Essensys plc—a provider of mission-critical SaaS platforms and on-demand cloud services to the high growth flexible workspace industry, plans to join AIM. £28m raised. Half primary, half shareholder sell down expected 29 May 2019. Mkt cap £72.6m. Issue price 151p.
Induction Healthcare Group plc—a healthcare technology company focused on streamlining the delivery of care by Healthcare Professionals looking to join AIM. Expected raise of £14.58m at 115p, market cap of £34.07m. Expected 22 May 2019.
SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m
Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019.
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
Companies: VTC EPWN APC MAB1 IMO RENX DODS BOKU AMYT
The trading update for the 6 months to 30 June 2018, released ahead of Mortgage Advice Bureau’s interims, due on Tuesday 25 September, reveals: Revenue rose 16% 1H on 1H to £57m (1H17: £49.6m) driven primarily by a 13% increase in the average number of Advisers to 1,103 over the period (six months ended 30 June 2017: 974); The number of advisers on 30 June 2018 was 1,138: growth of 60 advisers (i.e. 6%) which is similar to last year (1H17: 58 or 6%); as in 2017 new business recruitment will be weighted to the second half of the year; Strong balance sheet with £22m of cash (June 17: £19.0m) of which £12m was (June 17: £10.9m) unrestricted cash.
Companies: Mortgage Advice Bureau (Holdings) plc
We observe four attractive characteristics, which ensure MAB delivers predictable revenue, profit and dividend growth: Currently, the main driver of growth in MAB’s revenues, profits and dividends is the number of advisers employed or self-employed by its Appointed Representative firms (ARs); High cash conversion: operational cashflow is over 100% of post-tax profit; MAB is capital light: it is able to pay out 90% of reported earnings; MAB’s management team has a material equity interest.
Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine ("South Crofty"), a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June.
Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Offer TBC, expected late May.
Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May
Team17 Group -video games label and creative partner for independent developers. Since 2014, delivered a revenue CAGR of 69% (31 December 2015 to 31 December 2017), with revenues of £29.6m and Adjusted EBITDA of £12.9m. Offer TBA
Serinus Energy -international upstream oil and gas exploration and production company. Its principal assets are located in Romania (development phase) and Tunisia (production phase). Raising c.£10m at 15p. Due 18 May. Mkt cap £32.6m
Companies: THA BOTB MAB1 SOS FLX WEB BEM PRSM BOIL ARS
MAB’s results for the year to December 2017, which have beaten our expectations, confirm that it is growing in a relatively flat market. In 2017 MAB delivered: 14% yoy rise in average adviser numbers to 1,008 (31 Dec 17: 1,008); 17% rise in revenue to £108.8m (Zeus forecast £109m); 3% increase in average revenue per adviser (i.e. productivity is rising); 16% growth in adj PBT to £14.5m (Zeus forecast £14.1m); 14% rise in fully diluted adj EPS to 23.2p (Zeus forecast: 22.9p) 17% rise in DPS to 21.4p (Zeus forecast: 21.0p) 21% rise in cash to £22.6m (including over £13.2m of unrestricted balances which is up 22%) The number of Appointed Representatives (ARs) which use MAB continues to grow. MAB has a strong pipeline of new ARs and management remains confident about delivering on its growth plans, both organically and from new ARs.
This morning’s pre-close trading update confirms that MAB has achieved good growth in 2017 and that 2018 has started well. Specifically: 14% yoy rise in average adviser numbers to 1,008 (31 Dec 17: 1,078); 17% rise in revenue to £109m (1H17: £50m; 2H17E: £59m); 3% increase in average revenue per adviser (i.e. productivity) Group PBT for the year 2017 is “in line with the Board’s expectations” Cash over £22m (including over £13m of unrestricted balances) The number of Appointed Representatives (ARs) which use MAB continues to grow. Peter Brodnicki, CEO comments “[MAB has] a strong pipeline of new ARs and we remain confident about delivering our growth plans, both organically and from new ARs.”. Full year results are due on Tuesday 20 March 2018.
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We have refreshed our quality style screen for the first time since its inception in February this year. As before, the screen selects the 25 stocks exhibiting the highest quality characteristics according to our criteria from our universe of approx. 500 stocks and we have chosen 10 stocks to focus on. Since inception the screen has significantly outperformed the main small-cap index and marginally outperformed the microcap index. There was notable volatility around the UK general election, which is interesting as quality would usually be seen as a defensive style in large-caps. As expected, turnover of constituents is modest with only 9 leavers and joiners despite the extended time-scale since inception. We will refresh again in five to six months’ time.
