Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Mediazest. We currently have 35 research reports from 2 professional analysts.
Kaspi.kz, the largest Paym ents, Marketplace and Fintech Ecosystem in Kazakhstan w ith a leading m arket share in each of its key products and services. GDR offering expected Oct 2019. In the first half of 2019, the Company generated total revenue of KZT226,862m (U.S. $598m), up 34% and net income of KZT77,001m (U.S. $203m), up 54%. Registration document approved for Helios Towers. The Group provides essential network services, flexible infrastructure solutions and reliable power supply to mobile network operators in five African growth economies. Revenue increased 7 per cent. year-on-year to US$191m (H1 2018: US$178m), with Adjusted EBITDA up 15 per cent. year-on-year at US$99m (H1 2018: US$86m) for the six months ended 30 June 2019.
Companies: SAR MDZ ECR SYM TAVI DGOC ITX SNG SNT FOX
The creative audio-visual Company recently reported FY March 2019 results posting a 17% revenue increase to £3.3m and Group EBITDA of £129k (vs a £113k loss) and PBT of £6k vs a loss of £113k. This was against our recently trimmed expectations of £3.15m revenue, EBITDA of £40k and a PBT loss of £50k. Nonetheless H2 trading was more difficult than Mediazest’s strong first half, due, in part, to the deterioration in macroeconomic trading conditions that has been evident since November 2018 and then latterly, an overall slowdown in the sector as a whole. It should be noted that the results include the beneficial profit impact of £117k resulting from the adoption of IFRS15. The impact of this is additional revenue of £317,000 and costs of £200,000 which are consequentially recognised in profit or loss for the year ended 31 March 2019.
The creative audio-visual company recently updated on current trading as the March 2019 year end approaches. The excellent momentum seen in the first half of the year with 36% revenue growth and a small net profit has not repeated in the second half. Delayed projects and investment decisions, particularly by clients in the retail sector has resulted in the Company expecting trading results in H2 to be lower than the first half of the year. As a result, MediaZest is now expecting to be profitable at Group level EBITDA and to make a small loss after tax.
United Oil & Gas (UOG.L) an oil and gas exploration and development company brought to the Official List (Standard Segment) in July 2017 by way of a reverse takeover of Senterra Energy plc. No capital to be raised, expected market cap of £17m and expected 1 March Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m. Polemos, to be renamed Digitalbox plc, has agreed to acquire Digitalbox Publishing Holdings Limited for c.£10m through a share for share exchange. The acquisition constitutes a RTO. Polemos has also agreed to acquire the entire issued share capital of Mashed Productions Limited, a digital media business which owns the online satirical news website "The Daily Mash", for a maximum total consideration of up to £1.2m. Market cap on admission £12.4m, expected 28 February
Companies: AAU IHC MDZ GMR R4E APC WEB HAYD 88E BPC
Given the current sentiment towards UK consumer stocks one might expect that those servicing this sector, such as MediaZest the creative awardwinning, audio visual solutions provider, might be suffering too. Not so according to the recently released HYSep18 results which saw a 36% increase in revenues to £1.82m and a swing from an EBITDA loss of £87k to profit of £156k. MediaZest may be small but its expertise in creating consumer experiences through the use of audio-visual technology has earnt it some impressive customers and opened up some major opportunities in industries where it is carving out a niche in deploying digital signage.
Wentworth Resources— oil and gas exploration and production company, with assets in the onshore Rovuma Basin of East Africa. Introduction only. Mkt Cap c £50m . Due today Renalytix AI—developer of artificial intelligence ("AI") decision support and clinical management tools for improving early diagnosis, continual monitoring and drug development for kidney disease. incorporated in March 2018 as a subsidiary of EKF Diagnostics Holdings (AIM-EKF). Total fundraising £22.25m.. Mkt cap - c. £67.5- £71.0m. Due 6 Nov. Finncap—proposed acquisition of M&A adviser Cavendish Corporate Finance and AIM admission. Offer TBA Kropz PLC—an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa, a phosphate project in the Republic of Congo and exploration assets in Ghana. Looking to join AIM, offer TBC, market cap TBC. Due Late October. Path Investments— First acquisition of a 50%. participating interest in the producing Alfeld-Elze II gas field in Germany. Seeking £10m raise. Transaction aborted. Was RTO. PATH to seek lifting of suspension. Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over the next few months.
