The UK market showed a continued recovery in the first quarter albeit the indices are still well short of their all-time peaks, unlike many of their international peers. The FTSE 100 has risen by 1,186 points (21.4%) since the end of October and the FTSE 250 by 4,304 points (25.0%). The comparable performance since the start of the year is less spectacular- the FTSE 100 has risen by 253 points (3.9%) and the FTSE 250 has risen by 1,070 points (5.0%). The factors behind the sustained rally are familiar. The belief that the roll-out of the vaccine and some relaxation of lockdown limitations will lead to a significant economic recovery, compared to the collapse seen in the first half of 2020, due to lockdowns. Indeed, the recent economic picture is becoming more optimistic than previous expectations. According to the ONS, the economy grew a little more than initially estimated in Q4 last year. This means GDP for 2020 as a whole contracted by 9.8%, revised up marginally but still the worst contraction on record. Markets, in general, have focused upon the potential scope and extent of the recovery. The sectors and stocks that have outperformed have been seen as ‘recovery’ plays with a rotation from stocks seen as ‘lockdown’ winners into those set to benefit from the ‘unlocking of society’ and/or exposed to the consumer. We expect 2021 will continue to be a “stock-picker’s” market. The sharp increase in the household savings ratio in Q4 highlights the scope for a recovery driven by expenditure. As further lockdown limitations are lifted, evidence of this growth will help to underpin the more optimistic outlook for Q2 and beyond.
Companies: AMYT ARBB BPC BAG BVC BEG BONH BLVN BRSD CML CWK CRPR EYE ECHO FDM FAR FA/ GPH GSF HUW INSE JDG KAPE KP2 MACF MPAC MNZS NESF NBI OTMP OBD PREM QFI RUA SCS SEN SOS SUR TON TOU TXP TGL TCN UEM VLS WYN
Being financially trained, I’m naturally a cautious man. However occasionally you have to ‘smell the coffee’ when the fundamentals change, perhaps forever. In fact if nothing else, the pandemic has taught ‘value investors’ (like myself) to rip up many historical norms, and peer instead through the ‘looking glass’. Particularly relating to medicine, sustainable living and technology, which we believe have now all entered golden periods. Why is this important? Well for a while I’ve been a little sceptical that even the world’s best engineering companies could consistently expand the top line at 10%+ organically, whilst delivering 10%+ EBIT margins over the economic cycle. This rarely happens (see below), but due to astute foresight, attention to detail & almost flawless execution, we think Mpac has every chance of breaking the mould.
Companies: Mpac Group PLC
Mpac, the specialist high-speed packaging and automation solutions provider, supporting the roll-out of next-generation technologies, has today announced full-year results to 31 December 2020. Despite pandemic challenged trading, management has delivered an impressive and resilient financial performance (in line with our revised expectations in January) alongside excellent cash generation and a stronger/high-quality closing order book compared to FY2019A at £55.5m (+6% year-on-year). The Group confirms that FY2021F has “started well across all regions”. We remain confident in Mpac’s ability to continue to perform well in a dynamic market with long-term structural drivers (i.e. industry 4.0), which should continue to push revenues and profitability forward as conditions normalise. At this stage, we continue to take a cautious approach with our estimates given the continued uncertainty around COVID-19, but we note that Mpac operates in good long-term essential and resilient growth markets with long-term growth prospects. We leave our FY2021F estimates unchanged with revenue of £95m (+13.5% yoy), adj. PBT of £7.6m (+20.6% yoy) and adj. dil EPS of 32.1p (+2.2% yoy). HOUSE STOCK
2021 is ‘The Year of the Package’ – three interesting Small Caps
Companies: MCBMPACRBN
Like many awful dreams, the Covid19 nightmare hasn’t quite finished, recently mutating into an ultracontagious super-bug. The risk being global transmission and infection rates spiral out of control, swamping healthcare systems again. However this time there is an answer. Hunker down for a few months, and inoculate as many vulnerable people as possible to reduce fatalities/hospitalisations. Plus, the Oxford/AstraZeneca vaccine is relatively simple to distribute (re 2°C to 8°C). Making rapid nationwide rollouts feasible, alongside ultimately bringing the curtain down on this dreadful virus.
The specialist high speed packaging and automation solutions provider, supporting the roll-out of next generation technologies, has published an excellent trading update for the year ended December this morning. In an environment challenged by the pandemic, management has visibly acquitted itself impressively in sustaining business and solutions development. The statement confirms that the out-turn for FY2020F PBT is set to be ahead of our expectations with the order book remaining at similar levels to the start of last year; a strong cash generation performance has been sustained. The acquisition of Switchback in the USA, completed in September, is confirmed to have settled well into the Group with anticipated synergies coming through and better than expected current trading. We upgrade our FY2020 forecasts accordingly and reintroduce forecasts for FY2021F. Mpac appears very well positioned to us with a strong reputation amongst its blue-chip client base in defensive strategic segments across Healthcare, Pharma and in Food & Beverage. The net cash balance sheet underpins development potential through applied technology and industry consolidation.
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: SAR CREO VRS JDG CCT MPAC ALS AVCT EAH GCM
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.
