Companies: FIPP SOLI SML AAU POW DNL BAR CTP RENX
Best of the Best (BOTB): Corp Positive end to H1 FY20 confirmed with more profit upgrades | Castleton Technology (CTP): Corp Interims – mapping out a steady second half | LiDCO (LID): Corp China launch
Companies: BOTB CTP LID
Interims reveal performance in line with unchanged expectations, bar IFRS16 amendments and minor tweaks since the October update. The merging of the two former divisions to create ‘One Castleton’ is expected to deliver benefits, along with rightsizing of the Professional Services team and a focus away from competing for low-margin Hardware revenue. New contract wins such as three Managed Services deals in the period show the continuing opportunity, as well as gaining preferred supplier status to the National Housing Federation (the Housing Association industry body). The Housing Association customer base has increased to 595 (FY19: 591), of whom 52% (FY19: 50%) take more than one product; the contracted order backlog has increased 5% since 1H19; recurring revenues constitute 66% of revenue into 2H20, giving confidence in forecasts; and the group remains well placed once the customer base assesses and commits to the inevitable future in cloud or hybrid software delivery. With 48% of revenue and 44% of EBITDA delivered in the first half (1H19: 49% and 47%), we look to the benefits of execution to deliver a solid 2H and a return to cloud-derived growth in visibility and quality of earnings into FY21. Target 130p reiterated.
Companies: Castleton Technology
Avacta (AVCT): Corp New therapeutics collaboration and option agreement | Castleton Technology (CTP): Corp Interim trading update | discoverIE (DSCV): Corp Q2 stronger than Q1 | Europa Oil & Gas (EOG): Corp Headwinds driving diversification efforts | Morses Club (MCL): Corp Strong earnings support transformation
Companies: DSCV AVCT CTP EOG MCL
Registration document approved for Helios Towers. The Group provides essential network services, flexible infrastructure solutions and reliable power supply to mobile network operators in five African growth economies. Revenue increased 7 per cent. year-on-year to US$191m (H1 2018: US$178m), with Adjusted EBITDA up 15 per cent. year-on-year at US$99m (H1 2018: US$86m) for the six months ended 30 June 2019. Pricing rumoured at 115p to 145p implying valuation of up to $1.8bn. Expected Oct 2019.
Companies: OSI CTP IQE MTFB SENS AVCT TGP PMI CMCL JLH
Castleton Technology (CTP): Corp Prelims | Chariot Oil & Gas (CHAR): Corp Anchois development technically feasible | ClearStar (CLSU): Corp AGM told that strong H1 growth is on track for FY | Frontier Developments (FDEV): Corp Strong H2 sees upgraded forecasts | K3 Business Technology (KBT): Corp Trading update | Pelatro (PTRO): Corp Major contract win in Asia underpins forecasts
Companies: CTP CHAR 9537 FDEV KBT PTRO
Castleton’s prelims report performance in line with the trading update: EBITDA of £6.3m (vs £6.3mE) from revenue of £26.4m (vs £26.5mE), with operating cash conversion of 97%, and free cash flow of £4.8m. With the maiden dividend reaffirming the board’s confidence in cash flow and net debt approaching breakeven, the balance sheet retains capacity for acquisitions to complement 7.3% organic growth achieved in FY19, and expected to persist into FY20 and FY21. EBITDA margin expansion from 24% (FY19) to 26.5% (FY21) is expected to derive from continuing improvement in cross sales, and the integration of the now unified Software and Managed Services divisions. With operating fundamentals consistently positive and improving, we lift our target price to 140p (125p), representing a 16.4x EV/EBITDA multiple and 4.5% target free cash flow yield.
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
Castleton Technology (CTP): Corp Positive trading update | HML Holdings (HMLH): Corp Acquisition | Yourgene Health (YGEN): Corp Trading update drives upgrades
Companies: CTP HMLH YGEN
Companies: CTP GHH LID
Castleton has now started the year in style with a trio of positive events – after Monday’s announcement of a contract win and the first full solution suite go-live providing referenceability, today sees the the £1.8m acquisition of Deeplake Digital. Cambridge-based Deeplake provides digital customer communications between landlords and tenants, through SMS, email and social media in the housing sector using its own proprietary software, as well as adding 30 new customers to the Castleton Housing Association base. Castleton’s route to growth is being demonstrably delivered and we look forward to 2019 as a year to excel. Target 125p reiterated.
