Avingtrans has issued a brief trading update and confirmed that the Group’s preliminary results to 31st May 2020 will be published on 30th September. The trading update is reassuring, highlighting a Q1FY2021E order in-take in-line with management expectations. The statement also highlights two further contract wins in the nuclear sector for US$2.8m in South Korea to provide spare parts for essential water service pumps and a £1.5m UK contract for replacement valves. The previous update in early July has already confirmed that the Group expects to report revenue of £114m, EBITDA of at least £11.5m and net debt (excluding IFRS16 lease liabilities) of £7.5m, which is incorporated into our FY2020E forecasts. It would seem likely that the Group will wish to re-instate forward guidance at the time of the results and to this end we would expect management to indicate a year of solid progress in EBITDA for FY2021E. Over the first quarter the Group has demonstrated good resilience, operating at close to normal levels, with the exception of Oil & Gas (where there is fairly limited exposure) and HVAC activities at Ormandy, supported by exposure to multiple markets and a strong customer base that includes governments and their agents.
Companies: Avingtrans Plc
Avingtrans (AVG): Corp | Bango (BGO): Corp | Elixirr (ELIX): Corp | eve Sleep (EVE): Corp | Evgen Pharma (EVG): Corp | Maintel (MAI): Corp | President Energy (PPC): Corp
Companies: AVG MAI PPC EVG BGO EVE ELIX
Guild Esports a UK-based owner and developer of esports teams, has announced its intention to seek a listing of its ordinary shares to the Standard Listing segment of the London Stock Exchange this autumn. its founding shareholders include David Beckham, former football player and captain of England, and now co-owner of new MLS team Inter Miami CF.
HOME REIT intends to float to the Main Market raising up to £250m. The Company will seek to contribute to the alleviation of homelessness in the UK, whilst targeting inflation-protected income and capital returns, by investing in a diversified portfolio of assets across the UK which will be dedicated to providing accommodation to the homeless. Due Mid October
S-VENTURES - The Company will look to identify investment opportunities in the wellness sector within the UK and Europe. Due 16 Sep on the Aquis Exchange.
Sativa Wellness Group—(Canadian Securities Exchange: STIL) renamed from Stillcanna Inc following the conditional acquisition of Sativa Group (AQSE:SATI) to list on the AQUIS Exchange. A fully integrated European seed to consumer CBD group with the pricing, products, and stability to meet the CBD market demand in the medium term. With world-class extraction and formulation experts, an agricultural team that has over 20 years’ experience farming hemp, along with laboratory testing capabilities, the group has established itself globally as a trusted source of high-grade, premium wholesale CBD brands and products.
Umuthi Healthcare Solutions Plc, the technology led healthcare business focused on the distribution of pharmaceuticals and the provision of medical facilities in remote areas, seeking admission to the Standard Listing segment of the Official List
The Hut Group. Expected intention to float on the Main Market. THG is a vertically integrated digital-first consumer brands group, retailing its own brands in beauty and nutrition plus third party brands, via its proprietary technology platform to an online and global customer base. For the year ended 31 December 2019, THG's revenue was £1.1 billion, up 24.5 per cent. year-on-year, and its Adjusted EBITDA was £111.3 million, representing an Adjusted EBITDA margin of 9.8 per cent . The Company has experienced an acceleration in growth during 2020, with revenue of £676 million, up 35.8 per cent. on the equivalent prior year period , achieved in the 6 months to 30 June 2020, which the Directors believe evidenced the non-discretionary nature of the nutrition and beauty categories .
Kibo Energy PLC, the multi-asset Africa focused energy company, is seeking admission for its 100% owned UK subsidiary Sloane Developments Ltd , which will be renamed Mast Energy Developments PLC (MED), to the Standard List of the London Stock Exchange plc . Targeted for Q4 2020. The MED business strategy is to acquire and develop a portfolio of flexible small-scale power generation assets, exploiting a growth niche market in the UK for Reserve Power generation to balance out the national grid at critical times.
Companies: SYM GLR THR TMT AVG BONH DIS BIDS BKS EVG
The group has issued a trading update for the year ended 31 May 2020 highlighting an adjusted EBITDA of at least £11.5m which is close to the group’s original expectation, despite widespread disruption to operations in the second half. The statement notes ample liquidity headroom in excess of £10m with net debt (excluding IFRS 16 lease liabilities) reducing in H2 to £7.5m as planned. The Group’s order book and prospect pipeline remains strong overall and the update is accompanied by the announcement of two meaningful contract wins in the nuclear sector. A further significant positive development is the grant of outline planning permission for the conversion of the group’s 7 acre Hayward Tyler site in Luton into residential housing for up to 1000 dwellings. Whilst financial guidance for FY2021E remains withdrawn at this point due to on-going uncertainties around the impact of COVID-19, we see the group continuing to demonstrate good resilience, operating at close to normal levels, supported by exposure to multiple markets and a strong customer base that includes governments and their agents.
