Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December.
ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m.
RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m
Companies: CPX AUTG CNIC JOUL PCF BHRD CHOC FIPP KMK
Share prices are built on expectations - expectations about all sorts of things, such as a company’s future sales growth, the trend in margins and the profits it can return. Understanding those expectations and how they move is critical to share price formation. Listing rules require quoted companies to update investors on progress relative to expectations. What managements often fail to understand is that many of their key investors do not have access to brokers’ research and, thus, cannot put management statements into context. It is these very investors that can cause shock movements in share prices on announcements in limited trading.
Companies: ABZA AGY ARBB BUR COG CLIG DNL LRM MUR ODX PPH YGEN PHP PURP RE/ RGD REDX SCLP TRX TON CHOC AVO AVCT TETY
Many commentators realise that the traditional institutional broking model is no longer sustainable. However, the reduction in the quantity of non-corporate coverage that has already occurred, even before MiFID2 comes into effect, will still come as a shock. The evidence shows that there is no commercial sense in brokers covering non-corporate companies with less that £200,000 daily turnover in their shares.
Companies: ABZA AGY ARBB BUR CLIG GRA LRM MUR PPH PHP PURP RE/ RGD REDX SCLP TRX TON CHOC AVO AVCT TETY
The dramatic – and historic – vote on June 23rd for the UK to exit the EU caught many organisations short, not least the EU itself. Both stock markets and currency markets were anticipating a narrow majority for the UK to remain within the EU – on a similar basis to the 2014 Scottish referendum. But it was not to be. As a result, the financial markets have reacted sharply in recent months, although other non- Brexit factors have also come into the equation.
Companies: AGY APH ARBB BUR CLIG GRA LRM MUR YGEN PHP PPH RE/ REDX RGD TON TRX CHOC AVO AVCT TETY
‘Smaller UK public companies, typically those below £100m in size, face many barriers to accessing growth capital from the stock market. Poor liquidity results in these companies being perceived as private companies with a quote’.
Companies: AGY APH CLIG GRA LRM MUR YGEN PPH RE/ RGD TRX CHOC PHP AVO TETY
In recent years, various sectors have seen dreadful share price performances, not least the banks once the magnitude of the 2008 credit crisis became all too apparent.
Companies: AGY APH BUR CLIG GRA LRM MUR RMAX RGD PPH CHOC PHP AVCT TETY
Our key feature article, titled “The Capital Cycle of a Growth Company”, looks at two key related issues that many growth companies typically face with insufficient consideration:
1) Who will be their next investors?
2) What will their investors expect from in return?
The author, Antony Gifford, has had a distinguished career as an investment manager for 19 years, having worked for Hardman Global Investors, Deutsche Asset Management and Flemings.
Companies: AGY APH GRA LRM MUR PPH YGEN PURP RE/ RGD TON CHOC PHP AVCT TETY
Nigel Hawkins is again our feature writer of the month. Last month it was a review of the UK/ EU Electricity Sector – this time he has again turned his attentions to UK/EU Relations by assessing the risks to the UK financial and business sectors from our possible exit from the EU. The main conclusions from Nigel’s analysis are: The £ Sterling will be volatile, especially if Brexit prevails. Few of the largest FTSE 100 stocks are heavily exposed to the EU- Vodafone being a notable exception. A vote for Brexit may be the start of a long drawn out process of exiting the EU – if the UK Parliament approves the relevant legislation. Major changes in the tariff rates would have a significant impact but existing trade arrangements may last for many years.
Companies: AGY APH BUR CLIG GRA LRM MUR PPH YGEN PURP RE/ RGD REDX TRX CHOC PHP AVO AVCT TETY
This month’s feature article is the first publication of the top 15 drug companies in the 2015 global industry ranking and how this has changed over the last decade. In trying to analyse the changes that have taken place, we have looked at different strategies used by management teams. Many companies are featured, but there is emphasis on GlaxoSmithKline (GSK), AstraZeneca (AZN) and Shire Pharmaceuticals (SHP). In addition, we have analysed how drugs derived from antibodies have driven market growth and now represent just over 10% of annual industry sales.
Companies: AGY APH GRA LRM MXF MUR PPH PURP RE/ RGD REDX TRX CHOC PHP AVO AVCT TETY
Grafenia (GRA): We anticipate a trading update later this month | MedicX Fund (MXF): 8th February- EPRA NAV update: 71.2p (+2% vs end September) | Primary Health Properties (PHP): 4 th February Final Results announcement | Purplebricks Group (PURP): 26th January- interim results. Real Good Food (RGD): 7th February Trading update.
Companies: BUR CLIG GRA LRM MXF MUR PPH PURP RE/ RGD REDX TRX CHOC PHP TETY
The Financial Conduct Authority fears that the lack of transparency in investment and corporate banking and bundling reduces competition. They are in the process of a major study into this whole field. Any action they take is likely to hit the revenue model of these firms. Perhaps the traditional and unique British model of corporate broking will not survive.
