Mirada plc* (MIRA.L, 80p/£7.1m) | Tern plc* (TERN.L, 7.45p/£22.4m)
Companies: Mirada PLC (MIRA:LON)Tern Plc (TERN:LON)
Mirada, the leading provider of integrated software for digital TV operators and broadcasters, saw H1 revenue from core operations decrease 4.5% to $5.5m as COVID19 delayed some deployments and investment decisions. Reduced operating costs meant EBITDA more than doubled to $0.6m, however. The izzi Telecom roll out continues but this has been supplemented by the commercial launches at ATNi and Zapi (PMO). The launch of Mirada’s Android TV Operator Tier with custom launcher, integrated with premium content providers including Netflix and Disney+, represents an important step forward and the deployment at izzi an important reference. In order to address the threat of cord-cutting and the need to remain relevant, Pay TV operators need to transition into becoming super-aggregators, combining internal and third-party services into a seamless experience. Mirada has a proven product to capitalise on the opportunity. Forecasts reintroduced and we set a new fair value of 160p/share.
Companies: Mirada PLC
Mirada plc* (MIRA.L, 85p/£7.6m) | Two Shields Investments/BrandShield plc (TSI.L, 0.11p/£4.9m - pre-proposed placing, acquisition and share consolidation)
Companies: Mirada PLC (MIRA:LON)BrandShield Systems plc (BRSD:LON)
Mirada plc* (MIRA.L, 65p/£5.8m)
Mirada plc* (MIRA.L, 72.5p/£6.5m) | Osirium Technologies plc (OSI.L 19p/£3.7m) | Corero Network Security plc (CNS.L, 11.0p/£54.7m) | Tern plc* (TERN.L, 7.7p/£23.2m)
Companies: MIRA OSI CNS TERN
Blackbird plc* (BIRD.L, 17.5p/£58.8m) | MTI Wireless Edge Ltd* (MWE.L, 31.5p/£27.7m) | Mirada plc* (MIRA.L, 90.0p/£8.0m) | Brave Bison plc* (BBSN.L, 1.375p/£8.4m)
Companies: BIRD MWE MIRA BBSN
Mirada, the leading provider of end-to-end multiscreen, multiplatform software for Digital TV operators and broadcasters, saw progress on the financial, commercial and functional fronts in FY20. Reported revenue increased 7% to $13.2m. Stripping out the non-core Mirada Connect business (sold in July), revenue was +13% to $13.0m. Adj. EBITDA more than trebled to $2.5m plus a $1.7m gain on disposal. The roll out at izzi Telecom continues but this was supplemented with deployments with other customers in multiple geographies and Mirada won the PMO contract in Spain. During FY20 Mirada launched its Android TV custom launcher, integrated with premium content providers, including Netflix, and increased the range of supported devices. As a result, it can offer operators a broader and functionally richer offering as they try to capitalise on higher content consumption trends and ensure that their services meet subscriber expectations. Forecasts remain under review but we anticipate further growth.