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: JET2 KRPZ IRON DNL RBG MPAC AGY SENS TGP
COVID-19 has impacted businesses in many different ways. However for specialist high speed packaging & automation solutions provider Mpac, we think the pandemic will prove to be a long-term positive. Why? Well the lockdowns have already started to accelerate both the reshoring of US production back from China (re supply chain disruption & US tariffs), and the adoption of the company’s expanding suite of Industry 4.0 solutions, such as remote diagnostics, virtual machine testing/commissioning & augmented reality training.
The specialist high speed packaging and automation solutions provider supporting the next roll-out of next generation technologies has published a resilient interim results performance in the face of the market disruption from Covid. The Group has made it clear previously that it has been impacted by the pandemic. However, operations have continued with clients supported throughout and MPAC has remained profitable and cash generative and its net cash position has increased. The order book remains firm and no orders have been cancelled due to the pandemic. The extent of the market opportunity and strategy is unchanged. The market need for MPAC’s solutions continues to grow. The Group serves resilient markets considered to be essential to economies in Pharmaceutical, Healthcare and Food & Beverages. Whilst the supply of new Original Equipment has fallen in the period, impacted by Covid, the Service operations have seen strong growth (c+28%), supporting continuing Group gross margin enhancement. We now look forward to the current H2 period and reinstate forecasts for the full year, noting building momentum back towards normalised trading. The long-term opportunity and outlook for MPAC in its field of applied technology continues to look very bright to us.
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Volex’s y/e update points to revenue and adj. operating profit of over $440m and $41m, 9% and 5% ahead of our expectation. Results have benefited from 187% revenue growth in EVs and strong consumer electronics demand. Operating margins grew to 9.3% (FY20: 8.1%) and, absent higher margin acquisitions, we now expect gradual progress towards management’s 10% target, as an appropriate balance is struck between revenue growth and profitability. The drive to be the lowest cost producer of quality product, leveraging the Group’s global platform, is a core objective underpinning growth ambitions. Our updated adj. EPS growth - 14% for FY22E and 9% for FY23E - is cautiously framed in the context of the increased investment now being committed to drive revenue growth. The recent DE-KA acquisition is performing strongly and alongside further accretive moves, Volex should continue to deliver.
Companies: Volex plc
Capital Limited (LSE: CAPD) this morning provided its Q1 2021 trading update. Q1 revenue is the strongest since the company's inception and is in line with our estimates, as are the other operational metrics.
Companies: Capital Limited
AFC Energy announced a fundraising of £36m consisting of an oversubscribed placing with institutional shareholders amounting to £31.2m and a £4.8m strategic investment from ABB (£3.25m) and Dutco (£1.50m). The equity capital raise was priced at 64.5p representing a modest discount of approximately 5% relative to the prior day's closing price. The robust support shown by the capital raise suggests, in our opinion, that the strengths of AFC Energy's technology, its commercial positioning and the growth opportunity afforded by each of AFC Energy's addressable markets have been recognised by the institutional market. The expansion of AFC Energy's strategic partnership with ABB, now a shareholder, into the data centre market is potentially transformative. We outline in this note the potential implications of that development, while deferring the implications of that development on our fair value estimate until we have undertaken more analysis. We place our fair value estimate under review for an upgrade.
Companies: AFC Energy plc
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Dispersion Holdings PLC, an investor in the high growth FinTech sector within the UK, the USA and Canada, has announced its intention to IPO on the Access Segment of the Aquis Stock Exchange Growth Market. The Board intends to deploy the majority of the Company’s cash resources in the acquisition of minority interests in a number of different, yet to be identified, companies in the broad FinTech sector, and to apply expertise to the business operations and strategic plans of these companies. Target Admission Date of 30 April. Darktrace plc. Intends to float on the main market of the London Stock Exchange (premium). Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Due early May, musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. Due 27 April.
Companies: KIBO MTW GWI MTR DUKE ITM GDR MSMN CMCL PTRO
Spectra Systems Corporation, a leader in machine-readable high speed banknote authentication, brand protection technologies, and gaming security software, has announced that it has executed an agreement with a major central bank customer, in addition to the sensor agreement announced on 2 February 2021, to include a new capability in those sensors to detect “exotic counterfeit” bank notes.
Companies: Spectra Systems Corporation
Ince has announced a trading update for the year ended March 2021 with revenue of £97m, up slightly on a like-for-like basis vs. FY20, a good performance considering the impact of COVID. With net debt down to £7.1m and available cash and facilities of £10.8m, up substantially year-on-year vs. £5.3m in FY20, the Group is in position to fund growth through FY22.
Companies: Ince Group plc
AFC has announced a £36m equity issue with £3.3m from ABB, £1.5m from Dutco and £31.2m from institutional investors. It has also announced that its partnership with ABB will develop a new product offering to serve the data centre market. While the extra share count marginally dilutes our existing valuation (from 191p to 184p) we expect this to be more than offset by the profit opportunity in data centres and in the marine/rail markets that are being explored in conjunction with Ricardo. We will quantify these issues in a future report, but we are confident that the addressable markets for AFC are vast and it has a good chance of succeeding in them.
