Tern plc* (TERN.L, 8.0p/£24.1m) | Corero Network Security (CNS.L, 8.25p/£40.8m) | Eagle Eye Solutions Group plc (EYE.L, 288p/£86.9m)
Companies: TERN CNS EYE
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: ITX SPE EYE CNC ANX ONC NFC BOD FEN ECSC
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: EYE OBD BOOM MTW AXM BKS IMMO W7L
Microsoft unveiled the new Surface Duo, which runs on Android, at its annual hardware event on Wednesday. The folding phone features two side-by-side 5.6-inch displays that are connected by a 360-degree hinge. Microsoft said it partnered with Google to “bring the best of Android” to the device, while incorporating elements of Windows 10X, a new operating system meant for hybrid devices. It can also run two different apps at the same time. Specifically, the Surface Neo will rely on a new "Expression" of its Windows 10 operating system called Windows 10X.
Companies: KAPE EYE IMO
Facebook on Monday announced the acquisition of CTRL-labs, a New York start-up that specializes in allowing humans to control computers using their brains. The start-up will join Facebook Reality Labs, a division of the social media company that is working to develop augmented-reality smart glasses. The vision for CTLR-labs' technology is that it will use a wristband that allows people to control their devices. A very interesting move for a company that’s battling to keep real estate on consumers’ mobiles let alone in their brains.
Companies: MVR MVR DOTD EYE IMO IMMO KBT VRE
TVs have joined the ranks of websites, apps and credit cards in the lucrative business of harvesting and sharing user information. Whilst TV records may not contain sensitive search queries or financial data, they are able to store data on user interests, personality, joys and embarrassments, as tens of millions of users have given TV brands permission unknowingly. Many TV makers say tracking what users watch helps provide personalized recommendations. However, there is much belief that TV tracking is mostly about filling in a missing chunk of data which is only useful for advertisers and media companies.
Companies: 7DIG KAPE ZOO AMO EYE MIRA
Wirecard has signed a memorandum of understanding with SoftBank's Brightstar and anticipates "Significant transaction volume" out of the deal, the German fintech announced on Monday. Under the agreement, digital financial services via a Brightstar platform are expected to be handled by Wirecard as the preferred payment service provider, Wirecard said. In our view, Wirecard’s MoU with Brightstar demonstrates SoftBank’s plan to promote interaction between its expansive portfolio network is beginning in earnest. We believe the resources of the combined US$100bn worth of investments is formidable, and if SoftBank can drive cooperation, there is scope of substantial value creation – which may help to justify some of the stand-out premiums implied at its investment rounds. ZAO, a new Chinese app that lets users swap their faces with celebrities, sports stars or anyone else in a video clip - racked up millions of downloads on the weekend but swiftly drew fire over privacy issues. The app's surge in popularity and sudden backlash from some users highlights how artificial intelligence technologies bring about new concerns surrounding identity verification. Digital privacy, data protection - and now images and biometric data – is being captured and commercialised at a pace that legislation in most economies is struggling to keep pace with in our view. We believe data, analytics and privacy will become a key theme of decade as consumers, governments and MNCs become increasingly aware of assets that were not considered valuable or sensitive just a few years ago. This is a structural theme we will be watching very closely as a potential edge (or liability) to business models on a medium-term horizon.
Companies: KAPE BGO BOKU EYE EQLS IMO TECH WDI
Walt Disney announced on Tuesday that it would offer a $13-per-month bundle of its three streaming services starting in November, a move to attract audiences who have embraced digital services such as Netflix. Disney's bundle includes family-friendly digital offering Disney+, sports service ESPN+, and Hulu, which will cater to adults, for a $5-per-month discount. Speculation in reputable trade publication The Information, mirrored in Reuters and 9to5Mac indicated the next iteration of Apple’s mobile operating system, iOS13, will move to limit apps’ access to data while running in the background. The press notes that this will have repercussions to Messenger and WhatsApp, both owned by Facebook Inc, given both depend on the specific features of iOS that allow internet calls – which may force them to redesign their apps. Snap on Tuesday said it will raise $1 billion in short-term debt and plans to invest in more media content, augmented reality features and may also buy other companies. The parent company of the popular disappearing messaging app Snapchat has revived its user growth and stock price after a rough 2018.