Companies: WIL GHT AVON CHH ZYT DOTD MAB1 GTLY FCRM VANL
MAB’s interim results to 20 June 2017 reveal profitable growth: 14% yoy rise in average adviser numbers to 974 (1H16: 851); 15% yoy rise in revenue to £49.6m (1H16: £43.1m; 2H16: £49.7m); 20% yoy growth in gross profit to £12.0m (1H16: £9.9m; 2H16: £12.2m); Gross profit margin rose to 24.1% (1H16: 23.1%); 19% yoy growth in PBT to £6.3m (1H16: £5.3m); 23% rise in 1H17 EPS to 10.6p (1H16: 8.6p); 22% rise in interim DPS to 9.5p (1H16: 7.8p)
Transense Technologies* (TRT): Full-year results – at a turning point in commercial traction (CORP) | Altitude Group* (ALT): Interims on track, opportunity grows (CORP) | Universe Group* (UNG): All to play for (CORP) | Minds + Machines* (MMX): Fruits of labour (CORP) | Taptica* (TAP): 47% YoY H1 earnings growth with cash to match (CORP) | Netcall* (NET): Consistency and opportunity (CORP) | Castleton Technology* (CTP): Delivery of milestone contracts (CORP) | Sopheon* (SPE): Industry recognition (CORP) | 7digital* (7DIG): Interims (CORP) | Mortgage Advice Bureau (MBA1): Building IP (HOLD)
Companies: ALT UNG MMX TRMR NET CTP SPE 7DIG MAB1 TRT
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Ahead of the publication of its interim results on Tuesday 26 September, Mortgage Advice Bureau (MAB) has released a pre-close update, which reveals: Revenue increased 15% YoY to £49m (1H16: £43.1m); Average adviser numbers rose 14% to 974, Total number of advisers rose 58% since 30 June 2016 and 6% since last year end to 1,008 on 30 June 2017 with “new business recruitment 2H weighted”; Revenue per adviser rose modestly compared to 1H16 which benefited from the 1H16 spike in Buy-to-Let applications; At 30 June 2017, the Group had a £19m cash position including £11m unrestricted cash balances.
Strix Group PLC—Sch1 from the Company involved with the design, manufacture and supply of kettle safety controls and other and devices involving water heating and temperature control, steam management and water filtration. Offer TBC admission date 8 August 2017 | Xpediator Plc—Sch 1 from the holding Company for an integrated freight management business operating in the supply chain logistics and fulfilment sector across the UK and Europe with a strong presence in Central and Eastern Europe. Offer details TBC, expected Admission early August 2017. | GetBusy PLC—Sch1 from the holding Company of its subsidiary undertakings, which operates as a document management software business, headquartered in Cambridge, UK and operating across the UK, USA, Australia and New Zealand. Capital to be raised via a rights issues of £3m at 28.3p with anticipated market cap of £13.7m, Admission 4 August. | Quiz—Sch 1 from the omni-channel and international own brand in the women's value fast fashion sector. Offer raising £102.7m at 161p, expected market cap £200m. Expected 28 July. Last year Quiz posted sales of £87.4m while pre-tax profits grew by 17pc to £5.7m | Altus Strategies—African focused natural resource Company. Offer TBC. Expected early August | Harvey Nash Group— Provider of professional recruitment and offshore solutions moving to AIM from Main, 8am 28 July 2017. No capital to be raised. Mkt Cap c. £57.8m.
Companies: ORPH EUSP TMO BXP SAE MYT GOAL MAB1 RTHM AMYT
Victoria* (VCP): FY17 results beat expectations (CORP) | Proteome Sciences* (PRM): Interims – organisational changes to benefit (CORP) | Acal (ACL): Strong organic progress (BUY) | Revolution Bars (RBG): FY17 earnings guided up (BUY) | Mortgage Advice Bureau (MAB1): In-line trading with a Buy to Let spike (HOLD) | Gem Diamonds (GEMD): H1 trading update (BUY) | GB Group (GBG): AGM statement reveals trading in line (BUY)
Companies: PRM DSCV RBG MAB1 GEMD GBG VCP
Since its IPO in November 2014, Mortgage Advice Bureau (MAB) has delivered on its strategy for growth and built its market share from 3.0% in 2014 to 4.1% in 2016.
