Beximco Pharma (BXP.L*): Plans to begin producing remdesivir (Source: Reuters) | Microsaic Systems (MSYS.L): COVID-19 update | Creo Medical (CREO.L): Final results for the 12 months ended 31 December 2019
Companies: BXP MSYS CREO
Microsaic has provided an update on the business during the Covid-19 pandemic and cash conservation measures that have been installed. Covid-19 is expected to impact near-term performance with the company’s distribution and OEM channels unable to operate normally due to lockdown restrictions. As a result, revenues are anticipated to be lower than expected, although forward visibility remains poor at this stage. Microsaic has announced cash preservation measures to offset lower revenues including a pay reduction of 20% for all employees and directors, and furloughing back office staff. The Board believe the impact on cash is ‘effectively’ neutral, and indicate cash runway up to YE 2020. Despite lockdown restrictions, Microsaic continues to makes positive progress with its existing and potential partners. In this rapidly evolving environment, we note that ProteinID could stand to benefit from the regulatory requirement for a point-of-need online bioprocessing monitoring instrument in the manufacture of Covid-19 biologics and vaccines.
Companies: Microsaic Systems
Abal Group (formerly on AIM) to relist as Supply@Me, a growing innovative "inventory monetisation" platform, having originated more than EUR300m of prospective "inventory monetisation deals" in its first six months of operating (to June 2018). In the first half of 2019, an additional prospective EUR300m was originated. As at the date of the publication of the Prospectus and Circular to Abal shareholders, dated 4 March 2020 , EUR972m of prospective contracts have been originated. Raising £2.2m. Due 23 March.
The Proof Of Trust has announced its intention to list on the Standard Market. The Blockchain based business, owns patents to a protocol which facilitates dispute resolution based upon smart contract disputes. Transaction details TBC.
Companies: LVCG MSYS RED MRL SIM SQZ ORPH VLG LID SQZ
Microsiac Systems (MSYS.L): Final results for 2019 | Open Orphan (ORPH.L): Development of coronavirus challenge model
Companies: Microsaic Systems Open Orphan
This morning Microsaic has published its FY’19 final results and are in-line with management expectations. Results were largely pre-flagged at the trading update in January, with the company reporting £872k of revenue, a £2.78m loss after tax and a cash position of £2.62m. The company has matured a lot over the last year, with total revenue up 50% YoY, four new commercial agreements (five including the recent Axcend deal in February) giving global presence, the launch of the award-winning ProteinID bioprocessing platform, and the establishment of a direct European sales force. We believe its differentiated technology is increasingly being recognised, as evidenced by the company’s progress in signing new global partners, and we remain excited by the opportunity of the company’s miniaturised point-of-need mass spectroscopy technology in both the traditional and the wider bioprocessing markets. We continue to view ProteinID as a medium-term growth driver targeting a total addressable market of $390m, and expect data publications and/or OEM agreements in 2020 will support this offering. Longer term, the triple quad technology offers an exciting opportunity for upside as a point-of-need MS instrument in the diagnostic, environmental and bioprocessing markets. Lastly in the annual report, management disclosed it is exploring financing options to ensure it is sufficiently capitalised to commercialise its products and seize the substantial total addressable market available.