Companies: MDZ SXX XSG TRIN MYSQ ANGS DSG LPA CPX RBD
Green Man Gaming—pure play e-commerce and technology company in the digital video games industry. revenue CAGR growth of 26.7% in the last three years to £47.5m. Due 28 Sep. EBITDA Profitable. Offer TBA Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over the next few months. Path Investments (PATH) -RTO of a 50 per cent. participating interest in the producing Alfeld-Elze II gas field located 22 kilometres south of Hannover in Germany. Seeking £10m. Offer TBA. Due Mid September Kropz PLC-Intention to float by the emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa Breakfast Buffet
Companies: MDZ VRE FST ING TUNE CYAN JDG EML SSY RM2
Path Investments (PATH) -RTO of a 50 per cent. participating interest in the producing Alfeld-Elze II gas field located 22 kilometres south of Hannover in Germany. Offer TBA. Due late Aug. Kropz PLC-Intention to float by the emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa
Companies: MDZ GHS MCON 7DIG VOG THAL IOG IRV SDX SWG
Block Energy— UK based oil exploration and production company whose main country of operation is the Republic of Georgia. Raising £4m. Mkt cap £9.3m. Due early June. Codemasters Group— video game developer and publisher, specialising in high quality racing games. Offer TBA. Seeking £15m in primary. Due 1 June. Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June. Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Offer TBC, expected late May. Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May
Companies: SAE PYC AURA NSH FST SCLP MDZ EME
Pelatro— The precision marketing software specialist. Due 19 Dec. Raising £3.8m new money plus £0.6m vendor sale. 62.5p. Mkt cap £15.2m. HYJun17 revenues increased to US$1.55m from US$0.2m and profit before tax increased to £1.0m from a small loss in the comparable period. Fusion Antibodies— Sch1 from the Belfast based contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications. Offer to raise £5.5m for the Company and £1.075m for selling shareholders at 82p with market cap of £18.1m. Due 18 Dec Erris Resources PLC—a mineral exploration and development company currently focused on two geographic areas. Offer TBC, expected 21 December 2017 CIP Merchant Capital—Closed ended investment Company. Sector focus oil & gas, healthcare, pharma, and real estate. Offer TBA. Due 21 Dec Panthera Resources— The Company was established to act as a holding company for Indo Gold Limited, an unlisted Australian registered company. The Company aims to explore and develop gold assets in India and West Africa. Offer TBC, expected 20 Dec Sumo Group—one of the UK's largest independent developers of AAA-rated video games providing both turnkey and codevelopment solutions, including initial concept and pre-production. Offer TBC. Due late Dec Pelatro—provider of proprietary software solutions to enterprise-level customers for various aspects of precision marketing for use in B2C applications. Offer TBC, expected 19 December 2017 Fusion Antibodies—contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications. Raising £5.5m at 82p plus £1.075mn vendor sale. £mkt cap £18.1m Due 18 Dec. Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m. Due 19 Dec. Bushveld Minerals—RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine. Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity. Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec. Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native invideo advertising. 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 19 Dec. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
Companies: MDZ IOG HUM AMPH MPM CVR COIN CWR