Gfinity plc* (GFIN.L, 3.6p/£26.7m) | Starcom plc* (STAR.L, 0.95p/£3.3m) | Mirada plc* (MIRA.L, 90.0p/£8.0m)
Companies: GFIN STAR MIRA
Blackbird plc* (BIRD.L, 19.25p/£64.7m) | Mirada plc* (MIRA.L, 92.5p/£8.2m) | Tern plc* (TERN.L, 10.75p/£29.0m) | Checkit plc (CKT.L, 39.5p/£24.5m)
Companies: BIRD MIRA TERN CKT
CAP-XX Ltd* (CPX.L, 3.1p/£10.1m) | Gfinity plc* (GFIN.L, 1.675p/£12.0m) | MTI Wireless Edge Ltd* (MWE.L, 38.5p/£33.8m) | Newmark Security plc* (NWT.L, 1.05p/£4.9m) | Mirada plc* (MIRA.L, 95.0p/£8.5m)
Companies: CPX GFIN MWE NWT MIRA
Tern plc* (TERN.L, 10.0p/£27.0m) | Gfinity plc* (GFIN.L, 1.45p/£10.2m) | Mirada plc* (MIRA.L, 95p/£8.5m) | Brave Bison plc* (BBSN.L, 1.3p/£8.0m)
Companies: TERN GFIN MIRA BBSN
Gfinity plc* (GFIN.L, 1.65p/£11.6m) | Mirada plc* (MIRA.L, 95p/£8.5m) | Brave Bison plc* (BBSN.L, 1.25p/£7.7m) | MTI Wireless Edge Ltd* (MWE.L 38p/£33.4m) |
Companies: GFIN MIRA BBSN MWE
Today’s FY20 pre-close points to further revenue growth and a significant improvement in adj. EBITDA for the leading provider of integrated provider of integrated software for Digital TV operators and broadcasters, albeit slightly light of our forecasts as some work slipped into FY21. Revenue is expected to be >$13.0m (FY19: $12.3m, ACLe: $14.2m) and adj. EBITDA of $2.3m (FY19: $0.8m; ACLe: $2.6m). Revenue from izzi Telecom, Mirada’s largest customer, remained stable and it has now deployed on more than 2.8m set top boxes (STBs). izzi has also selected Mirada for its new generation service. Encouragingly, revenue beyond izzi continues to grow as Mirada works on projects in multiple territories and negotiations with potential customers are also ongoing. Mirada has successfully transitioned to remote working and is helping its clients cope with an exceptional increase in service demand. That said, it is impossible to predict the impact of COVID-19 and hence we are temporarily withdrawing FY21 forecasts.
Companies: SGI ANP RRR MLVN RQIH DXRX BRH EKF MIRA KP2
Mobile Tornado Group plc* (MBT.L, 2.95p/£11.2m) | Mirada plc* (MIRA.L, 72.5p/£6.5m)
Companies: Mobile Tornado Group Plc (MBT:LON)Mirada PLC (MIRA:LON)
Research Tree provides access to ongoing research coverage, media content and regulatory news on Mirada PLC. We currently have 65 research reports from 3 professional analysts.
Kape has issued a trading update for what was a very productive year for the Group and in which it exhibited a strong trading performance. Revenue for FY 2020E is expected to be at the top end of the expected range while Adjusted EBITDA is ahead of guidance. We increase our estimates by 1% and 8% respectively to be in line with the anticipated outturn for the year. It now has around 2.5m paying subscribers across its core markets of North America and Europe. Kape also completed the integration of Private Internet Access (PIA) ahead of schedule and launched new products, including its privacy suite. Kape expects to increase R&D spending further in FY 2021E to build on the successful additions to its product range and customer experience. With good momentum going into FY 2021E, the Group continues to demonstrate its ability to drive customer numbers and retention through the execution of a clear strategy for meeting the growing demand from consumers for digital privacy and security solutions.
Companies: Kape Technologies Plc
The MISSION’s trading update indicates the group had a comfortably better Q4 than expected, with the full-year PBT over £1m, against our forecast £0.5m. Cash performance was significantly ahead, with a year-end net debt position of £1.3m allowing the payment of the delayed final 1.53p dividend from FY19. We will update our FY20 numbers with the full results in April. We have trimmed our FY21 forecast revenue by 7.5% to reflect the ongoing impact of the pandemic in H121, reducing PBT from £9.0m to £7.1m. We also publish our first thoughts on FY22, on an improving trend. The shares remain priced at a significant discount to peers on earnings multiples.
Companies: Mission Group Plc
A strong exit for FOUR from Q4-20 is a key message we are drawing from its trading update this morning, with excellent momentum during the closing months of the year reflecting that the underlying model remains extremely healthy. The data points are weekly order intake lifting from a touch over 60% of the prior year in October to an average of 70% for the whole quarter and hence implicitly suggesting a c.75% level in the latter part of the quarter. Revenues at $US560m are 65% of the prior year – again, a positive number in the context of the pandemic and, taking account of two strong months at the start of FY2020E prior to the onset of the pandemic, also reflect the accelerating progress of the business in the second half. We note the strong recovery in Apparel which was apparent when the company last reported to the market, at which point this sector was operating at close to 2019 levels, with the distribution hub 100% utilised, and no doubt this will have contributed to the overall picture.