Altitude Group (ALT): Corp | Avingtrans (AVG): Corp | LPA Group (LPA): Corp | Open Orphan (ORPH): Corp | PCI Pal (PCIP): Corp | Photo-Me (PHTM): Corp
Companies: ALT AVG PHTM PCIP LPA ORPH
The year-end trading update was encouraging, with expected results showing good YoY growth, modestly below but close to our earlier expectations. Trading has been resilient, particularly in safety critical areas such as its nuclear exposure, with some weakness being seen in oil & gas, where there is limited exposure. Two new contract wins in the nuclear sector have also been announced today. FY 2021 forecasts remain under review. With strong finances, the company is well positioned to maximise M&A opportunities, through its PIE strategy.
The group has issued a trading update confirming that it believes that results for the year to May 2020 will be broadly in line with previous management expectations for revenue and profit, and that net debt is also expected to be no greater than previous guidance. The statement notes that despite the impact of COVID-19, many parts of the Group are continuing to operate as normal and to benefit as previously disclosed from a robust order book and prospect pipeline. Prudent measures are nonetheless being taken as necessary to reduce costs and mitigate disruption effects. The Group notes business progress has been affected by travel restrictions, lockdowns and supply chain disruption and as a result 20% of employees have been furloughed. China operations are back to normal and some sectors – medical, nuclear and defence are relatively unaffected as expected. The statement notes facility headroom of £8m and steps taken to conserve cash, including cancellation of the interim dividend. Guidance is withdrawn for FY2021E. In our view the experience of the management team leaves the Group in a strong position to weather events and to respond further if necessary. Once the crisis passes there should be opportunities for the Group to further implement its successful Pinpoint-Invest-Exit strategy.
Avingtrans (AVG): Corp Covid-19 update | Chariot Oil & Gas (CHAR): Corp Restructuring to last | Omega Diagnostics (ODX): Corp COVID-19 antibody test – part of consortium
Companies: AVG CHAR ODX
The group’s Covid-19 trading update provides some comfort on trading, with a strong order book and the majority of sites operating near normal. Cash conservation efforts appear sensible, including the cancelation of the Interim dividend, while their balance sheet remains strong. FY20 is trading broadly in line with expectations, with FY21 forecasts withdrawn. The group looks in a stronger position than many, with PIE opportunities emerging in due course.
First half results leave the group well placed to meet full year expectations. The statement highlights good progress in integrating Booth Industries and Energy Steel, significant new business wins that support Group results and provide good longer–term visibility, and a limited P/L impact from the first time adoption of IFRS16. Overall management remain optimistic about future prospects and the realisation of value consistent with the Group’s PIE (‘Pinpoint, Invest, Exit’) strategy. Whilst forecast EPS remains unchanged, net debt increases from £2m (FY2019) to £16.6m (FY2020E) due to acquisitions and injection of working capital as expected, and £8.9mE for IFRS16.
Avingtrans (AVG): Corp | Revolution Bars Group (RBG): Corp
Companies: Avingtrans Plc Revolution Bars Group Plc
Interim results show good underlying progress in the period and signal that the group is on track for full-year expectations, with only a limited risk currently seen from coronavirus. We make only minor changes to forecasts associated with the adoption of IFRS16, which leaves EPS unchanged. We slightly increase our price target from 300p to 315p, based on a targeted 2021 P/E of 15.5x and EV/EBITDA of 7.8x (pre-IFRS16 basis). The shares have seen a decent run recently, placing them fairly close to our price target. Recent acquisitions mean EPS-based targets tend to undervalue the group with potential for either further acquisitive activity or unlocking value through disposals acting as a share price catalyst.
Avingtrans has issued a trading update confirming that the group has continued to perform well in H1 FY2020E and is trading in-line with market expectations. The order and prospect pipeline are noted as being robust and the recent acquisitions of both Booth Industries and Energy Steel are integrating well and recovering from the distressed positions that they were in at the time of their purchase in June 2019. We make no changes to our estimates ahead of the interim results which will be published on 26th February.