appScatter Group—Sch1 from the B2BSaaS platform that allows its paying users to distribute their apps to, and manage their apps on, multiple app stores. Following admission, appScatter intends to launch the public version of the platform, at which point the platform will be available to all app developers and publishers worldwide. Raising £9m at 65p. Mkt Cap £41.1m. Due 5 Sep. | Warehouse REIT - The Company will invest in a diversified portfolio of UK warehouse assets located in urban areas. The Company is targeting a dividend yield of 5.5p equivalent to a yield of 5.5 percent. for the year ending 31 March 2019. Issue price 100p. Raising up to £150m. | Destiny Pharma—A clinical stage biotechnology company - lead asset (XF-73) targets antibiotic-resistant bacterial infections in hospitals. Offer TBA. Due early September. | Avingtrans (AVG.L) Sch1 on its Reverse Takeover of Hayward Tyler (HAYT). Combined market cap of c.£75m. Expected 01 September 2017 | OnTheMarket—Intention to float on AIM to raise c. £50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.| Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Offer raising £200m at 100p. The Company has decided to extend the closing date for the Placing, Offer for Subscription and Intermediaries Offer to 1 August 2017. The Company may bring forward this closing date at any time. Admission 15 September 2017 |
Companies: MDZ WEY SRT VCP ESL AMC BLV BIRD EME
Xpediator Plc—Sch 1 from the holding Company for an integrated freight management business operating in the supply chain logistics and fulfilment sector across the UK and Europe with a strong presence in Central and Eastern Europe. Offer details TBC, expected Admission early August 2017. | GetBusy PLC—Sch1 from the holding Company of its subsidiary undertakings, which operates as a document management software business with over 110 full time employees, headquartered in Cambridge, UK and operating across the UK, USA, Australia and New Zealand. Capital to be raised via a rights issues of £3m at 28.3p with anticipated market cap of £13.7m. | Work Group PLC—Sch1 from the Company that proposes to acquire the entire issued share capital of Gordon Dadds Group Limited (GDG). GDG is an acquisitive law firm and a group of other complimentary businesses, including Prolegal, an acquisition vehicle model focused on smaller law firm. Capital to be raised is £20m with anticipated market cap of £40m. | Quiz—Sch 1 from the omni-channel and international own brand in the women's value fast fashion sector. Offer raising £102.7m at 161p expected market cap £200m. Expected late July. Last year Quiz posted sales of £87.4m while pre-tax profits grew by 17pc to £5.7m. | Arena Events Group -provider of temporary physical structures, seating, ice rinks, furniture and interiors. Raising £60m. Mkt cap £63m. Expected on the Chef’s birthday, 25th July. | Altus Strategies—African focused natural resource Company. Offer TBC. Expected Early August. | Harvey Nash Group— Provider of professional recruitment and offshore solutions moving to AIM from Main. No capital to be raised. Mkt Cap c. £57.8m. | Greencoat Renewables - Schedule 1. Targeting a portfolio of operating renewable electricity generation assets, initially investing in wind generation assets in Ireland. Offer raising €270m at €1 with expected market cap of €270m . Due 25 July 2017. | I3 Energy –Schedule 1 Update. Independent oil and gas Company with assets and operations in the UK. Issue price of 55p with anticipated market cap of £14.3m, 25 July Admission. | Verditek— Sch 1 update. The Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June. There has been no official update here for a while. | Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Prospectus yet to be published. | Impact Investment Trust—Exposure to a diversified portfolio of funds providing SMEs across developing economies with the growth capital they need to have a positive impact on the lives of the world's poorer populations. Raising up to $150m at $1.00. | Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. | Kuwait Energy— has not been able to complete its initial public offering as announced in its Intention To Float of 3 May 2017. However, in light of positive feedback from potential investors, the Company remains committed to obtaining a London listing and continues to explore its options. | Supermarket Income REIT– Up to £200m raise to acquire a diversified portfolio of supermarket real estate assets in the UK, providing long-term RPI-linked income. Due 21 July.