Companies: 4imprint Group plc
4imprint’s trading update indicates that order intake in Q4 was a little better than we had anticipated. Unaudited FY20 revenue was reported at c $560m, or 5% above our prior forecast. We remain circumspect around trading prospects for FY21, given the impact of the pandemic on corporate America and leave our forecast unchanged for now. The indicated year-end net cash balance at $39.8m (excluding lease debt) was well ahead of our projected figure ($22.5m in our modelling), and close to the $40.1m reported in October, implying that cash collections have held up strongly. We continue to view 4imprint as a high-quality investment proposition.
Tremor has announced that December trading materially exceeded its prior estimates, as its platform’s momentum has continued to accelerate since its last update on 30 November. Tremor now expects FY20 revenue and EBITDA to be in the range of $404-408m for revenue (from $390-400m), and $58-60m for EBITDA (from $50-52m). This leads us to upgrade our FY20 and FY21 revenue forecasts by +2-3% to $406m and $479m, and upgrade our FY20 and FY21 EBITDA by +16% and +10% to $59m and $68m. As Tremor’s platform benefits from strong operational gearing, this drives upgrades to EPS of +28% in FY20 and +16% in FY21. Our net cash then increases by $11m in FY20 to $96m, and despite including $10m of buyback in FY21, our FY21 net cash increases by $12m to $117m as we partially unwind conservative working capital assumptions. This is the fourth upgrade to our Tremor forecasts since COVID-19 impacted the advertising market and Tremor in Q2 20, and Tremor subsequently adopted a prudent approach to its FY20 guidance. We continue to mirror this conservatism in our FY21 EBITDA of $68m, which compares with H2 20 EBITDA of $57m, and our FY21 EBITDA includes additional investment as Tremor looks to gain share within a market growing at over 20% pa. From p9 we also highlight that Tremor is demonstrating the same trends as its US ad tech peers Magnite, PubMatic, and The Trade Desk, with each forecasted to see +15-35% organic revenue growth and +10-60% organic EBITDA growth in FY21, as they focus on expanding in connected TV. However, Tremor is trading at a major discount to its US peers on all metrics, such as FY21 EV/EBITDA of 9x vs 41x, 29x and 104x, and at a discount to the finnCap Tech 40 on 17x with +9% EBITDA growth. As Tremor continues to deliver and exceed expectations, we do not expect that its current valuation will be sustainable due to market or external interest, and we upgrade our target price to 800p based on 20x FY21 EBITDA.
Companies: Tremor International Ltd.
With an improving outlook for advertising spend, The MISSION should see a good bounce in revenues in FY21. Initiatives such as MISSION Made, launched in October, should help drive efficiency, with increasing use of shared central resources and a careful eye on costs also set to lead a rebound in margin. The financial outcome will partially be determined by revenue mix, with the group exposed to high-performing segments, such as tech and pharma, as well as areas with greater COVID-19 related issues, such as property and events. There are no changes to our forecasts at this stage. The group’s valuation remains well below that of peers.
Kape has announced the launch of its CyberGhost Privacy Suite solution, for Windows initially, which it had trailed in its July Capital Markets Day. The suite provides online users with a comprehensive protection solution which combines Kape’s market leading privacy and software products, providing a strong data privacy and system security offering to consumers on a global basis. The Group is also launching a password manager and an end-to-end encryption service for cloud-data. These launches represent the fruits of the collaboration between Kape’s complementary acquired businesses. In particular, we expect the undertaking to further improve user engagement and retention, driving revenue and profit into the long term.
