Companies: AUG SAVE EZH LVCG ITX EHG WIN APQ SLE
Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019
Argentex a UK-based forex service provider founded in 2011 by its current management team which operates as a Riskless Principal for nonspeculative and forward foreign exchange as structured financial derivatives is looking to join AIM. Offer TBC, expected 25 June
Companies: PTRO FDEV MRL CTP EHG FDP THAL SCLP YCA CGH
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We have completed another refresh of our value style screen, first established as of 12 May 2015. As usual the screen selected the 25 stocks exhibiting the most extreme value characteristics from our universe, and we have chosen 10 stocks to focus on. Since the last refresh, two days before the last general election, which resulted in a hung parliament, the screen has performed a little better than the small-cap index with our focus stocks outperforming by about 500bps. The weighting to UK consumer stocks noted last time detracted from performance, which came as little surprise given our cautious stance, much discussed in our other strategy work this year. One might have expected more consumer exposure in the refreshed screen given this year’s severe underperformance, but it appears forecasts have been similarly downgraded, keeping much of the sector outside our value criteria
Companies: AUG EHG GOAL MMH RTHM SDY TEF VANL
Despite Revenues, up 5% increased investment has hit its bottom line.
Companies: Elegant Hotels Group
Phoenix Global Mining— US Brown field copper play. Expected late June. Offer TBA
Touchstone Exploration— Oil exploration and production company active in the Republic of Trinidad and Tobago. Interests of approximately 90,000 gross acres. Production c. 1,300 boepd. Raising £1.45m. Expected mkt cap £7.5m. Due 26 June.
I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission.
Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission in late June
Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June.
Vordere—RTO targeting German Property. Raising £9m at 17p. Readmission c. 15 June. Residential Secure Income - social housing REIT raising up to £300m Admission due c.12 July.
ScotGems—Admission due 26 June. Seeking £50-£100m. To investing in a diversified portfolio of Small Cap Companies listed on global stock markets
DP Eurasia—Intention to float from the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia . £20m primary raise plus a partial vendor sale.
Film Finances—Sky News reports that ‘movie financing company with credits including the Hollywood hits La La Land and Nocturnal Animals is plotting a blockbuster premiere on the London stock market that will value it at several hundred million pounds.’ Expected ‘during the summer’.
AIB—Intention to float from AIB, Ireland's leading retail and commercial bank . The Minister for Finance intends to sell approximately 25% of the Ordinary Shares of AIB. Valuation range €10.6-€13.3bn. Admission end June.
Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus.
NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June.
Flying Brands (FBDU.L)—Prospectus approved by FCA. RTO of Stone Checker Software, supplier of technology solutions in the field of kidney stone analysis and prevention. Has raised £550k at 3p. Subject to GM on 15 Jun.
Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe
Companies: IRR MNC K3C FUM EHG ENTU PTCM WAND RHL IGAS
Opera Investments –Reverse Takeover of Kibo Mining’s subsidiary Kibo Gold. Raising £1.5m. Expected mkt Cap £6.5m. 23 May.
Eve Sleep— Schedule 1 from the e-commerce focused, direct to consumer European sleep brand. Offer details TBC. Expected Mid May
Velocity Composites—Schedule 1. Manufactures advanced carbon fibre and ancillary material kits (predominantly carbon fibre) for use in the production of aircraft. Mid May admission expected. Offer details TBC.
Shearwater Group—Schedule 1. Acquiring SecureEnvoy for £20m in cash and shares—a provider of multifactor authentication enterprise software solutions. RTO under the AIM rules.
Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission in May.
Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe
ADES International— Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa, seeking raise up to $170m plus vendor sale under a Standard Listing of the Main Market. Admission due May 2017.
Global Ports Holding—Intention to float on Standard List of the Main Market. International cruise ports operator. Seeking $200m+ raise including $75m primary offer. Expected price range 735p to 875p. Mkt cap up to £539m.
Tufton Oceanic Assets– Offer extended to 9 May on specialist funds segment of Main Market to enable investors to complete further due diligence.
Companies: XOP CML MDZ EHG HUR FARN MATD IGP HYR
Global Energy Development (GED.L) — To be renamed Nautilus Marine Services. Schedule 1 from developer and seller of hydrocarbons and related products. Reverse takeover. Raising $10.5m via a convertible. Expected 9 Feb.
Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise.
Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January.
Companies: 7DIG EHG EQLS BRY EVG LTG DOTD VLS NGR PMI
AMBRIAN PLC (AMBR LN) | BEOWULF MINING (BEM LN) | ELEGANT HOTELS GROUP PLC (EHG LN) | ERGOMED PLC (ERGO LN) | EU SUPPLY PLC (EUSP LN) | GRAFENIA PLC (GRA LN) | INLAND HOMES PLC (INL LN) | WEATHERLY INTERNATIONAL (WTI LN) | Milestone Group (MSG LN) | Inland Homes (INL LN)
Companies: ERGO EUSP BEM GRA WTI AMBR INL EHG LWRF CTEA
FastForward Innovations (FFWD.L) | Elegant Hotels (EHG.L) | Nektan (NKTN.L) | Scancell Holdings (SCLP.L) | 4D Pharma (DDDD.L) | Safeland (SAF.L) | Palace Capital (PCA.L) | Image Scan Holdings (IGE.L) | MBL Group (MUBL.L) | 365Agile Group (365.L)
Companies: FFWD EHG NKTN SCLP DDDD SAF PCA 365 MUBL IGE
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G4M’s H1 trading update confirms the continued strength of the top line sales growth already disclosed in its Q1 sales update. H1 sales have risen by an impressive 42% to £70.2m, complemented by gross margin expansion of 330bps to 28.5%, reflecting G4M’s focus on profitable sales growth. This translates to gross profit growth of £7.5m (+60%) compared with last year and will deliver interim financial results materially higher than last year. While sales momentum has continued into October, management remains mindful of the ongoing uncertainties around Covid-19 and Brexit heading into the peak trading period. With market estimates already raised on the Q1 update, this prudent caution tempers our full year PBT upgrade to 13%.
Companies: Gear4music (Holdings) PLC
REACT Group plc (REACT), the specialists in deep cleaning services for customers in the public and private sectors, has announced an encouragingly positive trading update for the financial year to September 2020 stating that the Group’s maiden profit before tax will be ahead of market expectations. Consequently we are raising our PBT forecast from £152k to £182k. Cash balances at the year-end were also higher than forecast at £1.8m and we continue to remain very positive on the prospects for the Group.
Companies: REACT Group Plc
Gear4music reports that trading has remained strong in the 1st 2 months of Q2. Back in July it said it had achieved 68% sales growth in Q1 (to 30 June) along with improved gross margins and cost efficiency, notably in marketing. Today’s update says G4M is continuing to generate improved margins alongside proportionally lower marketing costs YoY, no doubt with additional operating leverage in other cost lines too. As a result, FY21 results “will be at least in line with recently upgraded expectations”. We make no changes today, pending an H1 trading update on 22 Oct, but highlight that forecast and valuation risk is very much to the upside. Time to take a look for those that haven’t yet.
Gear4music continued its recent run of positive news announcements yesterday with an upbeat AGM trading statement. Growth, following an exceptional first quarter in FY2021 (April to June), remained brisk in July and August. Moreover, the company’s strong sales momentum is more than matched by improvements on costs and margins.
Guild Esports is positioned to become the leading global esports brand based in the UK. With strong support from David Beckham, the company plans to pioneer the UK Premier League academy model in esports, attract leading sponsors, build a loyal fan base and establish a premium line of merchandise. Within 12 months of the IPO, Guild plans to contract 19 esports staff, register 1m fans and generate £5m sponsorship revenue, £1m merchandise revenue and £0.6m media revenue. Today, Guild announced a £3.6m three-year sponsorship deal with a new European fintech company and appears well positioned to meet its sponsorship revenue target.
Companies: Guild Esports PLC
Escape Hunt announced the acquisition of its Middle East master franchise partner, Escape Hunt Entertainment LLC (“EHE”). The operation offers high potential returns at modest cost and risk to Escape Hunt. The transaction also pushes the company’s rollout ahead of our forecasts. Such acquisition opportunities, combined with attractive new lease terms and rebounding early demand, position the company for strong return potential.
Companies: Escape Hunt Plc
Pendragon was making good progress in its turnaround when COVID-19 struck but appears to be coming through the crisis in good shape to date. Despite a £44m hit to profits during lockdown, we can envisage a modest underlying profit for the full year without further shocks. Today’s IMS is supportive of this view. The group’s new strategy should help deliver a transformation in the value of the business, long-term. The potential is not reflected in the current price which is weighed down by macro worries and misplaced concerns about debt. We see the risk/reward balance as attractive.