FRP Advisory Group, UK professional services firm specialising in restructuring advisory. Raising £80m (£20m primary). Expected market cap £190m. Compound annual growth of 16.4 per cent. in revenue and 10.9 per cent. in operating profit since the beginning of FY17.o Strong average EBITDA margins of 51 per cent. over FY17 to FY19, and consistently strong cash conversion
Inspecs, a UK designer, manufacturer and distributor of eyewear frames to global retail chains announces its intention to IPO onto AIM raising £94m with a market cap of £138m. Admission expected 27th February. FY Dec 2018 numbers show revenue of $57m and underlying EBITDA of $11m
Companies: REAT KRPZ POS FKE ZEG RBD EDR JAN MSYS SYM
Microsaic Systems (MSYS.L): Commercialisation agreement with Axcend Corp
Todays’ announced collaboration and joint commercialisation agreement is an important step in the new strategy for Microsaic adding a new OEM product and gaining access to Axcend’s direct sales force in the US. The deal also highlights the added advantage Microsaic’s new direct sales force in the UK and Europe can have in facilitating OEM agreements and gaining a more global footprint. The two technologies is highly complementary, combining Axcend’s leading portable Liquid chromatography (LC) system with Microsaic’s compact mass spectroscopy (MS) detector, and the analytical technologies are used together often. It is touted the total addressable market for LC/MS combined systems is worth $5bn today1. However, the combined LC/MS system will be the first of its kind to be used at the point of need of sampling rather than in a central laboratory, whilst simultaneously promising powerful analytics and cost and time savings.
Allergy Therapeutics plc (AGY.L): Trading update | Microsaic Systems (MSYS.L): Trading Update | Oxford BioDynamics (OBD.L): EpiSwitch™ used in diagnosis of canine cancer
Companies: AGY MSYS OBD
Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets through its subsidiaries Calvin Capital and Lowri Beck . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale. Expected Admission February 2020 The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m. Due 28 February. Investment firm Nippon Active Value fund is seeking to raise up to £200m at an issue price of 100p per share via an IPO. The company aims to invest in a portfolio of quoted Japanese stocks with market capitalisations of up to $1bn. First day of dealings expected early February.
Companies: PPIX DBOX CLL EME MSYS AURA MYSL THR TEK ECR
Microsaic (MSYS.L): Collaboration with the Centre for Process Innovation (CPI) | Diurnal (DNL.L): Chronocort® MAA submitted for EU approval
Companies: Microsaic Systems Diurnal Group
SulNOx Group - The Group has developed a methodology and process capable of emulsifying hydrocarbon fuels such as diesel and heavy fuel oil . By January 2014, following preliminary laboratory testing, SulNOx was in a position to suggest that its products resulted in up to a 50% reduction of Nitrogen Oxide (NOx) and a 90% reduction in particulate matter Due 17 Dec, mkt cap £42.3m.
Companies: SRES K3C SENS MSYS PTAL RLD TSG FUL BHRD AUTG
Evgen Pharma plc (EVG.L): MoU with University of Dundee | Microsaic Systems plc (MSYS): Japan distribution agreement
Companies: Evgen Pharma Microsaic Systems
Microsaic has announced it has signed a new distribution agreement with ST Japan to distribute the 4500 MiD® mass spectroscopy detector in Japan. Today’s announcement highlights the Group’s growing global presence, continued progress in the small molecule business and industry interest in the Group’s innovative miniaturised MS technology. We have provided an overview of Microsaic highlighting the Group’s sense & sensitivities and progress made to date.
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Strix has released an AGM statement indicating that trading in the early part of the year has been solid, the new financing facilities have been put in place, product development is on track with 14 new products released during the year and the factory move remains on schedule and to budget. The current trading period is an important one and the scheduled trading update 23rd July should provide more colour on the underlying performance as well as the early indications from the new products already released and the outlook for those that are scheduled to be released in H2. The resilience of the Strix business has been reaffirmed during the current situation with financial guidance having been maintained and the final dividend committed to, a 10% increase yoy.
Companies: Strix Group
Despite some initial integration issues with WatBio (since resolved), Filta generated strong organic growth (+16% YoY) and delivered results in line with expectations. Given ongoing uncertainty around the pace at which self-isolation measures will be eased, we maintain our Hold rating, and will look to reinstate forecasts once visibility improves.