Companies: ORPH ALSP SIS MDZ EGS DALR PTR SOLO CMCL HALO
Opera Investments –Reverse Takeover of Kibo Mining’s subsidiary Kibo Gold. Raising £1.5m. Expected mkt Cap £6.5m. 23 May. Eve Sleep— Schedule 1 from the e-commerce focused, direct to consumer European sleep brand. Offer details TBC. Expected Mid May Velocity Composites—Schedule 1. Manufactures advanced carbon fibre and ancillary material kits (predominantly carbon fibre) for use in the production of aircraft. Mid May admission expected. Offer details TBC. Shearwater Group—Schedule 1. Acquiring SecureEnvoy for £20m in cash and shares—a provider of multifactor authentication enterprise software solutions. RTO under the AIM rules. Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission in May. Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe ADES International— Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa, seeking raise up to $170m plus vendor sale under a Standard Listing of the Main Market. Admission due May 2017. Global Ports Holding—Intention to float on Standard List of the Main Market. International cruise ports operator. Seeking $200m+ raise including $75m primary offer. Expected price range 735p to 875p. Mkt cap up to £539m. Tufton Oceanic Assets– Offer extended to 9 May on specialist funds segment of Main Market to enable investors to complete further due diligence.
Companies: COPL CML MDZ EHG HUR FARN MATD IGP HYR
Venn Life Sciences*( VENN . L) | MediaZest* (MDZ.L) | Legendary Investments (LEG.L) | AFH Financial (AFH.L) | Intercede Group (IGP.L) | Gear4Music Holdings (G4M.L) | Trakm8 Holdings (TRAK.L) | Kodal Minerals (KOD.L) | Applied Graphene Materials (AGM.L) | Velocys (VLS.L)
Companies: ORPH MDZ LEG AFHP IGP G4M TRAK KOD AGM VLS
Ultimate Products—The Telegraph reports Jim McCarthy, former chief of Poundland has been appointed Chairman of Ultimate Products ahead of a £100m listing in H1 2017. Ultimate Products owns the Beldray cleaning brand and the licence to sell Russell Hobbs and Salter electrical products in the UK. RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m
Companies: MDZ BOS IKA BOO HUNT TPG PHC VCP BOOM
Research Tree provides access to ongoing research coverage, media content and regulatory news on Mediazest. We currently have 35 research reports from 2 professional analysts.
|13Nov19 11:20||PRN||Result of General Meeting|
|28Oct19 14:00||PRN||Posting of Circular and Notice of General Meeting|
|27Sep19 15:51||PRN||Result of AGM|
|27Sep19 07:00||PRN||Trading Update|
|04Sep19 09:19||PRN||Posting of Annual Report and Notice of AGM|
|28Aug19 13:00||PRN||Final Results|
|20Aug19 10:50||PRN||Holding(s) in Company|
The Character Group plc* (CCT.L, 360p/£80.2m) | Blackbird plc* (BIRD.L, 15p/£42.8m) |Gfinity plc* (GFIN.L, 3.90p/£18.5m)
Companies: CCT BIRD GFIN
Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.
Companies: ABBY AMS ANX ARS ATYM AVON BLVN PIER BUR CGS CAML CDM CSRT TIDE CYAN DTG DEMG ELM EMR FPO FDEV GTLY GENL GHH GRI GEEC GKP HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KAPE KEYS KWS KCT KGH LAM LIT LOK MACF MANO MOD OXIG PCA PANR APP ESRE PHC PMO RBW RMM RBGP REDD RSW RNO ROR SUS SCPA SEN SHG SOLG SOM SUMO TM17 INCE TWD TRAK TRI VNET VTC ZOO ZTF
Our Hot Off The Wires daily newsletter takes a look at the morning's market movements, news stories and company announcements. Don't forget to have a go at our daily trivia! Companies mentioned in this edition include: Ashtead, Travis Perkins, Watches of Switzerland, JD Wetherspoon, S&U, McColl's Retail, Hipgnosis Songs Fund, Ted Baker, Premier Foods and OnTheMarket. If you would like to be subscribed, please email us at email@example.com.
