Hybridan Small Cap Feast - 15 August 2024

15th August 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced, or it is a rumour Dish of the day Admissions: None Delistings: Tertre Rouge Assets Plc (TRA.L) has delisted from the Standard Segment of the Main Market. What’s baking in the oven? ** Reverse Takeovers: Earnz plc (EARN.L) is an AIM Rule 15 cash shell, which is required to make an acquisition or

Morning Note – 15 August 2024

Redcentric - Cash generation escalation

FY24 provided the material completion of the integration process of the 5 businesses acquired up to June 2022, lifting the revenue run rate from £90m to £150m. FY25 will see the re-establishment of adj EBIT margins at 12%+, with our forecasts’ horizon credibly indicating that adj EBIT of £9.7m in FY24 (to March) will increase to £21.2mE in FY25, and onward to £27.2mE in FY27. As net debt reduces from £42m at FY24 to £5.7mE at FY27, M&A and improved dividends are possible. We expect that FY24 to

Morning Note – 16 May 2024

Morning Note – 19 January 2024

Morning Note – 22 November 2023

Redcentric - The song remains the same: focus on FY25

Redcentric continues to iron out the final wrinkles in the integration process in anticipation of the unchanged expectation of a clean FY25, while still achieving revenue growth. Management focus has remained on organic growth, integration of the acquired businesses, and energy cost minimisation. Organic growth in recurring revenue (excl Sungard short-term contracts) exceeded 8%, including a very healthy level of new logos; and non-recurring revenue grew 38%, with no detriment to gross margin. M

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

Morning Note – 24 August 2023

Redcentric - Prelims to FY23: eyes on the prize in FY25

Prelims to March 2023 reiterate the significant revenue benefit of the acquisitions in the year. FY23 EBITDA growth of 3% to £24.5m was generated from revenue growth of 52% to £141.7m, highlighting the FY24-25 opportunity for material EBITDA growth once post-acquisition cost management completes. While the FY23 revenue expansion is set off by some cost increases (principally, but not solely, energy), £16.2m cost savings have been delivered with a further £5.8m in process during FY24. This will m

Morning Note – 25 April 2023

Redcentric: Bedding in the acquisitions (10 for 23 extract)

Redcentric is a mid-market managed services provider, gaining near-term scale through acquisitions. With >90% recurring revenue, the group has very strong visibility, delivering services across the spectrum of complexity. A return to a strategy of targeted acquisitions, funded by the group’s strong cash generation profile, has delivered momentum and scale to the top line. This will be complemented by the savings opportunity in the Sungard datacentres acquisition, which drives the bulk of the 48%

Redcentric - Interims in line; acquisitions shine

Interims to September are in line with the November trading update and expectations are unchanged. £11.7m EBITDA was delivered from £61.5m revenue, generating £-11.1m of free cash flow after a well flagged and discretionary inventory build-up, as well as the one-off effects of Sungard onboarding (which will unwind by March year-end). The July completion of the final elements of the acquisition (4D, Sungard Consulting and Sungard data centre) has contributed momentum to the top line which will be

Morning Note – 8 December 2022

Zeus Industrials Round-Up - 13 September 2024

The UK industrial sector continues to show promising signs of recovery, with manufacturing PMI reaching a 26-month high of 52.5 in August as all survey indicators but one expanded. Economic data has also been encouraging, with UK pay growth cooling to a two-year low and inflation rising only slightly in July – supporting the case for further interest rate cuts this year by the BoE.

