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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Air Partner has reported a record H1 performance, with PBT increasing by 250% to £10.5m. This was driven by COVID-19 related work, in particular repatriation flights and transportation of PPE, which offset more challenging trading conditions elsewhere. Air Partner’s diversity has insulated it from the significant COVID-19 impact felt elsewhere in the sector. As expected, COVID related work has slowed down in H2, though there have been some early signs of improvement in Private Jets (number of JetCards sold +50% YoY) and Safety & Security (multiple contract wins in Redline). Given continued subdued demand, gross profit has reduced YoY in Q3 to date, though this was offset by cost initiatives. We reintroduce forecasts for FY21, assuming PBT of £10.5m, which implies break even in H2. The balance sheet remains strong, with net cash of £18m and the Board has proposed an interim dividend of 0.80p.
Companies: Air Partner Plc
Studio’s continued impressive sales performance in H120, despite the resumption of competitor trading on the high street, leads management to expect PBT from continuing operations (excluding Education) for FY21 will be ahead of its own internal expectations (there is no external management guidance). The company has a strong comparator for the upcoming key trading period to December, therefore the growth rate is likely to moderate. Its long-term targets of three million customers (versus current 2.1 million) and revenue of £1bn (versus FY20 revenue of £434.9m) as the shift to online retail continues suggests an attractive medium-term growth profile.
Companies: Studio Retail Group Plc
Angling Direct has achieved scale over the last 5 years and proven its multi-channel credentials. Under new leadership it is now being professionalised, and margin/profit weakness (notably online) is a key focus. Early signs are encouraging. With a fishing renaissance post covid, ANG is very well placed to deliver profitable and sustained growth over the medium to long term in highly fragmented markets. For these traits, valuation is extremely undemanding, and upcoming results are a possible catalyst.
Companies: Angling Direct Plc
Alongside its AGM, STU has released an impressive update on trading. Notably, growth has strengthened in the last 6 weeks vs the preceding 8 weeks. After an exceptionally strong start due to lock-down, product sales are therefore up 39% in H1. FS income growth was 5.5% and, with no material change in collections/arrears, this could accelerate in H2. It has exited with a clean (spr/sum) stock position and starts H2 with 15% more customers. This performance means PBT is expected to be ahead of management’s expectations, albeit guidance remains withdrawn. Findel Education’s trading has returned to normal levels too, and the two parties are still working closely with the CMA to obtain clearance.
Buyout rumours pushed William Hill’s stock price up 43% on 25 September, driven by initial speculation, and later confirmation that the firm had received acquisition proposals involving cash deals from Apollo Management International and Caesars Entertainment. While we believed a price of 300p+ was unlikely, fresh details about Caesars’ bid validate our initial thoughts. Moreover, we believe Caesars will emerge as a successful bidder. Hence, we will raise our target price to converge to the potential deal price of 272p.
Companies: William Hill Plc
Dart Group has released an AGM statement this morning indicating satisfaction with load factors and financial performance achieved year-to-date in the context of the challenging operating environment. In addition, the Group has applied to change its name to Jet2 Plc in recognition of the recent sale of the Fowler Welch distribution business and the sole focus on leisure travel. We keep our forecasts withdrawn at this time.
Companies: Jet2 Plc
Dixons Carphone has announced a strong trading performance for the 17 weeks ended 29 August 2020. The momentum was led by the online format (+124% yoy) which accounted for c.40% of total electrical sales. We also note the company’s success in gaining market share in the operating geographies. We believe DC is well placed to maintain lfl growth in the remainder of the year. No change in the stock recommendation.
Companies: Dixons Carphone Plc
New management has put in place a strategy which the February interim results revealed was returning the group to growth with very encouraging LFL statistics and attractive returns on refurbished outlets. In March, however, in response to COVID-19 and following UK Government guidelines, all venues had to be closed.
Management initiatives have materially reduced the cash burn while the group is unable to trade, and the group’s lender has been very supportive in significantly increasing the borrowing facility.
Management is now proposing an equity issue, the rationale for which is to strengthen the leverage ratio to create a more appropriate capital structure moving forward, to allow an immediate return to the estate refurbishment programme and to be able to potentially take advantage of strategic opportunities as they arise as the sector emerges from the COVID-19 crisis.
Companies: Revolution Bars Group Plc
Vertu has reported robust trading across the month of July, building on the strong trend seen over June. A July adjusted PBT of £7.4m (including £0.7m of restructuring costs) is ahead of both management expectations and the Group’s pre-Covid business plan, as ongoing pent up demand continues to drive a strong performance across new and used vehicle sales and aftersales services. The strong trading delivered since the majority of dealerships reopened on 1 June, alongside government support means the Group has generated an adjusted PBT of £2.2m YTD. This impressive performance looks set to continue into the crucial plate change month of September, where the Group’s new car retail order books are currently 20% ahead of prior year.
Companies: Vertu Motors Plc
Results are marginally ahead of expectations. The IFRS9 impairment for covid is £20m, partly offset by an in-year gain of £3.7m. Both the gross and net impairments are better than feared, and debtor performance remains stable. Trading so far in FY21 has been strong at Studio with product sales +42% and total sales +30%. The business is benefiting from operating leverage, especially in marketing. With net bank debt now just £35m, and Education trading starting to normalise, the business is in a strong position. This is not factored into the share price which has barely moved since the pandemic started.
In the context of a CV19 impacted H1, today’s interims are pleasing. The main positive news is that trading in the last 12 weeks since re-opening has been relatively strong – revenue back at 80% of pre CV19 levels. This is one of the stronger prints we have seen in the sector, reflecting the local / wet led nature of the City offering. 37 of the 48 sites are reopen, with closures mainly of those that are London biased. Streamlining and consolidating suppliers has fed through to an uptick in gross margins. There are also no major liquidity concerns with current headroom of c.£21m. In terms of new news, we note a strategic equity stake taken for £1.2m in a business called Mosaic Pub & Dining. This gives future optionality we feel. Forecast guidance remains suspended but with the H1 EBITDA loss at -£1.2m, City needs to lose -£1.8m in H2 to hit our -£3.0m FY20 forecast. Given the positive nature of current trading, forecast risk is on the upside we feel. Christmas trading will be important but in the absence of a full lockdown, management are sanguine around this. The shares trade on an attractive FY21 P/E of 14x; 8x EV/EBITDA with a c10% FCF yield and NAV >100p. Ultimately we expect City to emerge as one of the winners from the current sector malaise. The tenor of today’s interims is supportive of our Buy stance on a 12 month view.
Companies: The City Pub Group Plc
GVC reported FY 19 sales growth of 3%, thanks to strong momentum in online (+13%), a decent showing in European retail (+5%) and a slower than expected decline in UK retail (machine revenue down 26% vs initial expectations of over -40%).
Pro forma EBITDA margin was down 10%, hurt by regulatory headwinds across multiple geographies. The company announced a final dividend of 17.6p/share.
Following the FY 19 performance, we do not expect any significant revisions in our estimates.
Companies: GVC Holdings Plc
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
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
GVC reported H1 20 revenue of £1.62bn, in line with its earlier trading update, while EBITDA, at £348.6m, was at the higher end of the provided range. However, given the COVID-19 uncertainty, the board has decided to withhold an interim dividend. Looking forward, management now expects FY20 EBITDA of £720-740m, which is ahead of our estimates as well as consensus. We will upgrade our FY20 estimates, to reflect both the encouraging H1 performance as well as the improved outlook.