Avacta (AVCT): Corp | Avingtrans (AVG): Corp | Europa Oil & Gas (EOG): Corp | Surface Transforms (SCE): Corp
Companies: AVCT AVG EOG SCE
Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale. The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m. Due 28 February. Investment firm Nippon Active Value fund is seeking to raise up to £200m at an issue price of 100p per share via an IPO. The company aims to invest in a portfolio of quoted Japanese stocks with market capitalisations of up to $1bn. First day of dealings expected early February.
Companies: VRP TERN HMI QTX IND DXRX ERGO FARN AUG AVG
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Strix has announced the strategic acquisition of LAICA a family owned business in Vicenza, Italy for €19.6m in a mixture of cash and shares. It will be earnings accretive in FY21 and is scheduled to complete by the end of FY20, with just Italian government approval outstanding. ZC operating profit estimates are unchanged in FY20 but increase by c. 8% in FY21 to reflect the contribution from the deal, the impact on earnings is smaller due to the issue of shares and higher tax in Italy. Management believe significant synergies, both cost and revenue, will be derived from the deal over the next 2-5 years. The interim results had been well flagged in the comprehensive trading update in late July and today’s statement confirms that profitability remains in line with the guidance of achieving a flat performance yoy in FY20. The interim dividend of 2.6p is in line with last year and in keeping with the commitment to at least meet the 7.7p paid in FY19. Unlike most peers, Strix has maintained guidance as well as its commitment to pay a dividend and today’s acquisition unpins the continuing strategy of diversifying the business into areas offering greater growth.
Companies: Strix Group Plc
Augean has reported interims to 30 June 2020. With the first half bearing the full impact of Covid-19, adjusted PBT decreased by 11% to £8.5m, which is in line with our expectation. With radioactive wastes, biomass for EfW and construction impacted by lockdown and depressed activity levels in its North Sea services, due to the low oil price, the results demonstrate the resilience of the Group and also the benefit of its key position in its markets with strategically located hazardous waste treatment and disposal facilities in the UK. Whilst the statement highlights that full year results are expected to be broadly in-line with market expectations, we have conservatively reduced forecasts. Nevertheless, with strong cash generation and sustained growth EV/EBITDA falls to 5.3x and 4.1x for FY21E and FY22E, a level that is substantially below sector constituents and transaction valuations.
Companies: Augean Plc
Judges Scientific is focused on acquiring and developing companies in the scientific instrument sector. Given the backdrop of H1, and the global nature of Judges' customer base, we see this morning's results as a significant achievement when set against the backdrop of significant COVID related headwinds. Revenue decreased by 6.8% (organic -12%) to £37.4m (H1-19: £40.2m) which, after the sensible management of the cost base, yielded an adjusted pre-tax profit of £6.4m (H1-19 £8.4m), a 22% reduction, and adjusted fully diluted EPS of 82.5p (H1-19: 107.0p). However, reflecting a commitment to its progressive dividend policy, and confidence in the business, the interim DPS is increased by 10% to 16.5p. With respect to H2, COVID related business risks remain, none of which are unique to Judges. However, given the relative strength of H1 (albeit at some expense to the order book), management flag ‘cautious confidence' in achieving full year market expectations. As such, our FY 2020E adjusted PBT and EPS estimates are unchanged this morning.
Companies: Judges Scientific Plc
Inspiration Healthcare has announced it has completed its final delivery of ventilators to the NHS in response to the COVID-19 outbreak, which were announced in March 2020. In total the company has now shipped ~£7m of ventilators, of which £5m relate to Inspiration Healthcare's direct contracts and ~£2m relate to orders to S.L.E., which was acquired in July of this year. These £7m of orders do not include revenues associated with the ventilator support service or ancillary orders received since March. We maintain our Buy recommendation.
Companies: Inspiration Healthcare Group Plc
Brickability has delivered on its promises with inaugural full year (to Mar-20) results that demonstrate EBITDA and profits growth, establish a base level of dividend, show good cash generation and of course its ability to make acquisitions and build a future pipeline. The impact of COVID-19 will be fully felt in the current year, inevitably setting earnings back although it has traded profitably at EBITA level in every month since April reflecting progressive sales recovery (June -17%, July +1.6%) and the low fixed cost base. The group is not yet ready to offer formal guidance for FY21 however the strategy outlined at IPO is very much intact and deliverable. With the shares over 40% below their post-IPO ‘high' yielding an historic 4.4% plus an EV/EBITDA of 5.3x and PE of c8x, both of which are re-attainable 2-3 years out, the valuation simply looks too cheap to ignore, especially versus its peers.
