappointed in the first half, but there was a solid performance from the back catalogue, supported by console ports of old titles and platform subscription deals, leading to a profitable second half. We update model assumptions including revenue per certain titles and edge up FY25

PROGRESSIVE: Sanderson Design Group: Stronger July trading to end H1, driven by North America

Sanderson Design Group (SDG) has announced encouragingly stronger trading in July to complete its H1 performance to 31 July. This has been driven by continued strength in Brand product sales in North America, though the UK market remains challenging, which also impacts on repeat orders within Manufacturing. While Licensing revenues were down on H1 last year, they are in line with group expectations, with the FY25E full-year outturn expected to be similar to last year. The group has made progress