Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Tekcapital. We currently have 60 research reports from 6 professional analysts.
Novacyt (NCYT.L): First orders from Public Health England | Diaceutics (DXRX.L): Financial results for 2019 | Tekcapital (TEK.L): Belluscura files a new patent application
Companies: NCYT DXRX TEK
FRP Advisory Group, UK professional services firm specialising in restructuring advisory. Raising £80m (£20m primary). Expected market cap £190m. Compound annual growth of 16.4 per cent. in revenue and 10.9 per cent. in operating profit since the beginning of FY17.o Strong average EBITDA margins of 51 per cent. over FY17 to FY19, and consistently strong cash conversion
Companies: IRR SAE MTPH BKS CSSG SSTY TEK GROW ORR REDX
Intention to float by Gemfields Group. No Capital Raise. Currently listed on JSE. (GML:JNB) at circa £122m. The Group's key producing assets, the Kagem emerald mine in Zambia (believed to be the world's single largest producing emerald mine) and the Montepuez ruby mine in Mozambique (one of the most significant recently discovered ruby deposits in the world), are both expected to have long mine-lives with potential for expansion. Also owns the Faberge brand. Due Valentines Day 2020.
Companies: CCS TRP TEK BOOM 9537 ACT THR VRS SRB MWE
Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets through its subsidiaries Calvin Capital and Lowri Beck . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale. Expected Admission February 2020 The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m. Due 28 February. Investment firm Nippon Active Value fund is seeking to raise up to £200m at an issue price of 100p per share via an IPO. The company aims to invest in a portfolio of quoted Japanese stocks with market capitalisations of up to $1bn. First day of dealings expected early February.
Companies: PPIX DBOX CLL EME MSYS AURA MYSL THR TEK ECR
The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m. Due 28 February
Companies: BVC CCS CARR SDX TEK IDEA TPG MKA RRR
Big Tech is working on some form of smart glasses or headset that will change how we view the world around us. If glasses replace common gadgets like our phones or computer screens, it will mean big business to the company that comes out on top. We agree – we are enthused by the take-up of AR/VR over the long-term.
Companies: EVRH TEK IMMO TERN TRAK CPX SEE TCM TCM TRCS QTX
Tekcapital (TEK): Corp Interim results
Facebook Inc's ambitious efforts to establish a global digital currency called Libra suffered severe setbacks on Friday, as major payment companies including Mastercard and Visa Inc quit the group behind the project. The latest exodus leaves the Libra Association without any remaining major payments companies as members, meaning it can no longer count on a global player to help consumers turn their currency into Libra and facilitate transactions. Uber is buying a majority ownership stake of Cornershop, an online grocery delivery business serving Latin America in the latest step to diversify its revenue stream. The deal is expected to close in early 2020, according to a press release, with the current leadership at Cornershop continuing to lead the business and reporting to a board with majority Uber representation. Cornershop currently operates in Chile, Mexico, Peru and Toronto, according to the release. SoftBank CEO Masayoshi Son is considering changing his Vision Fund investment strategy to concentrate on companies with clearer pathways to profitability and public offerings, according to people familiar with the matter. Son plans to slow the pace of investment for Vision Fund 2 compared with his first $100 billion Vision Fund, which has deployed about $80 billion in less than three years.
Companies: TRAK ARB CPX MMX QTX SEE TECH TEK TCM TRCS TRCS
In-game spending should be regulated by gambling laws and so-called loot boxes banned entirely for children, MPs say. The industry's UK trade body responded it would "review these recommendations with utmost seriousness". Free video games often encourage players to buy virtual loot boxes, which contain an unspecified number of items to improve further game-play. This could have an impact on mobile game economics.
Companies: CDM FDEV KWS SUMO TM17 ARB BIDS GFIN MMX TECH TEK
Since we published our last note on Tekcapital Plc on July 16, 2019, the university intellectual property (IP) investment and services group has released a strong set of HYMay19 results. Tekcapital has continued to expand its consulting services into Latin America resulting in two more University strategic alliances. Their investee companies have reported important milestones including the filing of patents, acquisition of further IP, and raising of additional equity capital. The former reinforces our view that Tekcapital is building an exciting portfolio of disruptive companies.
Alan Howard’s push into crypto is a badly kept secret that appears to be crystallising into reality. In our view, the crypto space has undergone a very interesting transition from rampant retail speculation to, well, rampant retail speculation underpinned by a broad base of institutional interest. Google search volumes have fallen, transaction sizes appear to be escalating and the latest wave of equipment upgrades suggest consumer interest and potential to participate is now very low. Meanwhile, increased macro risk, currency controls and privacy concerns may be fuelling increased interest. We await further signs of whether we are at a turning point or whether this is (another) flash in the pan. Apple’s woes appear to be mounting as the group undergoes a difficult transition from a lifetime of focus on aesthetically pleasing hardware with a highly refined user experience, to a services focus. On one hand, the group’s key product the iPhone (which accounted for most revenues until very recently) is rapidly entering commoditised territory. Consumers have the option of a powerful and near fully-featured £160 generic Android handset or a cutting-edge iPhone for £1,000; for many, the choice is a simple one. The supply chain woes of having massive exposure to China in the context of the US-China trade war is also likely to weigh heavily on short term strategy. On the other hand, the group’s services are consumer focused and face strong competition from the likes of Amazon, Spotify, Microsoft and Netflix. If the thesis was to build the services on a firm foundation of the Apple hardware base, the cracks in security are worrying.
