Companies: ALT MMX ZAM
Altitude Group (ALT): Corp | Avingtrans (AVG): Corp | InnovaDerma (IDP): Corp | Open Orphan (ORPH): Corp | Quixant (QXT): Corp
Companies: ALT AVG IDP QXT ORPH
Altitude Group (ALT): Corp | Avingtrans (AVG): Corp | LPA Group (LPA): Corp | Open Orphan (ORPH): Corp | PCI Pal (PCIP): Corp | Photo-Me (PHTM): Corp
Companies: ALT AVG PHTM PCIP LPA ORPH
Altitude Group (ALT): Corp | Barkby Group (BARK): Corp | Byotrol (BYOT): Corp | Tristel (TSTL): Corp
Companies: ALT BYOT TSTL BARK
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
Altitude Group (ALT): Corp Major strategic alliance | Tremor (TRMR): Corp News Corp strategic partnership and Unruly acquisition
Companies: Altitude Group plc (ALT:LON)Tremor International Ltd. (TRMR:LON)
Companies: SRB KGH NUOG ALT BOKU SHED TRMR GWMO PHE ORPH
Altitude Group (ALT): Corp | Belvoir Group (BLV): Corp | Robinson (RBN): Corp
Companies: ALT RBN BLV
Companies: BSE ALT TEK BRH OCI KLR SDRY ROCK NWF RBN
Altitude has delivered interims highlighting revenue growth of 43% vs 1H18 including the benefit of the January acquisition of US-based AIM Mastermind. US revenue increased to $2.8m in the period ((vs $0.3m in 1H18) including $2.5m from AIM, of which $1.9m related to 2Q. The focus remains on the development of the US business, with accelerated hiring and training and establishment of a new office to cultivate and execute on the three key variables in the model: the total c.$1.2bn spend of the combined AIM member base (currently $2.1bn of aggregate sales 2,185 members); the preferred supplier coverage of that spend (currently 25% of the c.60% of addressable non apparel promotional products member gross revenue); and the service fees payable by the Preferred Suppliers based on the resulting purchase orders (expected to be in the range of 3-6%). We look forward to updates and reiterate our 12-month target of 120p, as the model firms up, given the January acquisition and bedding in, then only one quarter in effective operation in the period to interims.
Companies: Altitude Group plc
Altitude Group (ALT): Corp Interims: building the base Altitude has delivered interims | Nasstar (NASA): Corp Interims: efficiencies delivered | President Energy (PPC): Corp Interim results | Tri-Star Resources (TSTR): Corp Interim results 2019
Companies: ALT PPC TSTR
Entertainment AI (EAI) - This was an RTO into Blockchain Worldwide (BLOC), It has also transferred from the standard list to AIM. Focused on providing its global automotive and lifestyle audiences and its strategic partner audiences with real-time access, in a frictionless way, to "in the moment" opportunities from more relevant short form video content to "one-click" e-commerce, £8.6m raised. H1 2019 actuals - GTChannel subsidiary's MCN gross advertising revenue at $8.7 m, up 107%
Companies: ALT MPM PYC IQE THR CPT SOLI SAV SEE AMYT
Altitude Group (ALT): Corp Trading update – growing up in public | Alumasc (ALU): Corp Full-year results in line | M.P. Evans (MPE): Corp Purchase of minorities accretive to sum of parts | Morses Club (MCL): Corp Strong position confirmed | PPHE Hotel Group (PPH): Corp Returns from investment programme growing
Companies: ALT ALU MPE
Altitude Group (ALT): Corp Prelims: Progress since acquisition | Kingswood Holdings (KWG): Corp Eyeing the throne
Altitude prelims are in line with expectations and lead to unchanged forecasts. The focus on the performance of AI Mastermind (since rebranded AIM Smarter (“AIM”)) has continued to deliver momentum in member numbers (up 10% since January 2019). With the extension of the supplier partner agreements to cover all transactions with members, not just transactions on the AIMPro platform, the focus on ‘onboarding’ is now eased in favour of signing up suppliers to commit to service fees to Altitude/AIM regardless of how the order is placed with the supplier – this has already been achieved for 149 suppliers. Prospects remain strong, the acquisition is delivering the potential outcome in line with unchanged forecasts, and the valuation continues to expose more and more upside as proof of execution success is forthcoming. Our 140p target is reiterated and we look forward to a continuing news flow and the development and execution of a simplified set of KPIs to demonstrate growing service fees from a growing transaction flow from a growing number of distributors.