Companies: KAPE ZOO AMO EYE MVR IMO VRE MIRA
Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m. Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year. Freyherr International Group PLC the Medicinal Cannabis holding company established in 2016, is planning to list on the NEX exchange on the 30th July
Companies: SIM EYE FOX SDI KETL AEO YNGA SGZ OCI KDR
Spotify stock dropped over 1% on a Bloomberg report that Apple plans to fund its own original podcasts. Apple executives have reached out to media companies to buy exclusive rights to podcasts, according to the report. Amazon has a promotion for US shoppers on Prime Day, the 48-hour marketing blitz that started Monday: Earn $10 of credit if you let Amazon track the websites you visit. The catch, as Amazon explains in the fine print, is the company can use this data to improve its general marketing, products and services, unrelated to the shopping assistant. Curve, the London-based “over-the-top banking platform,” has raised $55 million in new funding. The start-up lets you consolidate all your bank cards into a single Curve card and app to make it easier to manage your spending and access other benefits. The new round of funding values Curve at $250 million and will be used by the company to continue adding more features to its platform and for further European expansion.
Companies: BGO BOKU EQLS TECH BOOM D4T4 EYE
Essensys plc—a provider of mission-critical SaaS platforms and on-demand cloud services to the high growth flexible workspace industry, plans to join AIM. Offer TBC, expected 29 May 2019. Induction Healthcare Group plc—a healthcare technology company focused on streamlining the delivery of care by Healthcare Professionals looking to join AIM. Expected raise of £14.58m at 115p, market cap of £34.07m. Expected 22 May 2019. SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019
Companies: CPT BKS RUA MBH TEK EYE IDEA HDD PYC
Research Tree provides access to ongoing research coverage, media content and regulatory news on Eagle Eye Solutions Group PLC.
We currently have 70 research reports from 6
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.
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.
We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.
Companies: BCA CLIN CLG CBP DNLM EAH STU FCRM FUTR GTLY INS GLE NICL SDL SPR TRI
FY2018 results reflect a satisfactory performance, given continued softness in the book trade. Revenues fell by 2% to $149.3m but adjusted operating profit increased 43% to $10.3m. Children’s publishing increased by 2%, representing over one-third of group revenues. The group has extended its banking facilities to August 2020. Net debt fell by 6% to $60.4m. In 2018 the group implemented a cost-out programme to right-size the group. We shall look to reintroduce estimates in due course. We have the shares under review ahead of this.
Companies: Quarto Group, Inc.
The two leading adtech businesses on the AIM market – Taptica and RhythmOne – have come together, combining their programmatic advertising platforms to create a major player in the global video advertising market. Following completion of the deal, we now release preliminary forecasts for the combined entity. Taptica’s management has only just received access to a very complex and disparate organisation in RhythmOne, and there will doubtless be an evolution of expectations as understanding and integration proceeds. RhythmOne trading for the YE March 2019 was below expectation, but under Taptica’s management the combination nevertheless represents an excellent opportunity going forward.
Vela Technologies is an investing company focused on early stage and preIPO long-term disruptive technology investments. There are currently 12 investments in the portfolio which either have developed ways of utilising technology or developing technology with a view to disrupting the businesses or sector in which they operate.
Companies: Vela Technologies plc
De La Rue remains challenged. New management has to navigate a difficult Currency market and consequent concern over its finances. The swift response in terms of a turnaround programme is a positive start, accelerating cost cutting initiatives and cash management measures, including suspension of the dividend. Restoring stability and rebuilding confidence in the investment case is likely to take some time.
Companies: DLAR DELRF DL1C
Disney+ hits 22m mobile users, SoftBank backed firm downsizes IPO, German mobile carrier selects Huawei
Companies: ENET 7DIG MVR ZOO ZOO AMO BOOM MIRA MWE
Tremor has announced that it is acquiring Unruly from News Corp through the issuance of 8.5m new Tremor ordinary shares to News Corp (6.9% of Tremor’s prior shares or £14.5m), and Tremor has entered into a global partnership with News Corp for 3 years of exclusive access to outstream digital video adverts for over 50 News Corp publications, with Tremor committing to £30m of ad spend over 3 years. This indicates News Corp has considerable confidence in Tremor, and as News Corp now has a substantial interest in the Tremor investment case, it is anticipated that Rebekah Brooks (CEO of News UK) will join Tremor’s board. Tremor has also issued a short trading update, with FY19 EBITDA in line with market expectations (H2 c$39m), net cash in line except for a $5m advance, and FY19 revenue lower than expected due to Tremor focusing on its profitable, core activities and removing intercompany revenue. We consequently adjust our forecasts with a breakdown on p6. Tremor subsequently trades at a substantial discount to its peers on 12m fwd multiples of 2.4x EV/EBITDA and 5x adj P/E, and we look forward to Tremor issuing a more detailed trading update in late January.
