Hybridan Small Cap Feast - 20 Feb 23

20 February 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objec

Keystone Law - Trading Update - Ahead of Market Expectations

Keystone Law has announced a trading update indicating that the Group has performed well through the second half of the year and that like-for-like performance has returned to near pre-COVID levels. This results in the Group expecting to see results “comfortably ahead of current market expectations” for FY21 which we see as a strong message and reiterate our buy rating.

Keystone Law - FY21 Interim Results – Solid in market context

Keystone Law has reported good top line growth YoY for the first half albeit with PBT below last year. In the context of Covid-19 and lockdown in the UK, we see this as a solid performance. The stock has underperformed significantly in the past couple of months suggesting to us that market expectations were low heading into the results and the recommencement of the dividend should support better performance going forward.

Keystone Law

FY20 Results – Resilience for FY21

Cracking the WIP; a deep dive into sector fundamentals and trends

With 6 law firms now listed in the UK, and likely more to come, the listed legal model is gaining clear momentum, with significant outperformance against the broader market (sector index up c.25% against c.10% ASX Index, YTD). We publish a follow-on from our sector note published earlier this year; ‘Courting success: the future of listed legals’, exploring three separate areas; o The broader legal services market o Developments within the listed legal sector o A quantitative deep-dive into

Interim results; slight upgrades to FY20E

Keystone’s interim results, out last week, saw H1 revenues of £23.0m (up 15.3%), with Adj PBT of £2.7m (up 15.3%). Cash conversion remained strong at 90.3%, with net/gross cash (no debt) increasing to £6.4m. An interim dividend of 3.2p, and an 8p special dividend was declared. We nudge up FY20E revenues by c.1%, to £49.0m with a c.1.5% increase at Adj PBT level to £5.7m, albeit leave FY21E forecasts unchanged. At 35.2x FY20E (31.3x FY21E), we maintain our PT of 520p and Neutral recommendation.

Upgrades to forecasts, release of FY22E numbers

Following FY19A results last week, we upgrade FY20E and FY21E forecasts to reflect an increase in business momentum. We increase FY20E revenues by 3.0% to £48.6m, and adjusted PBT 6.7% to £5.6m. For FY21E we nudge up revenues by 1.3% albeit keep earnings broadly flat. Our newly released FY22E forecasts expect £62.3m of revenues and £7.2m Adj. PBT. We increase our PT to 520p from 460p (set by DCF) on updated forecasts, yet remain Neutral.

FY19 Results ahead of expectation

Keystone Law released FY19 results this morning, coming in ahead of forecasts with revenues of £42.7m (Arden £40.8m) and Adj. PBT of £5.1m (Arden £4.8m), despite having upgraded forecasts in January upon pre-close trading update. We highlight strong double-digit topline growth of 35.1%, outstripped by PBTA growth of 56.8% due to a one-off piece of work at higher margin and the operational gearing of the Keystone model. The shares travelled well into results, and trade on a relatively full-lookin

Upgrades to forecasts

We update our forecasts following Keystone Law’s trading update on Monday 21st January. The Company’s pre-close trading guided to reported profits comfortably ahead of current market expectations, and we model c.8% upgrades to FY19E Adjusted EPS as a result.

All rise!

The UK legal service sector looks intrinsically attractive to investors, with its inherent high added-value, resilient growth through all but the very worst of economic times and fragmented nature. Five companies representing about 1% of the huge UK legal sector are all we have seen so far on the UK stock market and this is clearly going to grow, as listed law firms drive home their advantages and expand. Their UK domestic focus has brought share prices under pressure which looks wrong given the

Initiation of coverage

We initiate coverage on Keystone Law (PT 460p, Neutral), Knights (PT 240p, Buy) and Rosenblatt (PT 120p, Buy) within this note, complementing our existing coverage of the remaining listed lawyers (Gateley*, Gordon Dadds*) and legal services companies (Anexo*, NAHL, Redde).

Momentum screen refresh + 7 highlighted stocks

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 cons

AIM Journal

Last year, Venture Capital Trusts raised the second-highest amount since their launch in 1995, according to the Association of Investment Companies. This is good news for smaller companies seeking growth finance. Changes to pension regulations mean that VCTs are expected to continue to attract investors. Individual qualifying companies can receive up to £10m from VCT investors.

