Altitude Group (ALT): Corp | Avingtrans (AVG): Corp | InnovaDerma (IDP): Corp | Open Orphan (ORPH): Corp | Quixant (QXT): Corp
Companies: ALT AVG IDP QXT ORPH
QXT has performed much better than feared in the face of unprecedented H1 challenges. COVID-19 closed both casinos and gaming machine factories around the world, halving its Gaming Division revenue. However, Densitron sales and earnings held up well, and swiftly implemented strict financial discipline saw group H1 adj. LBT minimised to just $1.2m, with cash outflow under $2.0m leaving net cash of $14.2m. Following Q3 trading and cash collection, QXT enters Q4 with a very comfortable $17.4m of net cash and conservatively targeting sufficient H2 profit to bring it back to breakeven across the year at the adj. PBT level. We reintroduce FY 2020 forecasts, expecting FY revenue down 35% YoY at $60m but avoiding a material loss and significant cash outflow. Some older products were discontinued in the pandemic, incurring an exceptional R&D impairment, but business operations, quality reputation and customer relationships have all been carefully preserved and the outlook is bright. Adversity brings opportunity and Quixant has a range of strategies to help customers regain momentum as the global casino industry recovers, while Densitron is in the process of adding medical equipment to broadcast as a specific target market. Clearly these are early days in the recovery - we are withholding FY 2021 forecasts for now - however the group has fared much better than in the pessimistic scenarios feared in March and is in a very strong position to benefit from recovery in its global end markets.
Companies: Quixant Plc
Ideagen (IDEA): Corp | Open Orphan (ORPH): Corp | Quixant (QXT): Corp
Companies: IDEA QXT ORPH
Barkby Group (BARK): Corp | eve Sleep (EVE): Corp | Iofina (IOF): Corp | Quixant (QXT): Corp | Touchstone Exploration (TXP): Corp | Tristel (TSTL): Corp
Companies: IOF QXT TSTL TXP EVE BARK
Hardide (HDD): Corp | Ideagen (IDEA): Corp | Quixant (QXT): Corp
Companies: HDD IDEA QXT
Access Intelligence (ACC): Corp | Avacta (AVCT): Corp | City of London Group (CIN): Corp | InnovaDerma (IDP): Corp | Quixant (QXT): Corp
Companies: AVCT IDP QXT ACC CIN
The FY 2019 results were released in a detailed trading update last week so there are no surprises today. As previously stated, the global shutdown for an indefinite period brings material uncertainty to demand across all divisions and QXT has withdrawn guidance and the dividend is paused this year. Nevertheless, we are confident that QXT remains well managed, with a strong business model and a healthy pipeline of prospects. Underpinned by a current $17.7m net cash and a property-rich balance sheet, the long-term opportunity for QXT remains robust. In fact, COVID-19 pressure may be a catalyst for increased outsourcing across the Electronic Gaming Machine (EGM) industry.
ANGLE (AGL): Corp | Europa Oil & Gas (EOG): Corp | Hardide (HDD): Corp | Intercede (IGP): Corp | M.P. Evans (MPE): Corp | Quixant (QXT): Corp | Synairgen (SNG): Corp | Tremor (TRMR): Corp | Trifast (TRI): Corp
Companies: EOG HDD IGP MPE QXT SNG TRMR TRI AGL
FY 2019 results will be released next week but this update reveals they are in line with forecasts. The supply-side issues of COVID-19 are easing and have been well managed with minimal disruption; however, the global shutdown for an indefinite period brings material uncertainty to FY 2020 demand across all divisions and QXT has withdrawn guidance pending greater visibility. Prudently, the dividend will also be paused this year. Nevertheless, we are confident that QXT remains well managed, with a strong business model and a healthy pipeline of prospects. Underpinned by $17.7m net cash and a property-rich balance sheet, the long-term opportunity for QXT remains robust. In fact, COVID-19 pressure may be a catalyst for increased outsourcing across the Electronic Gaming Machine (EGM) industry.