Companies: KAPE ARB AVST CNS DFX ECSC FLX IGP MMX NCC OSI SOPH TECH TEK
SEC S.p.A. Admission is following a reverse takeover under Rule 14 by SEC S.p.A of Porta Communications plc, another AIM quoted company. No funds being raised. Due 4 September. Mkt cap c £9.9m. The merger will create a business with global fee income of around €80m and a host of PR agencies, including Newgate, Publicasity and Newington. The Group undertakes its main trade of lending as well as electricity generation through the operation of two solar farms.
Companies: SEE SRE C21 EUZ ASH TEK C4XD HUR ABDP FARN
Research Tree provides access to ongoing research coverage, media content and regulatory news on Tekcapital. We currently have 60 research reports from 6 professional analysts.
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Seeing Machines Limited has announced that it has won a pre-production license deal with a major Automotive Tier 1 partner. This has been entered into under the terms of a pre-existing non-exclusive Collaboration Agreement to provide Seeing Machine's Driver Monitoring System (DMS) technology for an ongoing Automotive programme. For this Seeing Machines will receive a non-refundable pre-production license fee of US$5m before 30 June 2020, in addition to future volume based royalty payments for the above mentioned Automotive programme. Seeing Machines will retain all intellectual property rights associated with its DMS technology licensed to the counterparty under the Agreement.
Companies: Seeing Machines
The Coronavirus pandemic is a human tragedy of vast proportions – as well as the terrible human toll, COVID-19 has led to economies across the globe going into physical lockdown and financial freefall. Entire populations are adapting to the “stay at home” edict, to safeguard the vulnerable – and some of these changes will lead to long-lasting or perhaps permanent changes in the way we live or work. This note describes some of our client companies whose business models are well adapted to these changes, or who might see a change in long-term structural demand.
Companies: AMO BGO FDM GAMA KAPE LOOP TERN ZOO
In a remarkable coup for Bango, Korean technology leader NHN Corp is taking control of the Audiens Customer Data Platform (CDP) business by investing £6.5m for a 60% stake in the holding company, Bango Deep Ltd, with a view to scaling up Audiens through support and technology into a truly world-class CDP provider. NHN is further securing and deepening its relationship with Bango itself by taking 3.5m Bango ordinary shares (4.7% of the expanded Bango) for £3.2m. This is an excellent deal for Bango, sealed at a time of restricted travel and tightened commercial prospects and possible only because Bango is already partnered, and trusted by the Korean technology giant. The deal takes a non-core, near-breakeven business off the Bango P&L and sharpens management focus, while maintaining a substantive interest in what – now backed by NHN’s cash, expertise and data technology – should become a major global player in the lucrative, high-growth CDP market. On top of this, Bango strengthens its balance sheet with a cash injection and the strategic partnership between NHN and Bango itself is substantively deepened. We adjust our FY 2020 forecast for the change in Audiens accounting status and the cash injection, and highlight the value.
Bango has announced the expansion of its strategic relationship with NHN Corp, the Korean big data giant. NHN is investing £6.5m to take a majority interest in the Audiens business, owned by Bango. For its investment NHN gains a 60% stake in Bango Deep, the Bango subsidiary which owns the Audiens Customer Data Platform (CDP). NHN will inject its data science technology into Audiens to grow it into a world leading CDP. In addition, NHN has also subscribed for 3.5m new ordinary shares in Bango – 4.7% of the group’s existing ordinary share capital. Bango paid approximately £4m for Audiens. NHN is paying £6.5m for 60% of that business. We revise estimates following the announcement to reflect that Audiens will no longer be fully consolidated in Bango’s accounts. We believe the deal validates Bango’s investment in Audiens and represents a significant vote of confidence in both the data monetisation business and in Bango itself, by a highly successful commerce leader.
The company announced several appointments that have strengthened the management team after seven acquisitions over the past two calendar years. We believe this investment in management should form a strong foundation for the company’s next phase of growth. Alex Siffrin, the company’s largest shareholder, has stepped down from the board to focus on personal priorities
Companies: Centralnic Group
A strong interim period to January 2020 delivered the expected £26m revenue as reported in the February trading update, with a 31 January net cash balance also of £26m – EBITDA of £5.6m (post IFRS16), and adjusted PBT of £4.6m highlighting a strong performance. The Group has unchanged strategic ambitions – organic growth and M&A, both in evidence in Rail Technology & Services (RT&S) with 13% organic growth and the post period end acquisition of iBlocks. We withdrew forecasts last week due to the impact of COVID-19 on the 2H-weighted Traffic & Data Services business, given the exposure to cancelled large scale summer events, and uncertainty over traffic surveys; however, the potential for the Group is unchallenged when the world normalises. New contract wins, new product launches, new acquisitions and a hearty balance sheet continued to offer significant upside in 1H and post period end. Target price 900p remains based on our FY21 forecasts, which in theory should be consistent with previous forecasts and we look forward to reinstating numbers when the virus dust settles.
