Kindred Group’s all cash offer for 32Red marks a meaningful and well-priced entry into the UK online casino market. With robust FY results and 20% growth in Q117 net gaming revenues, our standalone 32Red forecasts are largely unchanged, underpinned by continued margin expansion and high cash generation. Within an enlarged group, there should be additional revenue and cost synergies, suggesting upside to our numbers. Consideration is expected to be paid in mid/late May.
IQE and Next Fifteen Communications are entering the FTSE AIM UK 50 index later this month, while Primary Health Properties could be the next former AIM company to join the FTSE 250 because it is included on the reserve list for that index. Semiconductor wafers supplier IQE and PR group Next Fifteen, both of which have benefited from the decline in sterling because of their international operations, are replacing Gemfields and Arbuthnot Banking. The IQE share price has trebled since its low last
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Offer represents a 16% premium, and is all but confirmed with Kindred securing 71% of votes
32Red has agreed an all cash takeover by Kindred, at 196p per share. Together with an approved 4p dividend, this represents a 32.4% premium to last month’s average. This equates to 10.6x EV/EBITDA and 14.3x P/E for 2017, a small premium to the larger peer group. Given 32Red’s brand strength, regulated bias and growth momentum, this appears justified.
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32Red's growth was driven by Roxy Palace acquisition and Italian operations
32Red has announced a positive 2016 post-close trading update and strong current trading with a 21% increase in January revenues (to 30th). We expect 2016 EBITDA to have doubled to £10.5m (a marginal reduction on our previous forecast due to lower win margins), helped by the highly accretive Roxy acquisition. Our unchanged 2017/18 forecasts are for continued very strong profits growth as the business scales up, with more favourable supplier agreements and Italy now in profit. The 2017e EV/EBITDA
32Red’s brand punches above its weight in the UK online casino market. Management has adopted a more aggressive stance since mid-2015, both in terms of marketing and with the highly accretive £8.4m Roxy Palace acquisition. Interims show H116 EBITDA rising to £4.5m (H115: £1.2m) and we initiate with forecast EPS more than doubling in 2016 and growing by over 65% between 2016 and 2018. Yet the 2016e P/E is only 13.5x and our peer group comparison and DCF suggest a value of 193-247p per share, 46-8
TTR Agreement, 7DIG Contract, ALSP Director Change*, CLIN Agreement, CRX Launch, DEMG New Accounts, DSG Partnership, GLID Share Sale, HZD Agreements, LID Agreement, MDZ Placing*, SAR Board Changes*, SEE Term Sheet, SNTY Contract Win, TAL Trading Update, VRS MoU
Companies: TTR 7DIG ALSP CLIN CRX DEMG DSG GLIF MDZ SAR SEE CALL VRS LDRUF
Arian Silver Corporation (AGQ.L) –CORP: Financing update | 32Red (TTR.L): Interims | RapidCloud International (RCI.L): Interims
Companies: AGQ TTR RCI
Motif Bio plc (MTFB.L) – BUY*: £22m placing to be completed | Alexander Mining (AXM.L) – BUY*: Australian patent | 32Red (TTR.L): 1H trading update | Mi-Pay (MPAY.L): Trading update
Companies: AXM TTR MPAY
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The final results are in line with forecasts, confirming exceptional growth in the year. The group has also announced a second special dividend of 50p per share taking the total special dividend for the year to 90p per share.
Companies: Best of the Best plc
HeiQ has announced the acquisition of Life Material Technologies (Life), a materials technology company focused on antimicrobial additives and treatments used by plastics, coatings, textiles, ceramics and paper manufacturers. Life generated revenues of $3.6m in 2020A and HeiQ will pay $6.45m for 100% of the business, in a combination of cash ($2.55m) and new shares ($3.9m), with an earn-out of up to $2.8m to be based upon Life's FY21E financial performance. The pre-earn-out acquisition multiple
Companies: HeiQ PLC
As midsummer’s day looms (where has this year gone?), there is greater optimism, in general, than may have been anticipated a few months ago. A post-pandemic, ‘vaccine-driven’ recovery demonstrated by increased consumer spending as lockdown measures are lifted has been one of the catalysts. The FTSE 100 has been range-bound in the last month 6,900-7,100. We have seen a combination of broadly positive company results across a range of sectors, further examples of M&A activity and a sequence of ne
Companies: AMYT ARBB ARW BAG BEG BONH BWNG CWK DNK EML EPWN FBD FA/ GPH GSF GNC HUW IGC INSE KAPE KP2 MMAG NRR NESF OTMP ROL RUA SEN SUR TON TOU TXP TGL VLS WINK
Loungers has re-opened with a flourish, recording LFL
sales growth +26.6% since 17 May (vs 2019) and adding five new sites. This
stronger than expected restart leads us to upgrade FY21E Group EBITDA by 22%
(from £11.0m to £13.4m) and FY22E by 5% (from £40.4m to £42.5m) resulting in
our TP moving to 350p (from 330p). In addition, Loungers ended FY21E with
£34.6m of net bank debt putting it in a strong position to accelerate its roll
out and capitalise on the availability of premium sites. W
Companies: Loungers Plc
Brighton Pier Group (BPG) has announced a highly complementary acquisition of Lightwater Valley Attractions Ltd (‘Lightwater'), which owns and operates a leading family theme park in North Yorkshire, for up to £5.0m (c5x normalised EBITDA). We upgrade our forecasts to reflect this earnings enhancing deal (FY22E Adj EPS increased by 14% to 6.4p). With outlook appearing very positive for the group, and the shares trading on an undemanding FY22E Adj P/E of only 9.0x, we reaffirm our Buy rating.