Companies: AGY APH BUR CLIG EMR FUM GRA LRM MXF MUR PPH RE/ RGD SND CHOC PHP TETY
The Office for National Statistics has just published its bi-annual report ‘Ownership of quoted shares for UK domiciled companies’ using 2014 data. For the first time, data for AIM companies has been split out from the whole market. It shows that retail investors form the largest cohort of investors in AIM, constituting 30.9%. We would argue that they are even more important because they provide the daily liquidity from which the share price is set; retail investors are not just the ‘marginal buyers’. Unless a company has a means of addressing this audience retail investors will either not be interested in the company, or worse, might be influenced by misleading analysis and information on media such as bulletin boards and blogs.
Companies: APH CLIG EMR FUM GRA LRM MXF MUR PPH RE/ RGD SND CHOC PHP TETY
United Cacao Ltd SEZC (UCL), the AIM listed cocoa plantation company with operations in Peru, has announced its interim results for the 6 months to 30th June 2015. UCL is deep into the development of a plantation that will extend to 3,250 hectares (ha) of freehold land zoned for agriculture, when fully planted. Some 70% of the plantation will be cultivated with high yielding clonal varieties imported from Ecuador and the remainder will be given over to fine flavour varieties, some native to Peru. At end June 2015 1,150 ha of the nucleus estate had been planted along with the first 17 ha of out grower orchards, (compares with 556 ha end 2014). UCL owns 3,787 ha (3,602 ha end 2014). By the end of 2015 the company expects to have planted 1,950 ha comprising 1,750 ha of nucleus estate and 200 ha of out growers (Programa Alianza Producción Estratégica Cacao).
Companies: United Cacao Ltd Sezc
Alliance Pharma | City of London Investment Group | Empresaria | Futura Medical | Grafenia | MedicX Fund | Lombard Risk Management | Murgitroyd | Primary Health Properties | PPHE Hotel Group | R.E.A. Holdings | Real Good Food | Sanderson | Tethys Oil AB | United Cacao Limited SEZC | Verona Pharma
Companies: APH CLIG EMR FUM GRA MXF LRM MUR PPH RGD SND CHOC PHP TETY
Alliance Pharma | City of London Investment Group | Empresaria | Futura Medical | Grafenia | Lombard Risk Management | MedicX Fund | Murgitroyd | PPHE | Primary Health Properties | R.E.A. Holdings | Real Good Food | Sanderson | Tethys Oil AB | United Cacao Limited SEZC
Companies: APH CLIG EMR FUM GRA LRM MXF MUR PPH RGD SND CHOC PHP TETY
Research Tree provides access to ongoing research coverage, media content and regulatory news on United Cacao Ltd Sezc.
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Further media reports that Dr Martens, the British Boot brand is planning an IPO on the LSE. It is currently owned by PE group, Permira who is expected to sell down its stake at the IPO. March 2020 YE the group had revenues of £672m and EBITDA of £184m. Deal size TBC. Upon Admission to AIM, Nightcap will acquire The London Cocktail Club Limited (the "London Cocktail Club"), which is an award winning independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol. Offer TBC Due mid Jan. HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market. Due 14 Jan. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: IUG CBP KAT APP RST DIS NICL BOKU CNIC HE1
As expected, the COVID-19 pandemic caused significant declines in out-of-home consumption, which were partly offset by gains in at-home consumption and market share gains. Full year revenue declined 6.8% on a constant currency basis, while adjusted EBIT was down 21.9% at constant currency, and adjusted EPS was down 27.8%. A full year dividend of 21.6p was confirmed, following the decision in H1 to prudently suspend the dividend. Management focused on cash and cost efficiency to mitigate the impact of the pandemic as much as possible. During the period, the company extended its carbonates relationship with Pepsi to 2040. The outlook is understandably cautious, given the uncertainty in terms of further restrictions in Britvic’s main markets. Nevertheless, management has carefully planned its approach, and the agility demonstrated so far should continue to help Britvic navigate the uncertain environment.
Companies: Britvic plc
Dekel Agri-Vision has announced the launch of a €15.2m, 7-year bond facility. This bond, which has been approved by the Ivorian regulator, forms part of a long-term refinancing programme to extend the maturity of the debt profile of the group and strengthen the balance sheet, to facilitate the company's growth strategy.
Companies: Dekel Agri-Vision Plc
A brief year-end trading update with not a huge amount of details. The main point is that post the July 2019 profit warning, the PBT performance through a combination of mix and cost savings has come in towards top-end of market expectations, implying c18% y/y decline. So a c3% beat vs our £36.5m. Revenue decline at -9% however was worse than our -7%. This reflects ongoing challenges with the Rubicon and Rockstar barns and lower Irn-Bru volume due to price realignment. Net, the company had a better H2 than H1 and from our understanding, exits Q4 with good momentum. Looking ahead to 2020, the comps are easier and the company is expected to get back into growth mode (albeit 3% at the PBT level). The main cloud on the horizon is the Deposit Return Scheme for Scotland, and we understand the Scottish Parliament will provide an update on plans in the next few weeks. We view this as short-term negative for AG Barr and hence have a y/y profit decline for FY22. Post today’s update we nudge our current year PBT up by 2% and FY21 by 2% also. There will be some investor relief this morning but given the anaemic growth outlook and ongoing headwinds we feel an FY21 P/E looks full. We stay at Hold.