Further media reports that Dr Martens, the British Boot brand is planning an IPO on the LSE. It is currently owned by PE group, Permira who is expected to sell down its stake at the IPO. March 2020 YE the group had revenues of £672m and EBITDA of £184m. Deal size TBC. Upon Admission to AIM, Nightcap will acquire The London Cocktail Club Limited (the "London Cocktail Club"), which is an award winning independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol. Offer TBC Due mid Jan. HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market. Due 14 Jan. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: IUG CBP KAT APP RST DIS NICL BOKU CNIC HE1
4imprint’s year-end update highlights a continued recovery in weekly order intake from 60% of 2019 in October to 70% in Q4 overall. FY 2020 sales are expected to be c.$560m, down -35% on 2019, and adj. PBT in line with the Board’s expectations. FY 2020 sales are, hence, 4% ahead of our previous forecast. We assume short-term marketing costs have also increased as the opportunity is taken to win market share, but upgrade FY 2020 adj. PBT from $0.8m to $2.8m. We leave our FY 2021 and onwards forecasts unchanged subject to further evidence on the shape and pace of a recovery. Net cash of c.$40m at December 2020 is ahead of our forecast $29m, suggesting a very strong working capital performance. We reiterate our view that the timing and pace of a recovery is very hard to predict, but we believe history will repeat, and that 4imprint will accelerate market share gains and profits can return to pre-COVID levels in 2023.
Reach plc today provides a strong Q4 trading update highlighting upgraded FY’20E AOP expectations of £130m-£135m ahead of consensus (cons: £124.3m) and record growth in Digital. Digital sales growth has recovered strongly since Q2, accelerating to 25% y/y (Q3: +13%; H1: -1%) benefitting from both higher traffic through implementation of Group engagement initiatives and yield recovery as advertisers in CV19 impacted verticals return. Print circulation revenue decline moderated to 11.7% y/y in Q4 (Q3: -12.6%), a significant deceleration from the -18.2% y/y in H2 and modestly better than our H2 forecasts. Continued focus on audience engagement, the quality of audience data and insights, and further extension of locally focused digital content we see driving further gains online, with Digital sales still on track to double on a four year view. We are upgrading forecasts, increasing FY’20E sales, AOP and adj FCF by 2%, 6% and 5% respectively, with upgrades filtering into future periods. A 17% FY’21E FCF yield sits well in advance of global peers (3%-7%), with a 10% FCF yield generating an intrinsic valuation of 315p/share.
Companies: Reach plc
CentralNic has made a small acquisition of SafeBrands, an online brand protection software provider and corporate ISP based in Paris, for a cash consideration of up to €3.6m (0.9x FY19 revenue). €3m is payable upfront and €0.6m will be paid subject to meeting FY20 performance objectives. SafeBrands operated at close to break-even in FY19. Separately, CentralNic has also reorganised its Corporate division, rebranding it as the Enterprise division. Based on our estimates, the company trades on an FY21e P/E multiple of 15.8x and 9.8x FY21e EV/adjusted EBITDA. We expect earnings-accretive M&A to bring multiples down further as CentralNic consolidates a globally fragmented market of sub-scale, cash-generative businesses.
Companies: CentralNic Group Plc
Future today released an update highlighting FY’20E adj EBITDA which is trading towards the top-end of consensus (£86.3m-£91.0m; N1Se: £88.5m). Strong performance has been supported by acceleration of the consumer shift to digital, positive cost control and cost synergy extraction from the TI Media acquisition (c.£9m annualised savings delivered so far). Migration of TI Media sites to the Group’s Vanilla platform are underway, whilst Hawk (price comparison platform) has been successfully deployed on three key existing TI Media websites. TI Media represents a significant opportunity to drive strong EBITDA growth in the medium-term as the portfolio transitions to digital, whilst the Group also has a number of additional levers to drive outperformance against conservative consensus forecasts. We leave forecasts unchanged for now, although upside risk is building. Future offers a 7% FY’21E FCF yield on N1Se forecasts, peers offer closer to 4%.
Companies: Future plc
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
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.
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.
