Many happy returns

NIOX has delivered FY23 results in line with upgraded expectations. Notable highlights include CER growth of 29% in the core Clinical business, Adj EBITDA margins reaching 31%, the payment of a 2.5p Special dividend and the declaration of a maiden 1.0p final dividend. With a strong balance sheet, the prospect remains for additional special dividends from excess cash in addition to a progressive ordinary dividend. We make no material change to forecasts at this stage and continue to see a long gr

Core holding trading on 5% FCF Yield

NIOX enjoyed another strong year in FY23, with revenues growing >20% CER and operating margins improving materially once again. We see scope for sustained growth into the medium term, with various initiatives underway to further drive penetration of FeNO testing. The fundamentals of NIOX are highly attractive, supported by regular forecast upgrades and optionality around shareholder returns given the strong balance sheet. In this context, the shares should be viewed as a core holding in the sect

Reassuring FY23 Trading Update

NIOX has delivered a broadly positive FY trading update coupled with an upbeat financial and operational outlook. FY revenues are expected to come in at £36.8m (+22% CER vs FY22); slightly lower than cons. £37.6m and SCMe £37.9m but net cash ahead of market expectations at £19.9m (vs cons. £18.9m & SCMe £19.3m). Furthermore, margins are expected to improve to 72% resulting in FY23E adj. EBITDA coming in line with cons. at £11.4m. We make no changes to forecasts today, as we await full detail fro

Interims – trading in line with upgraded estimates

NIOX delivered a strong H1, driven by Clinical revenues +29% in the period. Trading is in line with the forecasts that were materially upgraded in July. Margins continue to strengthen and cash flow is following the increased profitability. Having returned £10.5m via a special dividend in September, we expect a maiden ordinary dividend to be declared at the finals in March, reflecting the strong fundamentals and highly cash generative nature of the model. We continue to view NIOX as a unique asse

Strong Clinical trading prompts further upgrades

The strong momentum in the first four months of the year has continued for the rest of H1, with core Clinical revenues increasing by a strong 29% in the period. APAC was the key highlight as those markets return to normal post the easing Covid-related restrictions, but other territories continue to deliver good growth. Favourable mix and a further reduction in overheads YoY has brought Adj EBITDA in at £6.2m, considerably more than 50% of our FY estimate. We therefore push through further materi

AGM statement prompts further upgrades

NIOX’s strong momentum has continued, with revenues increasing 21% in the first four months of the year. Gross margins have remained robust and, with a continued tight control of overheads, management now expects FY23 Adj EBITDA to be significantly higher than that expected at the start of the year. We upgrade our FY23 estimates accordingly (Adj EBITDA +17% to £10.0m) and ripple these through outer years. The direction of travel is clearly very positive and we see continued scope for growth and

Positive momentum persists

2022 was a pivotal year for NIOX as it moved firmly into sustainable profitability and cash generation. The foundations for a scalable platform are now well-established and the group enters 2023 with strong momentum (revenues in the first two months of the year were +19%). Having upgraded our forecasts following the trading update in January, we push through further EBITDA upgrades on improved margin assumptions. NIOX is a rare asset and fully deserves a premium rating. We stay at Buy, with an i

Confirming further upgrades post positive update

At the trading update earlier this week, NIOX indicated FY22 EBITDA would be around £7.0m, ~15% ahead of already upgraded expectations, with net cash coming in at £19.4m. This was driven by 15% underlying revenue growth, improved gross margins on mix and ongoing operational efficiencies. We formally update our estimates in this note, increasing our FY22 PBT/EPS forecast by 20% but, prudently, leaving FY23/24 unchanged for now. The outlook remains positive with latent growth potential in the US a

FY22 EBITDA ahead of upgraded expectations

NIOX has again exceeded expectations, with FY22 EBITDA expected at around £7.0m, ahead of both our and consensus expectations, which had already been upgraded twice in the year. This was driven by better than expected gross margins and ongoing operating efficiencies. The balance sheet is strong, with good cash generation and the first instalment of the BeyondAir settlement received. Net cash (pre-IFRS16) was slightly ahead of expectations at £19.4m, providing optionality over investment and shar

Strong interims – on track for FY

Niox (formerly Circassia) has delivered a strong set of interim results, which has continued into H2. Revenues in July and August increased by a strong +25% and trading is in line with already upgraded EBITDA expectations. Cash reserves continue to build and we increase further our Y/E cash assumptions by £3m, reflecting lower than expected legacy rebate payments. The board is seeking approval to create distributable reserves to facilitate potential returns to shareholders in due course. We reit