Altitude Group (ALT): Corp Proposed disposal of ADP | Europa Oil & Gas (EOG): Corp Wressle economics highly robust | LPA Group (LPA): Corp COVID-19 update and Board appointments | Morses Club (MCL): Corp Substantial immediate upside opportunity in share price | Quixant (QXT): Corp Coronavirus delays audit sign-off for a week | Revolution Bars Group (RBG): Corp COVID-19 trading update | Synairgen (SNG): Corp COVID-19 Phase II trial to start imminently
Companies: ALT EOG QXT RBG SNG LPA
Minds + Machines (MMX): Corp Strong H2 underpins forecasts and maiden dividend | Quixant (QXT): Corp Market weakness impacts H2 and cautions on FY 2020 | Tremor (TRMR): Corp Reassuring trading update after a transformational year
Companies: MMX QXT TRMR
Today’s trading update notes further softness in the gaming market last year. Guidance was cut in September on reduced demand from two large customers (notably Ainsworth) losing market share/floor space in the casinos. In the following months to the YE, Quixant experienced weaker demand for core gaming platform units across the wider client base, indicating general uncertainty amongst global machine manufacturers. FY 2019 revenues and adj. PBT will thus be below forecasts at $92.3m and $10.7m (down 20% and 40% YoY respectively) although H2 cash generation appears to have been strong, leaving $16.2m net cash at YE ($15.2m expected). Given this uncertainty we have cut our growth expectations for the year ahead to the very minimum likely case to rebuild confidence. The operational gearing increases the earnings impact. In light of the strong cash position, our dividend forecasts are unchanged. The issue of visibility has been addressed with the appointment of a new Sales Director this month and the introduction of improved systems during Q4 2019. The new sports-betting terminals should start to boost sales in 2020 and in 2021 we should see growth from a sizeable new customer in Japan. QXT remains well- funded, profitable and cash generative. Although facing short-term headwinds, it retains an excellent position to benefit from the underlying outsourcing trend in the global gaming machine industry. We ease our TP to 250p on this update.
The Interims have been brought forward in light of a warning on H2. Quixant had previously flagged that 2019 would be heavily H2-weighted and H1 is weak but in line with expectations. However, a recent review of customer intentions reveals that H2 orders will not meet expected volumes. The global gaming machine market is still healthy but key customers (notably Ainsworth) have lost significant market share to Aristocrat in Australia and N. America. We cut our FY 2019 and FY 2020 forecasts; however, no customers have been lost and the concentration is much reduced while the long-term growth potential and cash generation remains strong.
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The group’s H1 trading update is reassuring, with a strong first half, pointing to a continuation of previously indicated trading patterns. Revenue and profit has been resilient, while cash flow has been strong, returning to normalised patterns having repaid PAYE and VAT and also its final dividend in September. H1 trading benefited from a strong order book heading into the lockdown and due to some delays in order intake over recent months has an order book around 7% less than last year. Management is cautiously optimistic, but still considers that the trading outlook remains uncertain, so guidance remains withdrawn. As such, we look to the December interims to resume forecasts, when order visibility will be clearer.
Companies: Solid State plc
IG Design Group’s H1 trading update for the six month period to 30 September has delivered both top and bottom line performance ahead of management expectations, driven by a strong recovery in Q2. Group revenues rose by 40% including the CSS acquisition. Excluding CSS, sales were just 8.3% down, having been down 11.7% on an LFL basis in Q1. Customer orders now exceed 80% of full year revenue forecasts. This robust sales performance has been accompanied by significant deleverage with period end net debt of $23.2m, compared with $106.1m last year. CSS is now fully integrated and focussed on delivering sales opportunities, with cost synergies ahead of schedule. While H1 performance suggests forecast risk is weighted to the upside, management prudently highlights caution on the FY21E outturn given the continuing Covid backdrop and associated risks, hence our unchanged forecasts at this stage.
Companies: IG Design Group plc
Today’s announcement confirms the strong trading momentum seen in Q1 has continued YTD. Group sales are +45% YOY with revenue growth across all geographies and brands, and profitability improving YOY.
Companies: boohoo group Plc
Zytronic’s year end update highlights the impact of the pandemic on the year to 30th September. Sales reduced to £12.7m (FY19: £20.7m) but, encouragingly, EBITDA for the year was positive. Cash at the year end was £14.0m (FY19: £13.1m), which has increased by £1.6m since 31st March. Uncertainty remains over demand levels, particularly within the Gaming and Financial sectors, but the Group is in a strong financial position with a strong balance sheet and well invested operations. We will reinstate forecasts as visibility improves. A further update will be provided alongside the Group’s preliminary results, which are expected to be published in early December.
Companies: Zytronic plc
Solid State’s post-close trading update states that, despite the coronavirus pandemic, it expects to announce revenues and adjusted profits for H121 that are similar to those for H120, which was a record first-half performance for the group. Although management notes some delays in order intake and a shortening of client order scheduling related to the uncertainty caused by the pandemic, it currently anticipates that FY21 performance will be similar to that for FY20.
Q3 figures beat expectations with a strong volume/mix and a significant acceleration in emerging markets. Even so, no return to FY20 guidance.