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Kape has today announced the successful, heavily oversubscribed raise of $115.5m from a mix of new and existing shareholders. The raise has been undertaken at a share price of 150p/share representing an 2% discount to prior close, and exceeds the initially targeted raise of $100m. $72m of the proceeds will be utilised to buy-out issued and eliminate deferred shares due to legacy founders of Private Internet Access (‘PIA’) which was acquired in Nov’19. The remaining $43.5m will be held for acquisition and R&D investment. We note that PIA’s executive team (CEO, CTO and COO) who joined Kape alongside the acquisition last year are all remaining in the business, with PIA’s founders only nominally involved post acquisition. The benefits to Kape are three-fold: 1) the raise increases liquidity within the shareholder register; 2) Kape is acquiring founder shares at 145p/share, an 3% discount to the price of the raise; and 3) the beneficial tax structure created at acquisition shifts to Kape shareholders (as opposed to PIA founders) creating a c.$50m cash benefit to Kape recognised linearly over 15 years. Updated forecasts for FY’21E generate FCF of $28.2m, representing a 7% yield.
Companies: Kape Technologies Plc
Kape has announced that it has raised gross proceeds of $115.5 million through a significantly oversubscribed placing and retail offer of 59.2 million shares at 150p and will use $72 million of the proceeds to buy out the two major vendors of PIA, the transformational deal which the Group completed at the end of 2019. The remaining $43.5 million will be used to strengthen the Group’s balance sheet as it looks to select further acquisitions. There is an additional tax-related cash benefit of around $50 million over 15 years that is now available to Kape following this change to the PIA deal structure. This seems an intelligent way of removing any potential share overhang while also adding further to the group’s M&A firepower. Kape will cancel the shares which it acquires from the vendors and will not issue the vast majority of the deferred shares. With trading still robust and guidance unchanged, we make no alteration to our underlying business assumptions. Our EPS estimates reflect the changes to the shares in issue, both existing and prospective.
Tremor has announced in today’s trading update that its platform has continued to gather further momentum since H1 20 results on 22 September, and it now expects FY20 revenue and EBITDA to be in the range of $340-360m for revenue and $30-36m for EBITDA. This leads us to upgrade our FY20 revenue forecasts by +6% to $350m from $330m, and upgrade our FY20 EBITDA by +32% to $33m from $25m at an incremental margin of 40%. This reflects that Tremor’s platform benefits from strong operational gearing that translates to EFCF, and we increase our FY20 net cash to $79m from $71m. This strengthening momentum for Tremor’s differentiated platform reflects that it is capitalising upon a rebound and shift in advertising spend through the success of the initiatives it launched in 2019 and the successful integration of Unruly, and we explain these factors in more depth from p9 of our 22 September report. Today’s announcement also marks the second upgrade to our Tremor forecasts since COVID-19 impacted the advertising market and Tremor in Q2, and this reflects that Tremor has adopted a prudent approach to its guidance. Applying a similar approach to our estimates, we conservatively do not change our FY21 forecasts, and this means that we continue to forecast FY21 organic revenue growth to $420m or +20% YoY, with organic EBITDA growth to $55m or +67% YoY. This conservative, strong FY21 organic growth means that Tremor looks substantially undervalued on 7x FY20 EV/EBITDA or 5x NTM, and a NTM EFCF yield of 6%; vs peers on 13-19x EV/EBITDA with NTM EBITDA growth of 18-47%, and EFCF yields of 1-2%.
Companies: Tremor International Ltd.
Kape’s interims saw Group revenues rise +97% y/y to $59.0m (organic: +12%), driven by a 245% increase in Digital Privacy sales (+47% organic). Organic growth was stronger than anticipated in Digital Privacy, above N1Se estimates of 30%-40% as a function of strong end-user demand. CyberGhost (VPN) and Intego (end-point protection) subscriber bases grew +10% and +11% h/h respectively. The main takeaway is Kape’s inflection to positive FCF ($6.7m; H1’19: -$1.8m) alongside increased cash investment into customer acquisition (+60% y/y to $29m). We see meaningful cash flow margins (>25%) being delivered in the next 1-2 years, with £31m of FCF forecast for FY’21E generating a 6.3% FCF yield (peers offer 3.5%-4%). Putting Kape on a 4% FCF yield implies an intrinsic value of >£3/share.
Kape has enjoyed a good first half of 2020 both in terms of operational progress and financial performance. Revenues increased 97% to $59.0 million (H1 2019: $29.9 million), a 12% increase on a pro-forma basis. The interim results reflect the Group’s continuing success in integrating its Private Internet Access (PIA) acquisition while growing subscriber numbers – now just shy of 2.4m in total - across the businesses. The focus on customer lifetime value is evident in the marketing spend and investment in new product development. Kape remains on track to meet previous guidance for the full year and expects to deliver synergies from the PIA deal at the top end of the mooted range. We believe that the Group has good revenue visibility and it continues to maintain a high level of user retention at 80%. We make no changes to estimates other than to reflect a higher amortisation charge. In our view, the interim results show that Kape continues to display the drive and capacity to meet the growing needs of consumers for digital privacy and security products in a rapidly evolving marketplace.
