Gfinity plc* (GFIN.L, 2.325p/£11.1m) | ECSC Group plc* (ECSC.L, 115p/£10.5m) | Mi-Pay Group plc* (MPAY.L, 1.15p/£0.5m) | MTI Wireless Edge Ltd* (MWE.L, 39.5p/£34.7m)
Companies: GFIN ECSC MPAY MWE
Mi-Pay Group plc* (MPAY.L, 1.65p/£0.8m) Proposed disposal and cancellation of trading (18.12.19) | Audioboom plc* (BOOM.L, 207.5p/£29.1m) Appointment: CEO appointment formalised (20.12.19)
Companies: Mi-Pay Group (MPAY:LON)Audioboom Group PLC (BOOM:LON)
MTI Wireless Edge plc* (MWE.L, 35p/£30.7m) | ECSC plc* (ECSC.L, 92.5p/£8.4m) | Brave Bison plc* (BBSN.L, 1.42p/£8.7m) | Mi-Pay plc* (MPAY.L, 6.25p/£2.9m) |
Companies: MWE ECSC BBSN MPAY
Audioboom plc* (BOOM.L, 177p/£24.9m) CEO resignation (30.09.19) | Mi-Pay Group plc* (MPAY.L, 7.0p/£3.2m) Interims: Breakeven in H1; outlook remains mixed (25.09.19) | Tern plc* (TERN.L, 8.4p/£21.3m) Interims: Growth at portfolio companies (25.09.19) | Starcom plc* (STAR.L, 1.6p/£5.5m) Litigation update (30.09.19)
Companies: BOOM MPAY TERN STAR
Interims from Mi-Pay Group, an established provider of digital payment and payment fraud managed services to Tier 1 mobile operators and digital content vendors, saw 7% revenue growth, a small improvement in gross margin and good cost control. As a result, the business was essentially EBITDA break-even in H1. Fully management payments grew 15% to £58.1m and a 64% increase in its direct managed fraud service to £29.2m. As this latter service has matured, fraud levels have reduced materially improving gross margins. Mi-Pay continues to have sector-leading levels of payment success and fraud management and indemnifies its customers. As a result, it can charge higher rates than traditional payment solutions. Extensions have been signed with two of its largest (43% of FY18 revenue) but it is losing its second largest client (13%). This, coupled with the uncertainty around the new PSD2 regulations and general economic climate, means H2 is likely to be similar to H1 but we leave our forecast under review at this stage.
Companies: Mi-Pay Group
MTI Wireless Edge Ltd* (MWE.L, 22.2p/£19.4m) | Blackbird plc* (BIRD.L, 10.8p/£31.2m) | Mi-Pay Group plc* (MPAY.L, 8p/£3.7m) | Starcom plc* (STAR.L, 1.25p/£4.3m) | Character Group (The) plc* (CCT.L, 425p/£90.8m) |
Companies: MWE BIRD MPAY STAR CCT
Mi-Pay Group plc* (MPAY.L, 12.25p/£5.6m) Finals: Move into H2 profit; renewals provide visibility (24.04.19) | Mirada plc* (MIRA.L, 0.825p/£7.3m) Pre-close: substantial FY19 growth and positive outlook (29.04.19)
Companies: Mi-Pay Group (MPAY:LON)Mirada PLC (MIRA:LON)
Finals from Mi-Pay Group, an established provider of digital payment and payment fraud managed service to Tier 1 mobile operators and digital content vendors, were in line with forecasts and January’s trading update. The 9.4% increase in revenue to £3.3m included a maiden £0.3m contribution from its Fraud Services business and the combination of increased gross profit (+£0.1m) and lower operating costs (down £0.3m) resulted in the operating loss reducing £0.4m to £0.2m and the company was profitable in H2. Mi-Pay processed more than £100m in fully managed payment transactions for the first time and indemnified £44m of payments against fraud - this is opening a new revenue stream. Mi-Pay was successfully integrated into 3 Ireland’s new infrastructure during the year and the acquired O2 customer base was transferred onto MiPay. Since period end, Mi-Pay has signed extensions with clients that represented 43% of FY18 revenue providing forward revenue visibility. We maintain our fair value of 17.8p/share, a 51% upside.