Hybridan Small Cap Feast - 23 Mar 23

23 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Audioboom Group - Robust FY22 results, maiden 8p dividend planned for FY23

In today’s FY22 results, Audioboom has reported adjusted EBITDA and net cash in line with the January trading update, highlighted an encouraging start to FY23, and announced plans to pay a maiden FY23 dividend. FY22 revenue growth of +24% yoy to $74.9m has been driven by +16% growth from core premium sales, +70% growth from Showcase, and +37% yoy growth from Sonic, and enabled Audioboom to outperform the wider podcast industry for the sixth consecutive year. A tight control on cost drove adjuste

A maturing portfolio

Frontier IP has reported interim results (H123) that reflect a period of strong technical progress but without the large revaluations of previous periods. Net assets per share decreased to 88.2p (FY22: 88.5p) while Net Cash increased to £5.8m providing the Group with a multi-year cash runway. H123 saw a number of important commercial and technical developments with FIPPs management highlighting Pulsiv and Alusid as moving beyond inflection points. A £0.5m pre-tax loss reflects no major net reval

Hybridan Small Cap Feast - 21 Mar 23

21 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Cenkos: Braemar Plc -- Record revenue and profitability

In a trading update for the year to 28 February 2023, Braemar highlighted record revenue and profitability for the period. Braemar expects to report revenue not less than £150m, up at least 48.1% on FY22A, and underlying operating profit of not less than £20m, c100% ahead of FY22A, with all parts of the business performing well and further helped by a positive dollar FX tailwind. Braemar has increased its investment in the business during H2/23 and with trading in the current year staring well,

Hybridan Small Cap Feast - 16 Mar 23

16 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 24 Mar 23

24 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Fintel plc (FNTL LN) - Growth driven by FinTech

Fintel’s 2022 results provides details behind its January pre-close, which revealed: • 8% core revenue growth to £56.4m (FY21: £52.2m) • 7% core SaaS & Subscription revenue growth to £36.8m (FY21: £34.3m) • 4% total revenue growth to £66.5m (FY21: £63.9m), including surveying & panel management • Adjusted EBITDA growing.6% to £19.4m, in line with Board expectations (FY21: 6%), while adjusted core EBITDA grew 9% to £18.6m (Zeus forecast: £18.0m) • 118% (FY21: 116%) operating cash conversion,

FY22 update – Performance in-line & board changes

RBGP has published its FY22 pre-close trading update this morning. Unaudited FY22 revenue, adj. EBITDA and adj. operating profit are expected to be in-line with our estimates. Professional Services, saw good performances across both, the legal services and sell-side corporate finance offering. Whilst there is no resolution on decreasing exposure to LionFish, the Group is encouraged by accelerating developments. RBGP also announced a number of changes to the board, with Nicola Foulston, CEO, havi

SP Angel Morning View:Copper prices tick higher on improving fundamentals as Trafigura expects $12,000/t

Pricing power underpins expectations

Morning Note – 23 March 2023

Solid Q4 NAV, Hydro demonstrates its power

The Q4 NAV rose 1p (net of a 1.25p dividend) to 118.7p, taking the NAV TR for the year to 19.6%. DORE’s solid Q4 performance was the product of multiple countervailing forces (detailed below). DORE’s decision to store (in early Q4) hydro-generation capacity (water) in its dams facilitated higher value generation later in the period and above expected hydropower revenues. In light of recently published discount rates for UK Solar (7.0%-7.5%), DORE’s valuation of its UK Solar assets at 8% feels co

Ricardo (RCDO LN) - Up with events pending CMD

We have been positive on RCDO as trading and order intake has recovered, but we think the stock will now mark time pending the CMD and strategy update in May. We refresh our estimates and valuation after recent H1s, and another tuck-in acquisition. For FY23e our revenue is lifted by 2% to £429m and operating profit lifts by 4% to £34m. Our EPS is held back slightly (up 2% to 33.1p) with higher assumed taxes and cost of debt. Similar upgrades are applied in FY25e. With higher estimates, record or

No frills Q3 update; FY guidance confirmed

Experian reported a Q3 FY23 trading update in line with our expectations. Organic growth moderated to 6% yoy (vs 8% in both the Q1 and Q2) due to a tough comparison base. The consumer services segment continued to lead, while core bureau (i.e. ex-mortgage) growth also remained resilient. The management reiterated its FY23 guidance. Overall, no big surprises and hence the share price reaction remained muted (+0.2% at the close). We maintain our cautiously optimistic view on the stock.