4imprint’s trading update indicates some encouraging signs, albeit within continuing general caution around the impact of COVID-19 on the US economy. Average order value is increasing as the proportion of apparel in the mix rises, with overall weekly revenue over the last four weeks around 65% of prior year. This is in line with the assumptions underlying our model and there are no changes to our forecasts. The group has a strong balance sheet, with $40.1m of cash at end October (lease debt only). We continue to view 4imprint as a high-quality investment proposition.
Companies: 4imprint Group plc
FOUR's update today shows that the business continues to move forward notwithstanding the difficult general environment caused by Covid. The continuing recovery in order intake is encouraging, and combined with a rise in the size of orders, means that revenues have already reached two thirds of 2019 levels at the same point in the year. Apparel has recovered particularly strongly and is operating at close to 2019 levels, driving 100% utilisation of the Oshkosh distribution hub. Recovering volumes are not just being driven by existing clients, but also by new client acquisitions, as a stable band is being maintained around this ratio (27% in H1-20, 29% in FY-19). Cash, at $US40.1m, is up on the $US37.5m figure reported in early August, both reflecting progress made and providing a robust platform for further progress, while taking account of the challenges inherent in the Covid backdrop.
In Q3 20, the decrease in organic net revenue slowed sequentially (-7.6% vs -15.1% in Q2 20). The recovery was driven by all the entities within the Global integrated agencies (75% of net revenue) and the Public relations activities. WPP posted the best results in the US, the UK and Germany. On the cost side, the Group is expected to achieve the high range of cost savings.
Companies: WPP Plc
Centaur’s Q3 shows high business resilience in the context of a challenging market backdrop. Ex-MarketMakers (“MM”; closed Aug’20), revenue decline slowed in Q3 to -16% y/y (Q2: -24%) whilst net cash actually rose (Q3: £9.3m; Q2: £8.4m) supported by exceptional cash management. Across Centaur’s portfolio, events and recruitment advertising saw continued CV19 impact, yet premium content performed well and the e-learning business saw continued strong demand. The Group also anticipate The Lawyer to achieve an FY’20E renewal rate of 105%. The Group is reinstating FY’20E guidance, with sales of >£32m from continuing ops (ex MM), and an adj EBITDA margin of c.10% (FY’19: 9%). Given improved visibility over FY’20 we also reinstate forecasts to the year end, yet longer term forecasting for events/ advertising streams remains challenging given fluidity in the macro backdrop. 0.75x EV/FY’20E sales (ex MM) looks inconsistent with growing premium content and elearning sales which make-up >50% of forecast FY’20E revenues.
Companies: Centaur Media plc
Tremor has reported a strong set of FY19 results and announced a prudent $10m buyback. The results are in line with January’s trading update, and demonstrate strong growth in Digital Video and Connected TV (CTV) advertising. Tremor has also seen a solid start to FY20, but COVID-19 could markedly affect a number of its clients. The management and board highlight that it is too early to fully assess the impact of COVID-19 on Tremor’s FY20 outlook, and we consequently leave our FY20 estimates broadly unchanged at this point. In this report we also explain Tremor’s investment case in depth, and highlight that Tremor is excellently positioned to capitalise on the major growth in Video and CTV advertising, and can see further upside from M&A and the resolution of the Uber case.
Full year results were in line with the July trading update, a little ahead of our published estimates, with revenues up 12% and adjusted operating profit up 18%. Data Products (one-third of group revenue) performed particularly well, with underlying revenues up 21% and operating margin up 70bp to 35.0%. A strong balance sheet (net cash of £35.3m) supports stepped-up investment in both technology and in panel, underpinning the ambitious targets set out for the three remaining years of management’s five-year plan. The valuation remains at the high end of the range of peers.
Companies: YouGov plc
Pearson’s 9-month trading update highlighted that the rising digital activities were unable to offset the test centre and school closures linked to COVID-19. The group’s solid financial position remains a positive point to retain.
We are likely to raise our forecasts considering our below average expectations but expect to reiterate our cautious view on the stock.
Companies: Pearson PLC
Mirada plc* (MIRA.L, 65p/£5.8m)
Companies: Mirada PLC
The recovery of TV advertising was higher than expected in Q3 20 ((+8.2% vs -41.2% in Q2 20). TF1 benefited from an advertising catch-up in various sectors such as food, retail, personal care, e-commerce and automotive. The decrease in the cost of programmes (-21% on 9m 20) continued with no negative impact on audience share. There is no guidance for Q4 20 and 2021 due to low visibility related to unfolding of the COVID-19 pandemic in France.
Companies: Television Francaise 1 SA
We report on the performance of our momentum style screen since the last refresh three months ago and present the 25 new constituents. The screen underperformed small-cap and microcap indices modestly, though our previous focus stocks did significantly better. While momentum (as we express it) has outperformed smallcap significantly since inception of the screen in July 2016, this has arisen in shorter periods and appears to only coincide with a steadily rising small-cap index. We therefore consider this style screen to have limited predictive capability. We highlight seven stocks, which we think are interesting.
Companies: BMY CKT KEYS LGT MACF VER WYG