ECSC Group plc* (ECSC.L, 92.5p/£8.4m) Contract wins: Further Managed Service success (16.04.19) | Mi-Pay Group plc* (MPAY.L, 11.75p/£5.4m) Contract extension: Largest customer extended (18.04.19) | Starcom plc* (STAR.L, 1.275p/£3.7m) Placing (18.04.19) | Mobile Tornado Group plc* (MBT.L, 5.25p/£18.3m) Finals: Success of new Capex model (17.04.19) | CAP-XX Ltd* (CPX.L, 4.35p/£14.1m) Trading update: Progress on numerous fronts (16.04.19)
Companies: ECSC MPAY STAR MBT CPX
Audioboom plc* (BOOM.L, 1.675p/£19.7m) Additional funding to secure new and existing podcast content (25.02.19) | Mobile Tornado plc* (MBT.L, 3.3p/£11.5m) FY pre-close: In line performance; commercial & technological progress (20.02.19) | Mi-Pay Group plc* (MPAY.L, 10p/£4.6m) Contract extension and notice of FY results (21.02.19) | Tern plc* (TERN.L, 13p/£30.8m) Second tranche of convertible loan to Device Authority (20.02.19)
Companies: MBT MPAY TERN BOOM
Mi-Pay Group plc* (MPAY.L, 9.7p/£4.4m) Pre-close FY18 trading update: Shift to digital (30.01.19) | Gfinity plc* (GFIN.L, 5.7p/£20.7m) Contract win: 2019 Call of Duty World League event (04.02.19) | Newmark Security plc* (NWT.L, 0.9p/£4.2m) Interims: Positive performance in Electronic Division (31.01.19) | Starcom* (STAR.L, 1.5p/£4.4m) Trading update and receipt of funds (31.01.19)
Companies: MPAY GFIN NWT STAR
Mi-Pay is an established provider of digital payment and payment fraud managed services to Tier 1 mobile operators and digital content vendors. It offers incremental value-added services including the management of multiple connection methods, the delivery of the payments experience and the security of client data. Mi-Pay has sector-leading levels of payment success and fraud identification and management and indemnifies its customers against fraud. It charges higher fees compared with traditional payment companies as its deeper solution offering is layered on top of core payment solutions. Today’s in-line pre-close demonstrates further revenue growth and a move into EBITDA profit in H2. We are trimming our FY19 revenue growth assumptions (by c. 10%) given the current uncertain macro outlook but still expect Mi-Pay to achieve stronger growth rates going forward as the platform and client base are now established. The current share price fails to reflect the strength of the existing offering or the growth potential as e-commerce and digital channels become core to customer engagement. We set a fair value of 17.8p/share, an 84% upside.
Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m. Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb. Mkt Cap c.£185m. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected late January 2019. Chaarat Gold Holdings—RTO, the Company intends to acquire Kapan Mining and Processing CJSC, which owns the Shahumyan medium-sized polymetallic mine in Kapan in the Republic of Armenia. No raise, market cap of £110.1m, due early Feb
Companies: JHD RNWH MPAY ZNWD STM R4E ING TRMR RWI KDNC
Mobile Tornado Group plc* (MBT.L, 4.40p/£15.4m) Interims: Gathering sales momentum (27.09.18) | Mi-Pay Group plc* (MPAY.L, 10.0p/£4.6m) Interims - New revenue stream added (25.09.18) | CAP-XX plc* (CPX.L, 10.85p/£32.6m) Spire Health Tags stocked at Apple stores (25.09.18) | Mirada plc* (MIRA.L, 0.725p/£2.1m) Prelims: Accelerated roll out by izzi and imminent ATNi deployment (28.09.18) | Osirium Technologies plc* (OSI.L, 145p/£19.6m) Interims: Good financial and operational progress (25.09.18)
Companies: MBT MPAY CPX OSI MIRA
Mi-Pay, a provider of mobile payment and payment fraud management services to Tier 1 Mobile Network Operators (MNOs) and digital content providers, has reported interims with a further 11% growth in the total value of payment transactions to £50.2m as well as direct fraud management of an additional £17.8m - a new product stream that has considerable revenue potential. Mi-Pay has sector-leading payment success rates and fraud levels, indemnifies its customers against fraud and hence can charge 3x to 5x the rates compared with traditional payment companies. We expect Mi-Pay to break-even in H2 before moving into sustained profit and is sufficiently funded. The value of Mi-Pay’s existing offering and the growth potential is not reflected in the current price.