Companies: OTMP SUS TPK
2019 has been a pivotal year with the opening of five Time Out Markets across North America. It is early days but initial performance provides proof that the concept can travel internationally. The delays to openings in Chicago and Montreal will lead to a small H2 loss, confirmed in the announcement today. We have updated FY19E forecasts to reflect this and some changes to future years largely to reflect phasing and additional investment given the growing opportunities for events and sponsorships at current sites and the large pipeline of future global locations.
Companies: Time Out Group
Disney+ hits 22m mobile users, SoftBank backed firm downsizes IPO, German mobile carrier selects Huawei
Companies: ENET 7DIG EVRH ZOO ZOO AMO BOOM MIRA MWE
OnTheMarket has announced that “as at 2 December 2019, over 3,000 more offices had been signed under new paying contracts to list all their residential properties at OnTheMarket . The progress builds on the support from thousands of firms already on long-term paying contracts at the time of admission to AIM in February 2018.”
In a deal which will have a profound effect on the prospects for the group, Kape has announced the proposed acquisition of LTMI Holdings, the holding company for virtual private network provider Private Internet Access (PIA). PIA is a Denver-based security software business, the addition of which will transform the size of Kape by doubling group revenues (including a stronger recurring revenue base) and increasing adjusted EBITDA by around 2.5 times in FY 2020E. Reflecting that, our earnings estimates increase by around 90% for FY 2020E while our new FY 2021E estimates build strongly on that much larger base. Total consideration is c. US$95.5 million with an enterprise value of c. US$127.6 million. The deal is expected to complete within 45 days and is anticipated to be immediately earnings enhancing. The transaction will create a significant player in the digital privacy market and will enable Kape to expand its footprint in North America with a broader product offering.
Companies: Kape Technologies
Kape is set to acquire Private Internet Access (“PIA”) for a cash-free/ debt-free total consideration of $127.6m, representing an EV/FY’18 EBITDA multiple of 8.7x (presynergies). The strategic rationale is compelling, immediately doubling Kape’s paying subscriber base, creating an estimated $4.5m cost synergy – resulting in pro-forma sales and EBITDA of $110m and $27m respectively - and further, improving Kape’s Data Privacy geographic footprint and functionality stack. PIA is cash-generative (FY’18 CFO: $16.3), growing sales +5% pa. and is expected to quickly benefit from Kape’s digital marketing capabilities. Revenue is expected to be 57% higher for both FY’20E and FY’21E, with the deal forecast to be 13% EPS accretive in FY’21.
Companies: Kape Technologies
Zinc Media has today announced a further £4.3m of new commissions on top of the £4.8m announced on 10 September. These new commissions are anticipated to deliver improved margins in-line with industry standards which represents a critical step in demonstrating progress against the Group’s transformation agenda, and is key to improved free cash flow and longer term profitability. Additionally, the announcement of a large international production with the US-based Smithsonian Channel titled ‘The Curious Life and Death of…’ won by Blakeway, demonstrating positive development in international business. We are encouraged to see management clearly executing against its four-part transformation plan laid out in September, targeting: 1) Increase London and Manchester TV gross margins; 2) Revenue growth and diversification; 3) Cultural and creative renewal; and 4) Investment in operational excellence. Management have maintained positive win momentum seen recently, adding to £4.8m of commissions announced in September, £2.8m in June, and £5.1m from May. Elsewhere, Reef TV has continued its recovery with additional programmes added for Police Code Zero, whilst Tern TV continues its strong performance with repeat commissions for Children’s Hospital amongst other titles.