Allenby Capital: EnSilica plc - Update

EnSilica plc announced it has won a Design & Supply contract with Siemens AG. Financials were not disclosed but the Company notes that the Design component of the contract (non-recurring engineering work) will commence in calendar year 2025, with the Supply (initial production phase) expected to start in Q4 2027. We make no changes to our forecasts but note that the new contract win: a) further underpins our FY 2025 and FY 2026 forecasts where we are expecting top line growth of 21% and 28% resp

NCC Group (NCC LN) - Transformation continues to outperform

NCC continues to deliver ahead of internal and market expectations. The four months to September period end indicate adj. EBIT of £6.0m, almost double the prior guidance (£3.5m) and a £7.0m swing from this time last year (-£1.0m). The summer months are typically a quieter period for NCC, but today’s announcement highlights the impressive execution by management on its turnaround plan. Cyber Security performed ahead of expectations, and whilst today’s announcement doesn’t provide any further deta

Morning Note – 30 August 2024

Hybridan Small Cap Feast - 12 September 2024

12th September 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced, or it is a rumour Dish of the day Admissions: None Delistings: None What’s baking in the oven? Our daily digest of news from UK Small Caps If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”. Hybridan Chefs research@hybridan.com Banquet Buffet*** Andrad

Eleco - Robust H1, FY24-26E reiterated, TP upgraded to 200p

Eleco’s H1 results show robust organic revenue growth of +12% driving group revenue growth of +21% to £16.3m, adj EBITDA +27% yoy to £3.3m, and strong net cash of £12.0m vs our FY24E forecast of £12.3m. A confident outlook leads us to conservatively reiterate our FY24-26E forecasts at this point, where Eleco has already achieved over 50% of FY24E revenue, we expect adj EBITDA growth of +7% yoy in H2 24E after +27% yoy in H1, and FY24E EFCF of +£3.1m compares to +£3.0m delivered in H1 24. Excelle

Morning Note – 10 September 2024

Checkit - Contract expansions drive order intake

In H125, Checkit reported year-on-year growth in annual recurring revenue (ARR) of 9%, with strong order intake partially offset by higher churn. Existing customers contributed more than half of ARR growth, evidence of the land and expand strategy at work. The company maintains its short- and medium-term outlook, including its target to reach EBITDA break-even in FY27, with the narrowing H125 EBITDA loss confirming progress towards this. We maintain our ARR, revenue and EBITDA forecasts and redu

LIBERUM: Cirata plc: Cirata from the flames

Alphawave Semi: Initiation - accelerating to the speed of light

Alphawave Semi supplies cutting edge connectivity solutions for the world's most demanding applications in digital infrastructure. Over the last two years the business has been transformed and it now licences its Intellectual Property (IP), supplies custom silicon and, from 2024, should supply optical connectivity silicon. The company generated revenue of US$185m in 2022 and is targeting growth to cUS$500m by 2025 with a consensus forecast of 102% pa growth in pre-tax profit over the period. Whi

Alphawave Semi | CMD - Reasons to be cheerful

Alphawave's shares have recovered almost half of the losses experienced when forward guidance to 2025 was reduced in April. Following what was a difficult set of FY23 results, the company's recent Capital Market's Day (CMD) set out a powerful case for a continuation of the recovery in the share price, amplifying the group's potential to ride the magic carpet of hyperscaler driven demand for its connectivity Intellectual Property (IP) and its products. Not only were estimates for total addressabl

SysGroup (SYS LN) - Catalyst for AI adoption

SysGroup has delivered FY24 results exactly in line with expectations. We do not make any changes to forecasts, except the effect of the recent capital raise and lower debt levels. FY25 should be a transition year, with the company beginning to implement an innovate AI strategy with a new management team. To catalyse adoption of AI, SysGroup plans to implement transformative AI projects internally that should provide compelling live case studies and accelerate the company’s sales momentum over t

PROGRESSIVE: Beeks Financial Cloud Group: Contract extension at JSE – ‘Please, sir, I want some more’

Beeks inks a multi-year contract extension at the Johannesburg Stock Exchange. The contract was first signed in September 2023, with the first extension in March 2024; the momentum reflects stronger-than-expected customer demand from JSE clients – this is a profit centre for JSE. The service is available at the JSE's Teraco data centre, addressing additional regulatory requirements for dual location disaster recovery (customer upselling). The value was not disclosed; guidance is that the contrac

SHORE CAPITAL - iomart^ (IOM) - Buy at 133p

Synectics+ (SNX, House Stock at 185p) - H1 shows sustainable profit building