Companies: A.G. BARR p.l.c.
Upon Admission to AIM, Nightcap will acquire The London Cocktail Club Limited (the "London Cocktail Club"), which is an award winning independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol. Offer TBC. HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange.
Companies: PMI RMM SUN BOIL ITM TRMR MLVN 88E IME ANP
A G Barr’s (BAG LN, HOLD, T/P 600p) FY2018 half-year results broadly matched expectations at revenue and profit level. Net revenue was £137m, i.e. very similar to the £136m reported in the 2nd August 2017 trading statement. They represented an 8.8% increase from the previous year. The latest IRI data (18th June) showed category value and volume increases of 3.5% and 2.1% respectively.
Ongoing labour cost challenges, higher input costs, sustained brisk organic sales volume growth and further room for innovation at both product and distribution level were the key investment features of the 2018 British Sandwich & Food to Go Association AGM and Conference, which was held in London yesterday. Moreover, the association had strong messages on food waste reduction and CSR, both of which are important as the industry body continues to lobby the UK government hard ahead of Brexit. The chief UK listed plays on Food to Go are Greencore (GNC LN, BUY, 310p), Cranswick (CWK LN, HOLD, T/P 2700p) and potentially Produce Investments (PIL LN, BUY, T/P 240p). Our overall industry stance remains positive.
Companies: GNC CWK PIL
AG Barr has navigated a tricky H1 (sugar levy, snow, CO2 shortages and upside from hot weather) to deliver a satisfactory set of financials - sales up 5.5% which flowed through to a modest 4% uplift in PBT. The DPS has been nudged up by 5%. So a steady as it goes performance with no meaningful new news or surprise this morning, albeit we note that in revenue terms the company underperformed market growth of 7.7%. Management is guiding to no change to full year expectations this morning. Given low single digit growth expectations the valuation we feel looks full, with share buybacks being the main support over the last few months.
Britvic’s Q1 trading was in line with expectations, with organic constant currency revenue growth of 1.5% excluding the soft drinks levies, and reported revenue growth of 4.5%. With five-year EPS CAGR of 9.8%, DPS CAGR of 8.9% (to September 2018) and debt within the target range, this is a textbook consumer staples company. During FY19, the business capability programme is due to be completed, bringing higher capacity and increased flexibility to the company. Trading at 10.1x consensus FY19e EV/EBITDA, the shares offer interesting value.
Britvic has delivered another strong performance in H1, with organic constant currency revenue growth of 1.9%, organic adjusted EBIT margin up 30bps and adjusted EPS up 5.2%. The business capability programme (BCP) is due to be completed during H219, bringing higher capacity and increased flexibility to the company. Looking ahead, as capex and leverage normalise to lower levels, and planned returns and further growth from the BCP programme come to fruition, the wide discount to peers may narrow.
In FY19 Britvic delivered a strong performance showing good momentum in its core business. The GB business had both Britvic and PepsiCo brands showing revenue growth, Brazil continues to grow and problems in France are being addressed with a proposed exit from private-label juice. The Business Capability Programme (BCP) is complete, and cost savings delivered ahead of schedule. The outlook is somewhat cautious as the consumer environment remains tough, and changes in France will take a while to fully implement. Notwithstanding this, management expects to make further progress in FY20.
Britvic’s Q1 trading was in line with management expectations, indicating a good start to the year. The company acknowledges that market conditions ‘remain challenging’, but it is confident of achieving market expectations for the year. Q1 revenue was £369.8m, up 4.9% vs the prior year. This includes a benefit from extra trading days. On a comparable days and constant FX basis, revenues were up 2.6%.
Britvic has issued an update on the impact of the coronavirus. Prior to recent developments, trading was broadly in line with expectations. The recently announced government-mandated measures, however, will significantly affect consumption in outlet and on-the-go. The company has undertaken extensive modelling. Assuming the current conditions persist across its key markets, management’s best estimate is that the impact on the group is a reduction in EBITA of £12–18m per calendar month. Britvic also updated on its financial position, with headroom available versus its lending covenants.
FY20 started well, with value share gains in GB, Ireland and Brazil. As expected, lockdown has affected out-of-home and on-the-go consumption in particular. Conversely, sales of at-home consumption packs have increased significantly, thus leading to an adverse mix effect. GB and Ireland have been the most affected markets for Britvic, as they have a greater exposure to the out-of-home channel. The company is maintaining its guidance of a likely monthly impact from the COVID-19 pandemic of £12–18m adjusted EBIT, although its scenarios seem very conservative.
Premier Foods’ FY20 results demonstrate the substantial progress the company has made over the past few years. The UK business has now grown for 11 consecutive quarters and Q121 is set to be very strong. In the UK the brands grew ahead of their categories and the innovation rate has hit a new high. A new landmark pensions agreement was signed in April, which could potentially significantly reduce the future funding requirements for Premier Foods. The recent triennial actuarial valuation delivers further credence to the pensions deal.
Companies: Premier Foods plc