Companies: Pendragon PLC
Gear4music is the leading UK online retailer of musical instruments and music equipment and has established operating bases in Sweden and Germany to spearhead its expansion into mainland Europe. It operates a low-cost model, with further efficiency gains targeted, and is profitable from the first customer transaction, achieving a 250% gross margin return on its marketing investment in new customer acquisition.
N Brown is taking crucial steps in its transition to being a pure-play online retailer (currently 77% of sales) and to strengthen its leading position in the under-serviced market for fashionable plus-size apparel. While strategic updates may be on hold until a new CEO is appointed, the company closed the loss-making portfolio of high-street stores in H119 and further brand consolidation seems inevitable. The shares trade on a low FY19e P/E of 5.5x and yield 7.2%.
Companies: BWNG BGUA NBRNF
In this note and following the SMMT June data released earlier this week, we look at the key dynamics of the sector during H1 2020, and the prospects for the rest of the calendar year. While no direct stimulus for the sector was announced in the recent summer statement, customers who were considering their purchasing options now have the clarity to move ahead with buying decisions that were potentially on hold.
Companies: CAMB LOOK MMH PDG VTU
The final results revealed adjusted PBT up 99% year-on-year, which was 10% better than forecast despite four upgrades during the financial year. This strong performance reflects the financial benefits that have accrued following the shift in the business model to online only, as well as management’s strategic decision to significantly increase marketing spend. A second special dividend for the 2020 financial year has also been announced, reflecting the strong cash flow characteristics of the business model. Our 2021 profit forecast implies continuing momentum and a year-on-year increase in PBT of 86%. We raise our target price to 1050p.
Companies: Best of the Best plc
Gear4music has issued a trading update for the 6 months to Sep’20, highlighting strong top line growth of 42% (N1e: 35%), which can be attributed to the CV19 lockdown and channel shift. Alongside this, the group reported a gross margin improvement of 330bps (N1e: 200bps), reflecting management’s successfully executed operational strategy outlined just over a year ago. On the back of the announcement we have upgraded our FY21 gross margin by 110bps, which leads to a pre-IFRS 16 EBITDA upgrade of 16%. While management is cautious on the revenue outlook, given the near term uncertainty, our forecasts reflect the operational outperformance. Valuation is undemanding, and intrinsic value using its peer group average rating is 1150p.
Bowling, alongside low-cost gyms, is the strongest sub-sector of Leisure at present. Its fortunes have been revived over the last 5 years through product diversification, investment and a more family focused offering which is resonating with consumers seeking value and experiential treats. The sector is well established accounting for 3% of the family leisure market. We are attracted by its positive growth dynamics and minimal exposure to rising costs. We explore 6 themes in this note and initiate coverage on Hollywood Bowl (Buy; 250p 12m TP) and Ten Entertainment (Buy; 315p 12m TP), albeit with current year EPS forecasts 4% below consensus, reflecting recent prolonged hot weather concerns. On a 1-3 year view both have plenty of scope to further enhance shareholder value through self-help and site expansion.
Companies: Hollywood Bowl Group Plc (BOWL:LON)Ten Entertainment Group Plc (TEG:LON)
We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.
Companies: BCA CLIN CLG CBP DNLM EAH STU FCRM FUTR GTLY INS GLE NICL SDL SPR TRI
The global online gaming market generated c £40bn of gross gaming revenues (GGR) in 2018 and newly regulating markets (the US) are expected to contribute to 7% CAGR to 2023 (according to H2 Gambling Capital (H2GC)). However, while regulated markets have provided significant opportunities for operators to date, government intervention remains a constant threat and legislation is tightening. Some mature markets (notably the UK) have been raising taxes and implementing regulatory burdens, which increases the cost of business. In our view, success will depend on a combination of scale, diversification, proprietary technology and a strong balance sheet. Many of the 12 operators in this report should benefit from these dynamics and sector valuations remain attractive, at 12.6x P/E, 8.2x EV/EBITDA and 6.0% dividend yield for FY19.
Companies: 888 BAH ORPH GVC GYS OPAP PTEC RNK WMH