Anglo African Oil & Gas (AAOG): Corp Multiple discoveries confirmed | Castleton Technology(CTP): Corp Contract win and client go-live | OptiBiotix (OPTI): Corp SlimBiome® manufacturing/supply agreement | Tracsis (TRCS): Corp CEO succession
Companies: CTP OPTI AAOG TRCS
Wentworth Resources— oil and gas exploration and production company, with assets in the onshore Rovuma Basin of East Africa. Introduction only. Mkt Cap c £50m . Due today
Finncap—proposed acquisition of M&A adviser Cavendish Corporate Finance and AIM admission. Offer TBA
Kropz PLC—an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa, a phosphate project in the Republic of Congo and exploration assets in Ghana. Looking to join AIM, offer TBC, market cap TBC.
Due Late October.
Path Investments— First acquisition of a 50%. participating interest in the producing Alfeld-Elze II gas field in Germany. Seeking £10m raise. Transaction aborted. Was RTO. PATH to seek lifting of suspension.
Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber
security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over the next few months.
The Panoply parent company of a digitally native technology services group founded in 2016 with the aim of identifying and acquiring best-of-breed specialist information technology and innovation consulting businesses across Europe, is looking to join
AIM. Offer TBC, expected late November 2018.
Companies: HYDG KRM TLOU SUN KEFI ZOO ATM CRW CTP CAB
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Final results for the year to March are in line with the April trading update, which had been well ahead of expectations in profit and cashflow: with some customer orders postponed beyond year end, revenue of £10.4m had been 6% behind expectations while adjusted PBT (£0.8m) and free cashflow (£1.0m) were respectively 499% and 227% ahead. Strong cost control still permitted £2.8m (FY19: £2.9m) of R&D, leading to the continuing development of the global large enterprise products, but also of MyID Professional, simplifying the solution and expanding the addressable market. With cost control clearly in hand, and even confidence in cost expansion after two years of restraint, the group is driving opportunities for high-margin revenue growth and the future continues to brighten. Target 80p reiterated, with the chance for TP review with greater COVID-19 clarity at interims in December.
Companies: Intercede Group
After completing six acquisitions over the last two years, CentralNic has diversified its market exposure and significantly improved its competitive position. In this report we provide an update of the company’s markets and its competitiveness within each market. We conclude that CentralNic’s increased scale and broadened market exposure puts it in a strong position to consolidate the market and deliver further synergies to investors. We provide our estimates for H1 2020.
Companies: Centralnic Group
AGM statement as expected; Resume with a Buy
Companies: Cloudcall Group
Instem’s audited FY19 results showed strong double-digit organic growth, with an ongoing transition to SaaS (now 25% of group revenues) and strong growth from SEND services and the Informatics offering. Given the current backdrop, we have moderated our assumptions around new business wins offset partially by lower discretionary expenditure. The net PBT impact is ~£0.5m this year and next, which in our opinion is relatively minor in the grand scheme of things. The fundamental point remains that Instem is a market leader in its field with high barriers to entry. It has a robust, resilient model, multiple secular growth drivers and a solid strategic and financial position. The balance sheet remains strong with substantial net cash.
Launch of public preview confirms WANdisco’s LiveData platform has been successfully integrated at Microsoft Azure and that commercial services can begin. As highlighted previously, we believe this will be a significant financial catalyst. No estimate of the expected revenue contribution is given but the company is aiming to sign 50 new customers over the next 12 months. Our conservative scenario analysis suggests this relationship alone could generate over $80m in annual revenues by 2023.
If you are working from home, earning the same salary as last year, and not commuting, holidaying abroad or eating out, then you’ve probably saved a great deal of disposable income since the COVID-19 lockdowns began in March. The same is true for corporates, especially those who haven’t been materially impacted by the pandemic, or incurred significant extra costs (eg social distancing, cleaning, PPE). Take BuildTech software developer Elecosoft, who said today that although revenues declined 3% April YTD (2% constant currency: ED Est split -14% month vs +2% Q1’20). PBT had jumped an impressive 25% YoY – as tradeshows were postponed and less money was spent on travel, hotels, marketing & other discretionary items. Altogether lifting YTD EBIT margins to circa 20% (ED Est) vs 16.8% H1’19, and closing April with net cash of £3.1m vs £1.1m in Dec’19.
COVID-19 continues to have a profound impact on virtually every industry, on a global basis. Enterprises of all types and sizes are racing to adapt their models to the “new normal”. The more thoughtful are looking not just to effect change, but to improve how change happens, to become more flexible and more nimble as organisations. Sopheon has today announced some major developments to its Accolade platform which look to assist the group’s customers in this endeavour. This note describes the changes to the product range, and draws on a recent customer webinar used by Sopheon to highlight the evolving challenges to enterprise innovation management.