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Litigation Capital Management has announced FY20 results with gross profit up 7% to A$21.7m and PBT of A$9.2m, slightly behind expectations albeit the Group had already flagged that delays to 3 cases during the year would result in resolutions in FY21, thereby impacting FY20 results. That said, excellent strategic progress through the year and good news flow as well as increasing scale suggests more value to come. Reiterate buy
Companies: Litigation Capital Management Ltd.
To achieve YoY revenue growth over H1/20A despite the challenges of Covid-19 and its impact on the travel sector is testament to Equals' resilience and increasing focus on B2B and International payments services. While weaker gross profit and EBITDA margins have impacted profitability in H1/20, we see potential for an earnings recovery in H2/20 given cost reduction measures currently being undertaken. This should lead Equals to cash breakeven in Q4/20 and FCF positive by early FY21.
Companies: Equals Group Plc
FY20A results largely reflect a period prior to the Covid-19 lockdown, yet show Duke entering a more challenging FY21E with momentum. Yesterday's trading update demonstrated another notable rise in quarterly cash receipts for Q2/21, as royalty partner trading continues to improve. As some partners' forbearance measures will expire this month, Q3/21 receipts should continue this upwardly momentum. This opens the door to a return to cash dividends at some future point. Today, Duke also confirms it is now seeking new royalty partners, alongside follow-ons.
Companies: Duke Royalty
Sigma Capital (“Sigma”) has partnered with global alternatives manager EQT to deliver and manage a £1bn GDV private-rented sector (“PRS”) housing fund focused on Greater London. EQT will invest £300m equity, complemented by debt (including a Homes England facility), to build 3,000 homes in 5 years. Sigma will generate fee income as development manager, a recurring fee income stream from managing completed assets, as well as participation in returns via a minority co-investment (£16m) and a profit share. We estimate that the fee income alone is worth £45m to Sigma in the first five years: 50% of the current market cap. Crucially, this is a step up in AuM bringing a high quality long-term recurring earnings stream. We will reforecast following interim results (expected tomorrow) to provide full context.
Companies: Sigma Capital Group Plc
In June, faced with the task of replacing its longstanding portfolio manager, Alistair Mundy, Temple Bar Investment Trust’s (TMPL’s) board reiterated its commitment to a value style of investing. The board has now opted to hand the management contract to Nick Purves and Ian Lance of RWC Partners, two managers with considerable experience of managing income portfolios using a value-style approach. Value investing, where managers buy stocks that are valued more cheaply than market averages – based on measures such as price/earnings, price/book and yield – is deeply out of favour. The RWC team says that value stocks have never looked more unloved in the 30- odd years that they have been managing money. In their view, this makes it imperative that TMPL investors keep faith with the strategy and it also means this is an attractive entry point for new investors. One important change, however, is a cut to TMPL’s dividend to a level that the RWC team believes will be more sustainable.
Companies: Temple Bar Investment Trust
Interim results demonstrate YoY growth and a resilient outcome that has exceeded management's expectations from the start of the Covid-19 pandemic. This is testament to the degree of recurring revenue generated across the business. FY21 trading looks to be more challenging, as notably lower new insurance sales post-lockdown will translate into lower premium income. A number of organic opportunities are being worked on to fill the shortfall. Rising UK redundancies and their impact on policyholder retentions creates great uncertainty, hence our forecasts remain withdrawn and recommendation remains Under Review.
Companies: Personal Group Holdings Plc
HSBC’s future should be clarified as soon as the US and China come back to the negotiation table. This will not happen before the US elections are over. In the meantime, HSBC will continue to be instrumentalised and its share price will remain under pressure.
Companies: HSBC Holdings Plc
L&G reported an operating profit from continuing divisions (excluding Mature Savings and General Insurance businesses) of £1,128m, -2.2% yoy. The COVID-19-related cost was £129m. LGR posted a growing operating profit to £721m. Net profit amounted to £290m vs. £874m a year before, being affected by the reduced discount rate used to calculate LGI reserves. The Solvency II ratio stood at 173%. The Board recommended an interim dividend of 4.93p/share, stable relative to H1 19.