Despite the pandemic causing major disruption to many of the group's customers, Filta navigated FY20A well, generating positive Adj EBITDA (£1.1m) and FCF (£0.8m). Successful vaccination programmes in Filta's core USA and UK markets are enabling venues to steadily reopen. With consumers sitting on record levels of savings, and there being significant pent-up demand for leisure activities that Filta service (eg restaurants, sports venues etc), the outlook appears increasingly positive for the group. Filta enters FY21E with a stronger business profile, having launched new products and services, and expanded its customer list (c1700 added in FY20A). Given the improving prospects, we believe Filta remains attractively valued on a FY22E EV/EBITDA of 9.7x. We leave FY21E and FY22E forecasts unchanged and reaffirm our Buy rating.
Companies: Filta Group Holdings PLC
A capital markets day presentation and demonstration highlighted the extensive capabilities of Sea/, the group’s modular SAAS offering for the shipping industry. Adoption by key clients should drive shipowners and other brokers to follow suit, allowing it to become the pre-eminent industry platform. Embedding into customers’ workflows, and a revenue model based on annual subscriptions and transaction fees, point towards high quality recurring revenues protected by barriers to entry. Our recommendation remains BUY, with an unchanged DCF-based target price of 3200p.
Companies: Clarkson PLC
Anglo Asian Mining* (AAZ LN) - STRONG BUY – Quarterly production update and CY21 guidance Botswana Diamonds (BOD LN) – Moving to a further stage of drilling at Thorny River Capital Limited (CAPD LN) – Q1 2021 delivers strongest ever quarterly revenue GoldStone Resources* (GRL LN) – Update paves way for production ramp-up at Homase Kenmare Resources (KMR LN) - Q1 production rises on higher grade and production despite Covid-19 isolation for management and staff Rainbow Rare Earths* (RBW LN) – Temporary suspension of REE concentrate exports Serabi Gold* (SRB LN) –– Grade improvements drive higher Q1 gold production
Companies: CAPD AAZ BOD GRL KMR RBW SRB
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Darktrace plc. Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange. Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Timing TBA musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51m) will be used to fund the Acquisition. Due 19 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. Due 27 April.
Companies: GAL AXS IDH GWMO AGL YEW INFA HE1 PPC CASP
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Dispersion Holdings PLC, an investor in the high growth FinTech sector within the UK, the USA and Canada, has announced its intention to IPO on the Access Segment of the Aquis Stock Exchange Growth Market. The Board intends to deploy the majority of the Company’s cash resources in the acquisition of minority interests in a number of different, yet to be identified, companies in the broad FinTech sector, and to apply expertise to the business operations and strategic plans of these companies. Target Admission Date of 30 April. Darktrace plc. Intends to float on the main market of the London Stock Exchange (premium). Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Due early May. musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. Due 27 April.
Companies: ADME RTC SAV DFCH HUW TEG ANIC KOO MIRI SPSY
Recovery and outperformance have been hallmarks of the building materials and merchants sector since lockdown ended and whilst Brickability may not have been in the vanguard of this re-appraisal by investors it has certainly made up for it over recent months doubling in value since last November and rising over 20% in the past month to a new high. There will probably be few surprises that it is moving FY21 (to March) guidance up for a second time, nor that management is expecting to deliver growth in FY22 but we believe price upside exists from here based on the possibility of future upgrades driven by either continuing market trends, organic growth initiatives or acquisition accretion, of course coupled to its strong cash flow characteristics. A current year (conservative) rating of 14x PER, 10x EV/EBITDA and 2.5% yield remains undemanding in actual and sector relative terms.
Companies: Brickability Group PLC
Byotrol released a positive trading update for the year to March 2021, indicating adjusted EBITDA of over £1.7m, which was in line with our forecasts, based on revenues of more than £11.0m (FC est. £11.5m). After a volatile FY 2021, both in terms of revenue and input prices, a degree of normality has returned to monthly trading patterns. The secular shift towards the increased importance of infection prevention in its market, however, is expected to drive sustained demand for its products. Having signed a number of multi-year licensing agreements in 2021, the company is confident also of further licensing and intellectual property agreements this year, across both its Professional and Consumer businesses, prompting us to introduce FY 2022 forecasts, which indicate c.16% and 23% adjusted EBITDA and EPS growth, respectively. We reiterate our target price of 11p, which still does not fully reflect the exploitation of its long-acting sanitisers by Solvay and Integrated Resources, and also offer upside to our new forecasts.
Companies: Byotrol plc
Spectra Systems Corporation has announced that its Secure Gaming Transactions (SGT) division (a global provider of sophisticated auditing software to lottery providers and backers) has been selected by a new client, a Canadian lottery, to provide its Premier64 Integrity internal control system (ICS) over an initial period of five years (plus optional renewal). In addition, Spectra has renewed (for a four year term) a contract with a long-term US lottery customer that will also convert the Premier64 Integrity ICS. Combined, the contracts are worth an estimated $1.0m over the full term excluding additional game-specific development revenue and again demonstrate the long-term recurring nature of revenues in the business.
