Morning Note – 16 April 2024

Robust margin and cash performance

Dowlais Group - Motoring forward

Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.

Surface Transforms (SCE LN) - Obstacles removed for higher production

Surface has issued a brief Q1 update. Production will ramp-up this year as final new equipment is installed, and manufacturing teething problems recede.

Nexteq - FY23 adj EBITDA +4% ahead, FY24E upgrades of +1-10%

Nexteq’s FY23 results show adjusted EBITDA +4% ahead of the +6% upgrade at the January trading update, record FY23 EFCF of $17.4m, and a confident outlook that leads us to reiterate our FY24E revenue and upgrade FY24E gross profit, adj EBITDA, and EFCF by +1-10%. The strategic focus on higher-margin products and customers reducing elevated inventory levels led FY23 group revenue -5% yoy to $114.3m, with Quixant 6% lower at $69.3m and Densitron 2% lower at $45.1m. Effective supply-chain managemen

Morning Note – 4 April 2024

Time to focus on growth ambitions

Morning Note – 25 March 2024

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

Initial Equity Trading Comments - 16 May 2023

Nexteq - FY23 net cash +36% ahead, FY24E EBITDA & EFCF reiterated

Nexteq’s FY23 trading update highlights a strong gross margin performance, adjusted PBT comfortably ahead of market expectations, and net cash +36% ahead of our previous forecast at $27.9m. The strategic focus on higher-margin products and customers reducing elevated inventory levels have led FY23 group revenue -4% yoy to $114.8m, with Quixant 6% lower at $69.4m and Densitron broadly in line at $45.4m. Effective supply chain management, strong price discipline, and increased sales of higher marg

LIBERUM: New Energy Nuggets: Hydrogen - the future is green

PROGRESSIVE: IG Design Group: Strong profit growth, key strategy initiatives and quantified aspirations

IG Design Group delivered a 27% increase in adjusted PBT to $34.8m for H1 FY24 (to 30 September) with a significant reduction in net debt to $15.1m, as signposted in last month’s trading update. The adjusted operating profit margin was some 270bps higher at 8.6% (vs 5.9% in H1 FY23), the highest achieved since H1 FY20 ahead of the CSS acquisition. Management has provided more details on the key attributes and initiatives for its new growth-focused strategy. The group is on track to return to pre

The Joy of Techs - Cavendish Technology quarterly sector note

£23.3bn in enterprise value has been returned to AIM technology shareholders over the past six years in the form of 51 public to private takeouts, including 10 in 2023 alone with the takeovers of Smoove* and Tribal announced in early October. With UK valuations appearing cheap and looking more attractive to potential acquirers, we take a moment to reflect on the trends of corporate and private equity bidders targeting AIM-listed technology companies going back to 2017, through the uncertainties

Byotrol - H1 2024 interims: Forecasts reinstated

Byotrol’s interim results were in-line with the recent trading update and, as such, we reiterate our FY 2024 forecasts. Group revenues for the period were down by 9% to £2.0m, however, product sales (excluding IP related royalty income) were flat YoY. Encouragingly, professional product sales increased by 8% to £1.8m and the company delivered an improvement in underlying gross margin to 44.5% (vs FY 2023 42.6%) supported by rebalancing the portfolio towards higher margin products in animal and h