Companies: Unilever PLC
Reckitt reported stronger than expected Q3 20 revenue growth of 13.3%, on an lfl basis, to £3.5bn, driven by strong growth in Health (+12.6%) and Hygiene (+19.5%). Factoring in FX headwinds of 6.4pp, reported growth came in at 6.9%.
Management upgraded FY20 top-line growth expectations to low double-digit (vs high single-digit earlier) while keeping EBITDA guidance unchanged (350bp margin contraction vs FY 19). Following the strong Q3 performance, we will raise our estimates as well as the target price.
Companies: RBN RB/ RB 3RB RBGPF
Transense Technologies (Transense) is a developer and manufacturer of sensor technology and equipment. The recent transfer of the assets and licensing of iTrack IP is game changing as far as the future is concerned and leaves Transense with two existing sensor divisions, plus a royalty income stream which we conservatively forecast to grow from a current run rate of c.£0.6m pa to £2.3m in FY2023 and strong cash generation. Q1 2021 results indicate a near breakeven position and having reached an important inflexion point in its development we consider Transense to be an extremely attractive investment opportunity at the current share price.
Companies: Transense Technologies PLC
CAP-XX Ltd* (CPX.L, 4.5p/£19.9m) | Gfinity plc* (GFIN.L, 3.8p/£28.9m) | MTI Wireless Edge Ltd* (MWE.L, 44p/£38.7m) | Newmark Security plc* (NWT.L, 1.175p/£5.5m)
Companies: CPX GFIN MWE NWT
Trackwise Designs has signed a three-year product manufacture and supply agreement with a UK electric vehicle OEM. The agreement is potentially worth up to £38m in total, subject to pricing revisions, and will generate up to £5.0m in revenues in FY21. This will be the first full series production of flexible circuits incorporating Trackwise’s Improved Harness Technology (IHT). The agreement represents a step change in sales as total revenues for H120 were £2.4m, of which IHT was only £0.3m.
Companies: Trackwise Designs Plc
Trackwise Designs has developed a proprietary, proven technology, IHT, for manufacturing extremely long, flexible circuits that can replace conventional wiring harnesses. This disruptive technology is applicable to many industries including electric vehicles (EVs), medical devices and aerospace. Trackwise has already manufactured prototypes for customers in each of these sectors and received its first series production order from an EV manufacturer this September. Since IHT is an adaptation of the proven technology Trackwise uses for making advanced printed circuits, IHT has the transformative potential of a new technology but with much less risk.
For fighter pilots, it is a minimum requirement. But having 20/20 ‘visual acuity’ (correct term) does not necessarily mean you have perfect vision (as convention assumes); instead, it indicates sharpness and clarity of vision at a distance. It is measured by a Snellen Chart, which displays letters of progressively smaller size and whereby 20/20 means that the test subject sees the same line of letters at 20 feet that a person with normal vision sees at 20 feet (or 6 metres; but 6/6 simply didn’t catch on).
Companies: ABBY BDEV BWY BKG VTY CRN CSP CRST GLE GLV INL MCS PSN RDW SPR TW/ WJG
The covid-19 pandemic has had a devastating effect on the share price of property companies, with 31% wiped off the value of their total market capitalisation during the first quarter of 2020.
Companies: AEWU CREI CSH BOOT INL HLCL THRL SUPR RESI RGL DIGS GR1T SOHO PHP EBOX ASLI UTG AGR UAI BLND UANC CAL SHED CWD WHR EPIC WKP GRI YEW HMSO PCA CCRGF NRR
Zytronic’s interims, as expected, confirm a reduction in revenue and profitability consistent with the lower level of order intake towards the end of CY19. Encouragingly, sales and order intake improved considerably in February and March. This momentum has been frustrated by the impact of COVID-19, causing supply and logistical issues as well as an inevitable drop in demand. The Board acknowledges the challenge of providing anything beyond very short term guidance. We have therefore withdrawn our forecasts at this stage and will review the situation as visibility improves. We believe Zytronic is well positioned to emerge strongly as and when demand normalises.
As expected, the group’s business in the first quarter has been heavily impacted by the pandemic-led store closures, especially in EMEIA and the Americas.
Although the sales recovery in Mainland China was encouraging, the worldwide shrinking tourist flows and the reduction in foot traffic in reopened stores have led the group to provide a very cautious outlook for Q2 20/21.
The group’s greater dependence on travel retail and lower exposure to leather goods are making the group less resilient compared to its peers.
Companies: Burberry Group plc