Success breeds success. Take B2B software developer Rosslyn, who over the past few years has meticulously built a leading Big Data & spend analytics SaaS platform (RAPid), supporting an illustrious roster of 100+ clients (many global multi-nationals). Topped off with the synergistic acquisition of Langdon in Sept’19, & becoming EBITDA positive in FY’20 for the 1st time ever - thanks to increasing ARR (+12% to >£6m vs £5.4m LY) & favourable operational leverage (81% gross margins).
Companies: Rosslyn Data Technologies
Avation is a lessor of 48 commercial aircraft to a diversified airline client base. Intra-day yesterday, the group announced that, as a result of the present uncertain backdrop caused by COVID-19, the Board had withdrawn from the previously announced strategic review and formal sale process, and that it was no longer in active discussions with any interested parties. The key reasons behind this were 1) the present uncertainty meaning that an attractive valuation was seen as unlikely to be achieved at this present moment in time and 2) the distraction of the process in the day to day operational activities of the business.
Petards supplies advanced security and surveillance systems to the Rail, Defence and Traffic Technology markets. Intra-day yesterday, the group confirmed that its RTS Solutions subsidiary had secured a multi-year renewal agreement for the provision of software support services to one of its major rail customers.
Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning, the group has released full year results to 31 December 2019, alongside providing an update on progress against the present COVID-19 backdrop. In line with the market updates provided in February and April, group revenue in the year increased by 3.2% to £7.1m, whilst revenue from continuing operations, excluding the Onboard business that was disposed of in the year, increased by 7.2% to £6.7m, driven by traction being gained with new products and services. The gross margin in the year increased by 280bps to 53.9% reflecting the greater proportion of software and service income. This resulted in a trading loss after tax before exceptionals of £89k, which post exceptionals of £412k that predominantly related to the disposal of OnBoard, resulted in a loss after tax of £501k. As previously reported, the year-end net cash position stood at £850k, which reflected an increase of £554k in the year; this post £1.1m of new product development expenditure and cash costs associated with the disposal.
Companies: AVAP TST PEG
Nanoco has signed a framework agreement with STMicroelectronics (ST). This covers both development work and commercial supply of nano-materials for use in multiple infra-red sensing applications over a five-year period. While the agreement underpins the operational cash runway, which was recently extended to Q221, there is still significant uncertainty regarding future revenues, so our estimates remain under review.
Companies: Nanoco Group
Watchstone has this morning announced a proposed second return of cash to shareholders, totalling a further £18.4m/40p per share. The rationale for this second tranche relates to the Board having previously allocated a cash buffer of £20m for any possible fines or penalties arising from the now lapsed SFO investigation. Subject to shareholder and court approval, this further return is anticipated to be made on or around 31 July 2020. Shareholders approved the first £50.5m/110p per share return of cash on 27 April 2020, which remains subject to court approval on 11 June 2020 and is scheduled to be paid on or around 30 June 2020.
Companies: Watchstone Group
1HMar20 sales flat at £2.3m, MRR also flat at £340k. Net loss £-2.0m (PY: £-1.9m), period-end net debt £0.14m. On MRR - a new customer win and also upsells were offset by customer churn. New sales generation has been slower than planned. In response, INX has reduced staff headcount by 20%, starting in January. Covid has negatively impacted business performance – meaning longer sales cycles and higher DSOs. Encouragingly therefore, cash collection improved post period-end (to £0.3m). Further, two upsells have been secured, meaning YTD upsell value is up +10% y/y. Despite this progress, prudently, INX has decided to further reduce costs, with the objective of obtaining a monthly breakeven performance. This, combined with the company’s renewal pipeline and cash position, is said to provide sufficient funding for the current year. The board is however mindful of the sustainability of the changes made and as such, is in the early stages of reviewing its longer-term strategic options to introduce fresh capital. Forecasts remain U/R.
Companies: I-Nexus Global
ECSC Group plc* (ECSC.L, 70.5p/£7.0m)
Companies: ECSC Group
Rosslyn is expected to move into positive operating EBITDA for FY20E. Moving the business model into self sustaining status will be a major milestone. Rosslyn has raised £7.3m gross in a Placing of new equity to increase its sales & marketing capability, maintain its investment in R&D and position it to take advantage of bolt-on acquisition opportunities.
Synairgen (SNG.L): Preliminary 2019 results | Yourgene Health (YGEN.L): COVID-19 testing service launch and business update
Companies: Synairgen Yourgene Health