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The group has released a positive trading update, signalling a strong H2 and performance ahead of expectations. The new guidance points to a 6.7% upgrade to revenues and a 10.5% upgrade to EBITDA. Cash generation has been notably strong, at about $26m, which will drive an increase in supplemental dividends with a dividend yield of 7.1%. We raise our TP from 255p to 285p, based on a target P/E of 14x, giving decent upside to the current 11.6x.
Companies: Somero Enterprises, Inc.
Less than a fortnight after a major new contract announcement in West Africa, Capital has announced the expansion of its operations at Barrick Gold’s Bulyanhulu Gold Mine in Tanzania. The contracts include a five-year laboratory services contract for MSALABS, together with a two-year underground grade control drilling contract. Capital commenced operations at Bulyanhulu in February 2020, undertaking a deep hole delineation drilling program. The successful execution of this resulted in an expansion of services, with two underground rigs added to operations from May. The new contract will expand the underground fleet to four, utilising two rigs from the existing fleet and including the acquisition of a further two rigs.
Companies: Capital Limited
Management is delivering right on cue to its resumed guidance as per the 1 October trading update. H2 revenue recovery is back close to pre-pandemic levels and operating margins have returned to target 3% in quick time – and are sustainable at that level too. Having upheld dividends through this challenging period and actually extended the order book (up 17% YoY and also c3% higher than last reported), TClarke is firmly re-establishing a growth trend on arguably more solid foundations. The share price is 10% higher since the last trading update but in our view remains significantly undervalued against a prospective FY21E EV/EBITDA ratio of 3x, a PE of c6x, yield 4.6% and double-digit FCF yield.
Companies: TClarke plc
Trading to date in FY 2021 has been positive, with no sign of an adverse impact from the second national UK lockdown. Net new business across both divisions is described by management as encouraging and the new business pipeline remains very healthy. With volumes better than expected and margins improving DX is on track to perform materially better than market expectations and we have, consequently, upgraded FY 2021 EPS by 29% and FY 2022 by 15%, driven by stronger assumptions in DX Freight. We have also raised our FCF-based target price from 29p to 33p and reiterate our view that the group is in a strong position to rebuild profitability by winning new business and improving efficiency, productivity and margins.
Companies: DX (Group) Plc
We release prudent FY20E and FY21E forecasts as Xpediator continues to gain momentum and operations revert to pre-COVID levels. The Group has made strategic progress year to date. It has implemented a strict cost reduction programme which should drive annualised cost saving of over £0.5m, restructured and strengthened its management team and further integrated acquisitions. Additionally, it is in the process of consolidating its site portfolio, driving further costs out of the business. We believe the market continues to undervalue Xpediator's geographically diverse revenue base, flexible low fixed cost operating model and positive financial outlook. Accordingly, we move our recommendation from Under Review to Buy.
Companies: Xpediator Plc
Directa Plus has announced that in the October collaboration agreement with NexTech Batteries, it has achieved above 400 Wh/kg (watt-hours per kilogram, the usual measure of energy density) in a practical system. NexTech produced several full-scale pouch format cell prototypes using its proprietary cathode and electrolyte materials (with Directa plus graphene) producing 410Wh/kg of specific energy at a weight only slightly below 30g. For comparison, standard Lithium-Ion batteries have an energy density of 100-265 Wh/kg.
Companies: Directa Plus Plc
Xpediator has delivered a healthy trading update, breaking several revenue records during H2 2020. Furthermore, the outlook for FY21 remains promising, reflecting recovery to more normal levels in Transport Services, a full-year impact of the Nidd acquisition, the turnaround of underperforming businesses, and new ventures. The £6m PBT forecast for FY20 highlights an improving margin, albeit this represents a shortfall from FY18. In our opinion management actions, plus recovering markets, can take the Group to peak margins over the next 18-24 months: delivering a marked increase in profitability.
Volex has reported interim results that are in-line with expectations following a strong trading update in mid-October. Of far greater significance is today’s announcement of the proposed acquisition of DEKA for a consideration of up to €61.8m on a debt free basis. DEKA is a leading and highly profitable power cord manufacturer, strategically located in Turkey, that serves leading European white goods manufacturers. The acquisition should close in early CY2021, subject to expected Turkish Competition Authority approval. We foresee 15% earnings enhancement in FY2022E with further opportunities for revenue synergies with Volex in the Far East as its operations also vertically integrate, production efficiencies increase and the cost of production falls. The statement highlights that pro forma net debt/EBITDA remains under 0.4x and this provides scope for further bolt-on acquisitions alongside a new $70m RCF and $30m accordion, also announced with the interims.