Caledonia today announces that it has taken the prudent decision to defer its approval for the payment of the second quarterly dividend (7.5c/sh - $0.9m - 7% of declared Caledonia cash). The Blanket mine in Zimbabwe remains in operation (at a slightly reduced capacity to secure Covid-19 social distancing) and the mine site remains well-stocked with supplies, so despite the current difficulties getting supplies from South Africa production at the mine can continue for some time to come; 2-3 months in our opinion, if the supply chain from South Africa ceased altogether. Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning, the group has released an update in light of COVID-19. The Board reports that it has taken swift action to re-engineer processes to adhere to government guidelines, whilst maintaining client service levels. Q1 2020 trading is reported to have been ‘broadly' in line, with revenue growth of 40% from continuing operations and outstanding orders to ship to customers in the coming months. Q1 was cash neutral, which follows on from the RNS on 5 February, of a net cash position of £849k as at 31 December 2019.
Companies: Caledonia Mining Corporation Plc Com Shs Npv Touchstar
Yesterday’s trading update confirms that IQE’s FY19 results will be in line with the revised guidance it provided in November when the full extent of the impact of the US-China trade war became visible. We have cut our FY20 revenue estimate by 6%. In IQE’s case the impact of COVID-19 on global handset demand is likely to be softened by gaining share in both the wireless and photonics markets. However, the full effect of the pandemic on the global economy and IQE’s business remains to be seen.
FIH's year end update this morning reveals an inline performance in the year to March 31st 2020, notwithstanding disruption over the past six weeks, and also updates on the respective likely effects of Covid-19 on its three business streams, with greater relative resilience seen in the Falklands business and bigger impacts already apparent on the two UK-based businesses, not surprisingly. We note that PTY, in line with requests to companies from the FCA and FRC, is formally delaying its results announcement for FY2019A (year to December), which would in the normal course of events have been published today. A new release date will be issued in due course. Re 2019, the company highlights its update from January indicating inline P&L performance in FY19A combined with good progress on cash resulting in an anticipated net positive cash situation at the year end.
Companies: FIH Group Parity Group
WANdisco recently confirmed that its Fusion product is on track for full availability with Microsoft ‘in the next few weeks’. In this audio clip CEO David Richards describes the commercial implications of this and how the business is navigating the challenges of COVID-19. WANdisco’s proprietary replication technology enables its customers to solve critical data management challenges created by the shift to cloud computing. It has established partner relationships with leading players in the cloud ecosystem including Amazon and Microsoft.
Software stocks that enable corporates to sell more, improve quality, cut costs, save employees time and/or reduce their ‘carbon footprints’ are ideally placed in today’s tech/ESG world. Cue Elecosoft, who said this morning that 2019 PBT would be “ahead of LY” (£3.67m) and “in line with expectations” (consensus £4.1m) - despite being impacted by forex (ED est -2%, weaker SEK vs £) and macro uncertainties (eg Brexit, General Election and subdued Eurozone). We think this is a creditable outcome. Not least because it underlines the resilience of the business - while the results are actually a touch better than our previous (bottom of the range) profit & cashflow estimates, albeit with revenues a smidgeon shy.
H120 numbers show continued 15% organic revenue growth with a slight shift in the mix to direct sales from connectors and the continued themes of strong (33%) International growth, strong growth in new Functionality and rising (+14%) ARPU. At present just about 20% of group sales come from clients using more than one communications channel, giving dotDigital a considerable omni-channel cross-sell opportunity.
Companies: Dotdigital Group
Cerillion is a fast-growing supplier of software solutions (OSS/BSS) to the telecoms industry. Over the past two years it has outgrown the sector, whilst increasing EBITDA margins and cash flow. The company is now at an inflection point where it is signing more high value contracts due to its growing reputation, product suite and support capabilities. In the short-to-medium term we view coronavirus-related spikes in data traffic as a positive driver, as network operators are forced to maintain or expand investment plans. Longer term, we see the business as an attractive M&A target while also benefiting from structural changes in the telecoms industry that increasingly favour smaller and more flexible suppliers. We initiate with a Buy recommendation and 225p target price.
Bango has announced FY 19 results in-line with the December-19 trading statement and our forecasts. The business has grown strongly throughout the Brexit hiatus, notably FY 19 saw the key End User Spend (“EUS”) metric double once again to £1.1bn. With the global macro-economic situation continuing to be impacted by the Coronavirus, we believe market attention will focus on the outlook. The release confirms that Bango has no supply chain dependencies, its products are available without interruption. Furthermore, management has re-iterated its expectation for continuing exponential growth in EUS. We maintain FY 20E estimates following the release and will revisit as visibility on “stay at home” behaviour improves.