Companies: Zinc Media Group
Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m. Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected late January 2019. Chaarat Gold Holdings—RTO, the Company intends to acquire Kapan Mining and Processing CJSC, which owns the Shahumyan medium-sized polymetallic mine in Kapan in the Republic of Armenia. No raise, market cap of £110.1m, due early Feb
Companies: TENG DEST KMK PCA ABC EUA NUC AVCT SBIZ RBD
These interims include three months of RhythmOne but the integration is ahead of schedule and they are presented as one. Taptica’s original Performance business continued to suffer in difficult markets and saw a sharp decline in H1. The impact of this has been mitigated by the addition of 3 months of RhythmOne to the extent that both H1 revenue and earnings are kept virtually unchanged YoY, with excellent cash generation. We are guided to ease FY forecasts but we note TRMR has achieved great efficiencies in Branding to maintain group blended margin despite the reduction in high-margin Performance sales. Looking ahead, TRMR has made an excellent strategic move into the booming video market, with its exchange up and running. It is well funded, streamlined and future new business on the platform should drop straight through to profit.
Companies: Tremor International
Shareholders yesterday approved the net £140m proposed acquisition of TI Media Group (‘TI Media’). The acquisition will be funded through a mix of debt and equity, and presents a compelling opportunity for Future to leverage its digital platform, ecommerce and content expertise, and global reach (TI Media continuing sales: >70% magazine). Post removal of broker restrictions, we now update forecasts for both TI Media (assumes endApril’20 completion) and Barcroft Studios acquisitions, with an additional underlying upgrade due to better than anticipated growth at the FY’19 outturn. FY’20E and FY’21E sales are upgraded by 41% and 79% respectively, with OpFCF forecasts are upgraded by 42% and 66%. The TI Media acquisition is forecast to be 26% EPS accretive in FY21E. A 19x EV/EBITDA multiple based on calculated pro forma FY’20E EBITDA generates an intrinsic value of 1,890p/share.
Pearson's H1 15 results showed revenues up 1% organically to £2.2bn (before a 4% forex positive impact) and adjusted operating profit down 4% to £72m. This is nonetheless rather meaningful as H1 is only a small part of the FY results (c.60% of sales and c.90% of profits generated in H2). The dividend is raised by 6% to 18p and management reiterated its previous FY15e guidance for adjusted EPS of 75p to 80p, assuming exchange rates at last 21 January's levels (2014 average £:$ rate was 1.65; as a reminder, a 5% move in the average £:$ exchange rate for the full year has an impact of approximately 1.2p on adjusted EPS) and no change in the portfolio. Note that the disposal of PowerSchool, sold to Vista Equity Partners for $350m in mid-June 2015, will reduce EPS by 1p and that, if current rates persist until end-2015, it would have a -2p impact. But largely overshadowing these results, was the announcement of Pearson's intention to sell the FT Group to Nikkei Inc. for a gross consideration of £844m cash (above Axel Springer's £750m offer), followed by the confirmation of also being in discussions over the potential sale of its 50% stake in The Economist (further announcements due; not done yet). This had been around for some time, namely since the departure of previous CEO Marjorie Scardino in early 2013, and definitely focuses the group on global Education.
PSON’s interims contain no major surprises, but we have revised our forecasts to reflect the patchy trading performance, a mixed outlook and the FT Group disposal (a positive initiative). The result is FY15E EPS and DPS reductions of 4%/1%, respectively. We remain cautious on PSON’s trading outlook, the execution difficulties implied by digital evolution in the global learning market and the possibility of contract losses in N. America. We have trimmed our TP from 1,179p to 1,131p and consider its stock fairly valued.
Revenue and EBITDA results for the full year are ahead of expectations on the back of strong trading. Revenues rose a total of 22% (15% organic) driven by sales execution. Strong sales has also boosted the deferred revenue balance by 32% to over £60m, supporting a strong outlook for 2018 and underlining the quality of revenues. The group is pushing ahead with commercialising its product by extending its addressable market yet again, boosting the ultimate growth potential of the business. EBITDA growth was 14% despite investment. Healthy trading and visibility (c75% estimated by Company) helps offset the likely US$ headwind likely in H2’18 meaning we have maintained our recently upgraded forecasts. Based on our peer-based approach to valuation we estimate an intrinsic value of 914p, thus implying some further significant upside potential for the stock. Another material acquisition could add more value.