Companies: Volex plc
Brick and concrete products group Forterra has raised its guidance for FY 2020E to above the current consensus range and reinstated dividends following trading in Autumn which exceeded its previous expectations and which has continued strongly despite the second lockdown. We have increased our FY 2020E revenue, EBITDA and EPS estimates by 3%, 14% and 46% respectively, and cut our net debt projection. We have introduced FY 2021E estimates showing further strong expected growth.
Companies: Forterra Plc
SThree has released a brief update ahead of the scheduled Q4 trading update expected on 12th December. The key headline is that an improving trading backdrop over the last few months has driven a better than expected profit performance. Market consensus was clearly too light with the company now guiding for an FY’20 outcome above the top end of the range of expectations. We have updated our forecasts accordingly and now look for FY’20 PBT and EPS of £28.1m / 13.3p respectively – a PBT upgrade of +53% on our previous estimate. Although the company has not formally reinstated full guidance, we are taking this opportunity to publish our estimates for FY’21. SThree has shown good resilience through this pandemic. The combination of STEM industry specialism and the inherently higher short term visibility of the contract focus has afforded SThree management a greater degree of flexibility when it came to aligning the necessary cost actions with the strategic ambitions of building market share in the key, global STEM markets. Costs and headcount have been cut, but they have been targeted and selective. The net result has been an increasingly positive tone in trading commentary, culminating in yesterday’s explicit upgrade. Has this been fully priced in by the market? To an extent yes, with the shares now standing +57% above the May 2020 lows and outperforming the peer group year to date. However, despite this outperformance (share price and operational) SThree still stands at a material valuation discount to its peers. We continue to find the extent of this valuation gap hard to justify.
Companies: SThree plc
The new ammendments to the UK CfD renewable energy support scheme opens up an opportunity for tidal energy to compete against floating offshore wind. We think the two technologies can deliver similar costs but that tidal, and specifically the already permitted capacity at Atlantis’s MeyGen site, has a marginal advantage in terms of readiness.
Companies: SIMEC Atlantis Energy Ltd.
President Trump likes to project himself as a highly successful businessman, but surprisingly little is known about his true financial position. Various articles, including a 2016 in-depth analysis by The Wall Street Journal, have speculated about his income and asset base. All sorts of claims and counter-claims have been made about his wealth – by Trump himself, pitching his fortune at some $9bn, and by journalist Timothy O'Brien, suggesting that it is as “low” as $150m-$250m. It is doubtful whether we shall ever know the truth, but we can use Trump’s UK corporate filings to gain an insight into his businesses in Scotland.
Companies: AVO ARBB ARIX CLIG DNL FLTA ICGT PCA PIN PHP RECI STX SCE TRX SHED VTA YEW
H1F21 revenue was £107m, down 14.8% y/y (H1F20: £125.6m) and down 11.9% sequentially (H2F20: £121.5m). Q2F21 revenue was up 5.3% y/y, indicating a trend to recovery in the post-lockdown period across both, Ireland and the UK. The strength of LTHM's business model is supported by the diversity of its customer base and the expanse of its product offering, allowing it to withstand fluctuations in demand across market sectors. We believe LTHM stock is a relatively low risk investment given the strong cash position (131.6p/share), no debt and a stable yield. The stock trades at 8x EBITDA, compared to its peer average of ~11.1x, on what are more compelling metrics.
Companies: James Latham Plc
Macfarlane has released a strong trading update for the 4 months to October 31 2020 highlighting second half revenue and PBT to date being ahead of 2019 and the expectation that 2020 PBT will be broadly in line with 2019, a strong recovery from the uncertain position at the interim results. Separately, the Group has announced that CFO John Love will be stepping down from his role and the Board to be replaced by Ivor Gray, current Group Financial Controller and Company Secretary. We expect this to be a seamless transition given Ivor's experience in the Group and represents very well managed succession planning by the Board. Reiterate buy rating.
Companies: Macfarlane Group PLC (MACF:LON)Macfarlane Group PLC (5K6:FRA)
We have today released a new note on The Ince Group plc - this is the first of a series of "explainer notes" that take an in-depth look at the various aspects of the Ince investment case our investors have told us require more clarification. This edition examines the partner remuneration model - the headline for which is that this isn't discretionary bonus, it's more of a revenue share that partners are given in lieu of pay. Thus their remuneration is entirely variable, rather than representing a fixed cost.
Companies: Ince Group plc