Companies: Filta Group
Last month’s update reported +15% LFL sales growth YTD (Feb & March) and also material margin improvement in areas that have received attention. Near-term uncertainty was however flagged, as Covid has impacted project fulfilment. In this context, today’s update is therefore encouraging, as LFL growth has continued through April – meaning +13% LFL sales growth YTD. April benefitted from service and install revenue (as well as recurring, ~£5m pa.). On this basis, CKT is therefore tracking considerably ahead of the company’s ‘bear case’ scenario. Looking ahead we are cautiously optimistic - as while revenue is set to decline in May - CKT mention “customer plans to resume installation projects”, particularly in Healthcare, where opportunities are described as strong. Timing and volume remain hard to predict however. Costs continue to be closely monitored and managed and as evidence, cash remains strong, at £12.8m – only marginally down from 31st March (£13.1m) and £14.3m as at January’s year-end. Prelims now expected 16th June.
TClarke's trading update is refreshingly positive in all key aspects of investors' current COVID fears and hopes. The decision to fully pay the 2019 final dividend sustains income attractiveness (4% yield on the final alone), the avoidance of trading losses in the teeth of the industry lockdown period (after a profitable Q1/20) demonstrates resilience whilst maintenance of net cash balances through April and May illustrate a robustness of cash flows despite reduced activity levels. It has also maintained the order book and has moved quickly to re-structure the cost base ensuring that margin recovery is not entirely dependant upon market improvement. Prudently and we believe reasonably, we are removing all forward forecasts until visibility on revenue recovery and productivity rates into H2/20 become clearer. However, TClarke's operational strengths, financial robustness and cash coverage of dividend in the most testing of circumstances gives us renewed confidence to uphold a Buy recommendation.
FY results ahead due to a waiver of the management bonuses and final dividend is proposed. Current trading is impacted by COVID but there are clear signs of improvement.
In the midst of a crisis, Judges has made what we think is an excellent acquisition in a high growth sector (lithium battery testing). Heath Scientific fits all of Judges’ acquisition criteria and is a business that is well known to management. We think that the current crisis may well throw up more opportunities and, with its strong balance sheet, Judges is well positioned to capitalise on this. FY20E EPS increased by 1.8% and FY21E by 3.2%. DCF based TP raised from 5245p to 5380p. CY21E PE 26.3x. Buy.
Companies: Judges Scientific
Judges Scientific, the group focused on acquiring and developing companies in the scientific instrument sector, has announced the acquisition of UK based ‘Health Scientific Ltd', a world leading maker, and global exporter, of calorimetry instruments. The initial cash consideration equates to £5.3m, with a further £2.0m cash earnout if profits hit £1.22m in 2020. The business generated £4.4m of revenue and an adjusted EBIT of £0.88m (20% EBIT margin) to April 2019, and is expected to have an even stronger year to April 2020, suggesting a ‘6x EBIT takeout multiple' if the earnout target is hit.
CAP-XX Ltd* (CPX.L, 3.1p/£10.1m) | Gfinity plc* (GFIN.L, 1.675p/£12.0m) | MTI Wireless Edge Ltd* (MWE.L, 38.5p/£33.8m) | Newmark Security plc* (NWT.L, 1.05p/£4.9m) | Mirada plc* (MIRA.L, 95.0p/£8.5m)
Companies: CPX GFIN MWE NWT MIRA
Costain has raised £100m of gross proceeds. We reduce FY 20 and 21 FD EPS by 45% and 59% due to the dilution.
Companies: Costain Group
Gateley has issued a solid year end trading update despite inevitable COVID-19 related disruption in the last two months of the year (to 30th April). Revenue for the year will be not less than £108.0m (FY19: £103.5m). As anticipated, the breadth and depth of the Group’s legal and consulting service lines have underpinned a resilient outcome with the transition to remote working going smoothly. Swift action has been taken to mitigate the impact of the pandemic, whilst keeping teams intact to ensure the business is well equipped to take advantage of opportunities that arise as the UK economy moves into and out of recession. As we noted in our Stocks for Unprecedented Times note, Gateley has an exceptional track record, achieving revenue growth every year since 1986. This includes steady growth through the 2000-2001 recession, and a strong year for the business in 2010, demonstrating the Group’s resilience through the economic cycle. We remain of the view that Gateley will emerge strongly from the current crisis and expect to reintroduce forecasts as visibility improves later on in the year.