Companies: Legal & General Group Plc
In line interim results to 30 June 2020 show the strength of this business amid a difficult environment. This is the first step in what should be an exciting growth trajectory toward a larger, scaled up business with high recurring revenues and ownership of the full supply chain in the personal injury and clinical negligence market for clients requiring long-term, risk-adjusted returns. We reiterate our TP of 50p, noting further upside potential as acquisitions are completed.
Companies: Frenkel Topping Group Plc
Today's news & views, plus announcements from VOD, POLY, SMDS, BLND, BYG, WEIR, DC, SNR, SHI, INTU, IHR, CNC, ARE, INCE
Companies: INTU SHI INCE
The impressive full year 2019 results included some eye-catching numbers, including a record PBT of £40.1m (nearly 3x FY18 @ £14.3m), £620m of reserves acquired over 16 legacy deals, and $842m of (estimated) Contracted Premium in the Program business – on track to breach $1bn in FY20 as previously guided and $1.5bn-$2bn in 2022-2023.
Companies: Randall & Quilter Investment Holdings Ltd.
Mercia’s FY20 results reflect continued progress, delivering on management’s three-year strategy. AUM climbed 58% to £0.8bn, while FUM rose 73% to £658m. Following the acquisition of the NVM VCT fund management business, the company is operationally profitable on a monthly basis, with annual revenues exceeding operating costs for the first time in FY20. Net assets rose 12% to £141.5m, with the direct investment portfolio stalled at £87.5m reflecting the impact of COVID-19 fair value adjustments and a £15.7m net investment. The group remains well-placed for a downturn with £30m of unrestricted balance sheet cash and £320m of group cash. Post period end the group exited The Native Antigen Company, with £5.2m in cash (8.4x return, 65% IRR) expected. Despite the group’s progress, Mercia’s shares continue to trade at a material discount to NAV (0.60x), even before considering the embedded value of the third-party fund management business (> 4.5p at 3% of AUM).
Companies: Mercia Asset Management Plc
Activity was limited by housebuilding shutdown in H1 as a result of COVID. Sigma remained profitable and, with a strong balance sheet, has weathered the storm. With yesterday’s launch of the £1bn EQT London fund, a material step change is expected for the coming financial year. We reinstate forecasts; updating for EQT and revised expectations post-COVID. We revisit our valuation: a “sum of the parts” approach, assuming no additional AuM, implies an intrinsic value of 200p/share.
Trident Royalties Plc (AIM: TRR) has, this morning, announced the acquisition of a 1.5% Net Smelter Royalty (NSR) over the resourcestage Lake Rebecca Gold Project located in the highly prospective Eastern Goldfields province in Western Australia. The royalty package is being acquired from a private seller for a total consideration of A$8.0 million (c. US$5.63 million), comprising of A$7.0 million in cash and A$1.0 million in new ordinary shares in Trident. The acquisition is Trident’s fifth overall and its third gold deal. As per strategic guidance the company is moving fast assembling a diversified portfolio with a paying cashflow stream from iron ore and copper production and several strategic gold royalties with the potential for near term revenues. The market is paying attention with TRR shares up 49.8% since its IPO on AIM in June this year. There is clearly more to come with c. US$7.5 million of uncommitted cash as well as the potential for debt funding and the ability to use equity as acquisition consideration. The Lake Rebecca Gold Project operated and wholly owned by Apollo Consolidated (ASX: AOP), is located 150km ENE of Kalgoorlie in the Eastern Goldfields Province of the Yilgarn Craton. The Project, envisaged as a simple open pit operation, is close to existing gold infrastructure namely Saracen Mineral Holdings Limited’s (ASX: SAR) Carosue Dam Operation whose processing plant is in the process of being upgraded to increase throughput to 3.2 Mtpa.
Companies: Trident Royalties Plc
L&G released operating profit from continuing divisions of £2,514m, up 17% yoy. All business units posted an upward trend in earnings. The profit excludes the mortality release of £155m and the Mature Savings and General Insurance businesses (£11m). Net profit stood at £1,834m. The proposed dividend is 12.64p/share, bringing the annual dividend to 17.57p. The Solvency II ratio stood at 184%. We keep our positive opinion on L&G, the business model of which allows it to benefit from increasing numbers of deaths.