Positive update leads to material further upgrades

Circassia has delivered another positive update, demonstrating yet again the benefits of management’s restructuring actions in recent years. Notable highlights were a strong Gross Margin performance on favourable mix effects and continued progress on reducing the overhead base. Net, this resulted in EBITDA of £3.2m in H1, some 78% of our previous FY estimate. We push through material profit upgrades this year (+50% to EBITDA) and trickle these through to outer years. With cash generation now fol

Continued growth and margin improvement prompt further upgrades

A positive AGM update confirms strong revenue growth has continued YTD and further margin improvement means management again expect EBITDA to be materially ahead of expectations. The business model is now settled, with additional distributors appointed in the US which should help drive further penetration into the Primary Care market there. China revenues were strong and with no sign yet of any slowdown, despite being cognisant of renewed lockdowns there. Gross margins have remained robust on po

Shield Therapeutics - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

Warpaint London+ (W7L, House Stock at 470p) - Outstanding FY23A - Upgrades!

Cambridge Nutritional Sciences - Operational efficiencies; adjusted EBITDA profi

Cambridge Nutritional Sciences (CNS) has provided a trading update for the 12 months to 31 March 2024, noting that a combination of strong sales growth and significant margin improvements, driven by operational efficiencies, have played key factors in the group’s expectation of being adjusted EBITDA positive in FY 2024. Revenues are expected to be £9.8m (30% YoY growth), ahead of our £9.0m forecast, with gross profits expected to exceed £6m, which is again ahead of our year-end forecast of £5.6m

Creo Medical Group - Speedboat savings validated

An official NHS Supply Chain case study has quantified the savings made by an NHS Trust from adopting Creo Medical’s Speedboat device to perform Speedboat Submucosal Dissection (SSD) in comparison to surgical alternatives. In total, the net cash saving from 130 SSD procedures for the NHS Trust was calculated at £687k, including savings from reduced length of hospital stay and reduced theatre costs. Notably, these savings did not include the patient and financial benefits associated with reduced

Morning Note – 24 April 2024

Warpaint London+ (W7L, House Stock at 375p) - Trading ahead of expectations - +10% upgrade implied

Hybridan Small Cap Feast - 22 April 2024

22nd April 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 Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Cambridge Nutritional Sciences - H1 2024 interims: Executing a newly focussed st

Cambridge Nutritional Sciences (CNS) has published its H1 2024 results to end September 2023. Group revenues grew 44% to £4.9m and gross profits increased by 63% to £3.1m, with the company benefitting from newfound operational efficiencies. With its now streamlined strategy focussing on the core Health & Nutrition business and the initial signs of an encouraging uptick in sales momentum, we believe the company is well positioned for growth that will help create future value for shareholders. We

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

e-therapeutics - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

Morning Note – 8 April 2024

Venture Life Group - Strong organic growth; focus on EBITDA

Venture Life has reported FY23 results to December 2023, following the February trading update. Revenues grew 17% in the year to £51.4m (our est. £50.7m) and adjusted EBITDA was £11.6m (our est. £11.6m). Cash conversion was 85%, generating £9.8m of cash from operations. Cash generation and no M&A in 2023 allowed the company to de-lever, closing FY23 with net debt to adjusted EBITDA at 1.3x. Management have focused on growth with three therapy areas generating double-digit revenue growth and onli

Hybridan Small Cap Feast - 17 April 24

17th April 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 Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Shield Therapeutics - FY 2023 TU; total revenues in line but Accrufer scrip revi

Total reported revenues and other income were $17.5m (our forecast $16m) in 2023 vs $5.5m in 2022. The composition of that revenue was different to our expectations such that Accrufer US revenues of $11.6m compared with $3.6m in 2022 but came in below our estimate of $13.6m. In the release, the company has noted that the methodology used by the third-party data provider for US Accrufer scrips has resulted in an overstatement for 2023. Revised figures for 2023 have been given showing 77,000 total

ANGLE: Building content to drive widespread adoption

ANGLE’s investment case rests on where Parsortix’s position in mainstream cancer diagnostics eventually lands. The place of liquid biopsies is now established and, increasingly, the additional clinical value that CTC (circulating tumour cells) assays bring is becoming clear. Addressing the many, varied opportunities directly is challenging and time consuming, with numerous barriers to overcome. Management is creating industry awareness through its demonstration and acceleration activities, which