Companies: Brickability Group Plc
Billington is a leading structural steel and construction safety solutions specialist. The Group has this morning announced that its structural steel division, Billington Structures, has been awarded three contracts with a combined value of £21 million, the largest of which is for a UK power based project (Midlands) that will add significant visibility (at good margin) to FY 2021E. The other two contracts, in the manufacturing and commercial office sectors, are for delivery in Q4 2020 and through 2021 respectively.
Companies: Billington Holdings Plc
Today’s AGM Statement highlights further progress during H1. As anticipated at the final results on 6th August, trading has now returned to pre-COVID levels, with a particularly strong recovery in housing market activity. As at 31st August, the order book has increased by 5% to £69.4m from £66.2m at 31st, with contracts secured across the Group’s end markets. The Company has invested in its sales team and back office functions in order to support the recovery, though management continues to monitor costs given the near term uncertainty presented by COVID-19. In the absence of more restrictive lockdown measures, we would expect activity to continue to improve in the near term and the medium term prospects of the Group remain encouraging, supported by the UK’s net-zero target, which will require substantial investment in the UK’s utility networks. Fulcrum has also announced the appointment of Jennifer Cutler as CFO from 19th October, whose most recent role was Direct of Finance at Harworth Group Plc. The shares have justifiably outperformed since the full year results and today’s statement is supportive of this increase. Forecast guidance continues to be withdrawn given near term COVID uncertainties, but we anticipate reintroducing forecasts at the interim results.
Companies: Fulcrum Utility Services Ltd.
Who would have thought when reporting pre-tax losses of £10m after the first half to end June that Breedon would emerge so strongly from lockdown to trade through July-August (and into September) with LFL revenues ahead of comparative 2019 and expected H2 EBIT broadly in line with the equivalent 2019, resulting in a reinstatement of guidance ahead of current FY20 consensus. That is a mark of confidence as much in the group's operating capabilities as market recovery itself – a feature of Breedon's management quality over a consistent period of time. Investors will be impressed by the short-term recovery but also encouraged that the longer-term outlook remains positive with an emphasis to infrastructure markets in GB and Ireland plus, of course, its unrivalled ability to utilise its asset base very efficiently and to add to that platform with accretive acquisitions. The shares hit a COVID ‘low' of 63p but were trading as high as 100p in February. We would see that upper level as the more likely direction of travel for the shares with 90p justified by a forward 2022E rating of 7.5x EV/EBITDA, c14x PE, commencement of dividends and significant deleveraging through high net cash flow generation.
Companies: Breedon Group Plc
Overall performance shows resilience to the impact of COVID-19, with comprehensive restructuring and a focus on recurring, software-driven, revenue streams. H1’21 revenue grew 2.3%YoY (normalised basis) to £6.4m. Checkit UK, acquired on 24 May 2019, contributed 2.5 months of earnings, in H1’20 equivalent to £6.2m on an annualised basis. Notably, gross profitability improved significantly from 21.9% at July 2019 to 35.9% by July 2020. Checkit reorganised into two divisions: Checkit Connect, providing workflow management (CWM), automated monitoring (CAM), and building management services (CBM); and Checkit BEMS, responsible for building installation and maintenance projects. Checkit Connect contributed 53% of H1’21 revenue, growing 15%YoY (normalised), of which 68% was recurring, growing 23%YoY. Checkit Connect is the focus of a SaaS-based products and services business model; its recurring revenue base contributed almost 100% of divisional growth, driven by firmed pricing and a major contract. Checkit BEMS revenue declined 9%YoY (normalised) reflecting the impact of COVID-19 in limiting on-site access. Checkit’s operating loss was reduced from £2.9m in H1’20 to £1.5m, or £2.0m inclusive of exceptional items (H1’20: £3.1m loss). Investment in development was maintained, at £1.0m in H1’21 compared to £1.2m a year earlier. Elektron Eye Technology (EET) was sold in July for £0.9m, paid over 24 months. The cash position as of 31 July was £13.4m, compared to £14.3m on 31 January.
Companies: Checkit Plc
DX has reported good progress in FY 2020 given the impact of COVID-19. Sales were up +2% (H1 +8%, H2 -4%) and adj. PBT increased from a loss of -£0.2m in FY 2019 to a profit of £1.8m (IAS 17) or £0.3m (IFRS 16). This is a better result than our forecast of a loss of -£0.9m (IFRS 16) and was backed by strong cash flow resulting in net cash of £12.3m at June 2020. The outlook is positive, with management highlighting volumes are currently ahead of pre COVID-19 expectations, and the group is in a strong position to rebuild profitability, by improving efficiency, productivity and margins. We have upgraded FY 2021 EPS by 124%, FY 2022 by 63% and raised our target price from 18p to 29p.