Future’s audience growth metrics have proved stronger than expected in the first 4-months of FY’20E. Management now forecast financial performance to be ‘materially’ ahead of current FY’20E market expectations. We upgrade our FY’20E sales by 4%, and with outperformance indicated to be in higher margin profile eCommerce and digital display advertising areas, we upgrade FY’20E EBITDA by 8%. Given current macro uncertainty we leave FY’21E and FY’22E forecasts broadly unchanged although we flag heightened upside risk to forecasts. Pro forma FY’20E EBITDA is estimated at c.£103m implying an EV/EBITDA multiple of c.13x, whilst FY’21E OpFCF yield is forecast to reach 6.1% based on our undemanding forecasts.
Companies: Future plc
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
We have knitted together the impact on the investment companies from what is now widely considered to be the most severe pandemic in a century. The collapse in asset prices over the latter part of March, brought the curtain down on an up-market that lasted more than ten years. In amongst this, there were pockets, such as the technology sector, that held up well. For many industries, the worst is still to come, as we brace ourselves for the sharpest contraction to global growth since the US great depression.
Companies: ASL SDV ASIT BGEU BRLA CCPE DPA IEM JMF JZCP JUKG EPIC PSHD CSH RIII CCPG BLP TMPL BPCR SEQI AIF SMT KKVX FAIR ICON RSE CRS GWI USF DIGS
Centaur has provided an update offering further insight into trading post-lockdown. Encouraging performance has been noted across digitally focused segments, with MiniMBA (e-learning) seeing strong demand and contract wins in Econsultancy and XEIM labs supporting clients with digital transformation projects. The Lawyer subscription renewal rate, supported by premium content, also remains healthy. As previously flagged however, Telesales has seen a sharp drop in sales as a function of disruption to customer businesses; c50% of MarketMaker staff have been furloughed to minimise impact to profits. H2 events are also at risk, although the Group is considering online formats early in order to reduce irrecoverable costs and maximise delegate and sponsorship revenues. Focus on near-term cash preservation has led to the prudent decision not to pay the final FY’19 dividend, saving £0.7m of cash. The Group held cash of £6.7m at April 3rd, with potential access to undrawn banking facilities of £25m subject to positive discussions currently being held to amend covenants should short-term liquidity be required. The range of outcomes remains wide, and we have no forecasts published at this time, however at 0.6x EV/ FY’19 sales the Group looks to be priced as a distressed asset. Given balance sheet strength, a building recurring revenue model and improving high-margin revenue mix, this valuation looks incongruous with fundamentals in all but the most extreme downside scenarios.
Companies: Centaur Media plc
Tremor’s AGM statement shows that Tremor was delivering on its strategy and on course to achieve FY20 revenue of $425m in Q1. However, the impacts of COVID-19 on the advertising industry led to a challenging Q2 20, with Tremor’s revenue falling with the market to be c40% below Tremor’s FY20 plan. In response, management have moved quickly to reduce FY20 opex by over $23m vs budget, and positioned Tremor’s platform to respond to a rebound in demand. There are encouraging signs for H2 20, but visibility continues to be low and Tremor is not giving guidance for FY20. We consequently introduce revenue and EBITDA ranges for FY20 and FY21, and place our estimates at the mid-point for FY20. To then highlight that Tremor’s platform can rapidly rebound, we move our previous FY20 forecasts to FY21. This reflects that we believe that Tremor’s investment case remains compelling, and even on our lower case FY21 EBITDA of $35m, Tremor is trading on 5x EV/EBITDA vs ad tech and AIM peers on >10x.
CentralNic’s capital markets day (CMD) on 24 June 2020 introduced the divisional management team and provided insight on each of the three key segments as they will report in FY20: Indirect (Wholesale, Registry); Monetisation (Team Internet); and Direct (Retail, Corporate). We have picked out what we believe are the four key themes from the CMD: FY20 performance, COVID-19 and seasonality; organic growth; M&A; and, pulling it all together, the benefit of scale. CentralNic continues to trade on an FY20 EV/EBITDA of 9.1x and a P/E of 15.8x, a material discount to its peer group, with our DCF indicating further share price upside. M&A could bring CentralNic’s multiples down further.
Companies: CentralNic Group Plc