Trading has recovered from the initial hit from COVID-19, with improving B2B activity adding to strong B2C trends. Revenue has been better than previously expected at both DX Freight and DX Express, with this now running at 10-15% below normal levels for this time of the year, compared with the initial 33% impact at the commencement of the lockdown.
Companies: DX Group
Avation is a lessor of 48 commercial aircraft to a diversified airline client base. Intra-day yesterday, the group announced that, as a result of the present uncertain backdrop caused by COVID-19, the Board had withdrawn from the previously announced strategic review and formal sale process, and that it was no longer in active discussions with any interested parties. The key reasons behind this were 1) the present uncertainty meaning that an attractive valuation was seen as unlikely to be achieved at this present moment in time and 2) the distraction of the process in the day to day operational activities of the business.
Petards supplies advanced security and surveillance systems to the Rail, Defence and Traffic Technology markets. Intra-day yesterday, the group confirmed that its RTS Solutions subsidiary had secured a multi-year renewal agreement for the provision of software support services to one of its major rail customers.
Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning, the group has released full year results to 31 December 2019, alongside providing an update on progress against the present COVID-19 backdrop. In line with the market updates provided in February and April, group revenue in the year increased by 3.2% to £7.1m, whilst revenue from continuing operations, excluding the Onboard business that was disposed of in the year, increased by 7.2% to £6.7m, driven by traction being gained with new products and services. The gross margin in the year increased by 280bps to 53.9% reflecting the greater proportion of software and service income. This resulted in a trading loss after tax before exceptionals of £89k, which post exceptionals of £412k that predominantly related to the disposal of OnBoard, resulted in a loss after tax of £501k. As previously reported, the year-end net cash position stood at £850k, which reflected an increase of £554k in the year; this post £1.1m of new product development expenditure and cash costs associated with the disposal.
Companies: AVAP TST PEG
TP Group's FY19A results were in line with our expectations, with strong organic revenue growth of +16% YoY. Whilst the business remains resilient, with a large net cash position and a record order book, COVID-19 has caused uncertainty around the timing of some pipeline opportunities. Therefore, in line with a number of other companies, TP Group is withdrawing market guidance. We also withdraw our forecasts and place our recommendation Under Review.
Companies: TP Group
Symphony Environmental has reported FY December 2019 results. Whilst the Company did experience a single digit fall in revenues, this has been well trailed in previous announcements, relating to inventory adjustments by some customers waiting for legislative clarification in certain markets. The Company did move into loss making territory (£0.6m at the operating level), but the balance sheet was able to more than adequately absorb this aided by the £1.9m strategic equity investment announced in 2019. Net cash (excluding lease liabilities to compare on a like for like basis post IFRS 16) stood at £0.9m vs. net debt of £0.1m at the corresponding period end.
Companies: Symphony Environmental Technologies
The biggest takeaway from Sureserve Group’s interim result was its strong cash performance in the first half, with net debt falling to £3.5m at end March (£12.9m at end March 2018). This sets a solid base for the group to ride out the disruption of the lockdown. Our focus is on the outlook, with H1 only having eight days of impact from the lockdown. We have reduced our estimates for FY20, with the bulk of the revenue cut from £230m to £210m being a £13m cut in the Energy Services division. The cut to PBT from £9.8m to £9.1m is less severe, reflecting the improving efficiency in the Compliance division and the cost mitigation efforts of the group. With the long-term investment themes of regulatory compliance and energy efficiency likely to stay in focus, we see solid support for the group’s business and our FY21 numbers reflect the start of a bounce back in activity.
Companies: Sureserve Group