Companies: DX (Group) Plc
Interims to July are consistent with an earlier update and demonstrate a robust performance, with LFL sales +2% to £6.4m. Looking deeper, momentum continued into Q1, following a strong FY20, with 1Q21 LFL sales: +13%. Meanwhile, Covid’s impact was greater in Q2, as sales fell 11%. Notwithstanding, CKT’s SaaS division (‘Checkit Connect’) grew throughout H1: +15% to £3.4m, now 54%/sales. Management‘s response to macro uncertainties has been proactive and costs tightly managed. A lower adj. operating loss reflects this: £-1.5m (PY: £-2.9m) as does FCF: £-1.4m after strong working capital management. Closing net cash remains very strong at £13.4m. July‘s disposal of EET will add to cash resources – £0.9m consideration is due over 2 years. Despite costs receiving close attention, product development continues at pace and is driving opportunities, particularly within resilient sectors - we view ‘Healthcare‘ as one and is now a strategic focus for the Group. It is also positive to hear market activity is resuming in other sectors too, and a reintroduction of forecasts reflects our confidence. FY21E sales: £13.1m, so we anticipate modest sequential H1/H2 growth or +2% LFL for the full-year. FY21E AOP £-3.8m i.e. £-2.3mE in H2, as government support measures winddown. Closing cash should remain strong (£10.1mE), leaving significant resources for future periods. While early in the company’s transition (so full potential is hard to grasp) we continue to be impressed with progress to date: new product innovation has led to significant deals and in-turn has generated strong ‘recurring‘ growth. Meanwhile, we think CKT’s valuation (<2x EV/sales) reflects an overly cautious assessment of this progress and future opportunities.
As legendary investor Warren Buffet succinctly puts it: “it is better to buy great companies at fair prices, rather than fair companies at great prices”. Today, we think Mpac has done exactly that by acquiring Ohio based Switchback Group, Inc. for a maximum of $15m in cash (£11.4m). Equivalent to modest takeover multiples of 7.1x EV/EBIT and 1.1x EV/sales – with $13m of the consideration paid upfront, and the rest structured as a $2m earnout depending on EBITDA performance over the next 24 months.
Companies: Mpac Group Plc
Seeing Machines has announced plans to deliver a fully supported, integrated Driver Monitoring System (DMS) kit to the global automotive industry. This will be in the form of embedded software (e-DMS) for the Qualcomm® SnapdragonTM Automotive Development Platform (ADP) from Qualcomm Technologies. The kit is expected to be available before the end of this calendar year for use by select automotive Tier 1 suppliers and OEMs and will support a full stack Seeing Machines DMS solution on the Snapdragon™ ADP targeting integration into either infotainment or centralized ADAS systems, and includes an optimized DMS reference camera, ADP interface board and the company's FOVIO and Occula software.
Companies: Seeing Machines Ltd.
Interim results highlight the impact to the business from the nationwide lockdown that started in late March and began to ease in mid to late May. Within today’s results, the outlook statement is probably of most interest. The strong demand highlighted in the trading update in July has continued through August and into September. With the balance sheet in a strong position, post the fund raise, demand firmer than expected and national competitors struggling, Safestyle is in a good position. The recovery had been well underway until the COVID-19 lockdown interrupted operations but Safestyle has come through it in a position to capitalise on good market demand and weak competitors. Revenue numbers for FY20 increase marginally to c. £110.0m but profit forecasts are unchanged. The level of order intake has outstripped the short-term capacity to install orders leaving the order book 82% higher yoy, indicating that the run rate into FY21 should be positive in terms of forecasts.
Companies: Safestyle UK Plc
eEnergy is a pioneer of “energy as a service” in the UK and Ireland. Its compelling proposition offer schools and businesses modern, energy efficient lighting with no up-front capital cost. The upgrade comfortably pays for itself, with the customers’ cost savings more than offsetting ongoing service fees from day one. The core business is well established and growth is rapidly accelerating. eEnergy joined AIM via RTO earlier this year in order to accelerate its organic and acquisitive growth plans. There is an attractive pipeline of M&A opportunities in place, in particular within energy management, which we expect to form an important pillar of the Group’s medium term growth strategy. A forward looking rating based on peer group multiples (c.13x Dec’22 P/E) would value eEnergy at c.12p per share.
Companies: eEnergy Group Plc