Companies: Brighton Pier Group Plc
After a multi-year journey, somewhat accelerated by the Covid crisis, Motorpoint has set a new and exciting growth agenda that seeks to strengthen the Group’s position as the UK’s leading omnichannel vehicle retailer. Through an attractive combination of physical site growth (using smaller sites), ongoing investment behind an already established fully end-to-end online proposition and greater utilisation of supply chains into the Auction4Cars wholesale channel, Motorpoint is targeting a doubling
Companies: Motorpoint Group Plc
Unprecedented times over the past 12 months have seen ScS Group deliver an exceptional set of H1 2021 results, dominated by the surge in orders post Lockdown 1.0. Group revenue grew 14.4%, with an incremental gross margin, tight cost control and UK government support (£6.6m) underpinning EBITDA* of £19.5m (£3.8m in H1 2020). We believe the average net cash through the period was c£97m (c£60m excluding customer balances). H2 2021 visibility remains low, with post Lockdown 3.0 demand uncertain, th
Companies: ScS Group plc
HeiQ announced the acquisition of Life Material Technologies, Hong Kong, (LIFE) on 15 June, a move which will strengthen its antimicrobial technologies platform. The initial consideration is $6.45m with a potential earn-out consideration payable in 2022 of up to $2.8m. LIFE’s antimicrobial technologies are applicable not only to textiles, with some notable retailers in its customer base, but also to polymers and other coatings, thereby complementing HeiQ’s push into materials beyond textiles and
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 fa
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Revolution has successfully raised £21m gross to reduce debt, accelerate the portfolio refurbishment plan and allow the business to take site acquisition opportunities as they arise. It allows the company to strengthen its balance sheet, shake off the economic equivalent of long-COVID and return to growth. We are changing our EPS (dil. adj.) forecasts to -0.2p for FY22E and to 0.9p for FY23E. The positive impact of the fund raise should be immediate and grow progressively until FY24E to capture
Companies: Revolution Bars Group Plc
AVO’s goal is to deliver an affordable and novel PT system, called LIGHT, based on state-of-the-art technology developed originally at the world-renowned CERN. Over the past two years, important technical milestones have significantly derisked the project. Now, AVO is working on the verification and validation phase, prior to LIGHT being used on the first patients to support CE marking. In its recent technical update, the company highlighted progress made over the past three months towards a ful
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6 months into the merger with Dominium and initial progress around unlocking value are encouraging. Positive momentum and higher average spend at stores with the new integrated menu are being observed, operational integration has progressed broadly in line with expectations and post recent easing of lockdown restrictions, average dine-in daily sales have risen strongly whilst delivery metrics continue to impress. It is early days but directionally all encouraging heading into the busier H2 perio
Companies: DP Poland PLC
The group has announced a broadening and strengthening of the board through two new appointments. We introduce an additional two years of forecast and raise our target price to £31.
Today’s news includes several exciting milestones. 1) The formal sale process/offer period has concluded, with Education sold for £30m. 2) This successfully pivots STU to focus entirely on its fast growing online Studio business, which has traded strongly in Q4. 3) FY adj PBT is c10% better than pre-restricted forecasts as a result, and 4) strong FCF/sale proceeds catapult it into a small net cash position (excl. securitisation). Along with a pension scheme surplus, this is transformational and
Companies: Studio Retail Group plc
Catena Group (CTNA.L) to complete reverse takeover and be renamed Insig AI and is acquiring the remaining shares of Insight Capital Partners. Insight, which is based in the UK, is a data science and machine learning solutions company that provides bespoke web-based applications, advanced analytical tools and modern technology infrastructure to make machine learning accessible to investment professionals. Insight has developed five products specifically aimed at accelerating an asset manager's d
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