Open Orphan (LON:ORPH) has rapidly restructured and integrated its Venn and hVIVO subsidiaries, and is delivering on its growth strategy by maximising its specialist capabilities and is converting a pipeline with an estimated value of over £100mln, to deliver long-term, profitable contracts. This w
Companies: Open Orphan Plc
Ideagen (IDEA): Corp | Open Orphan (ORPH): Corp | Quixant (QXT): Corp
Companies: IDEA QXT ORPH
Open Orphan has announced that hVIVO has signed a new contract for an RSV human challenge study clinical trial with a top 3 global pharmaceutical company. The contract shows the Group's ability to convert the existing hVIVO pipeline and engage with the top customers in the industry providing great encouragement for investors in the medium term. Reiterate Buy
Chaarat Gold Holdings (CGH): Corp | Filtronic (FTC): Corp | K3 Business Technology (KBT): Corp | Open Orphan (ORPH): Corp
Companies: KBT FTC CGH ORPH
Open Orphan (ORPH.L): COVID-19 vaccine trial contract
Flowtech Fluidpower (FLO): Corp | M.P. Evans (MPE): Corp | Open Orphan (ORPH): Corp | Quartix (QTX): Corp | Trifast (TRI): Corp
Companies: FLO MPE QTX TRI ORPH
Open Orphan has announced the signing of a new contract with Codagenix Inc, a vaccine developer, to conduct a phase 1 trial for a COVID-19 vaccine candidate. The trial will focus on evaluation of safety and immunogenicity of the single-dose intranasal candidate in 48 volunteers. Although this is a phase I trial, in our view, it goes some way to validate Open Orphan's offering in the market and could lead to follow-on contracts. We expect the opportunity available to Open Orphan continues to increase and that H2 2020 should bring further good news flow and momentum to the stock. Reiterate buy
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
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RBG Holdings had H1 revenues of £12.0m, up 17% against H1’19, of which £11.7m came from the Group’s law firm, RBL. On a LfL basis (excl. £2m of discretionary gains from litigation assets in H1’19), Group revenues were up c.46% YoY. EBITDA of £2.6m offers still-compelling margins of 22%. Transaction delays in Convex and a period of investment in LionFish held back ST performance for these higher margin divisions, yet pipelines remain healthy for Convex. Management is bullish on its ability in H2 to divest litigation assets in order to fund new investment, and in line with strategy. Continued uncertainty over timings around Convex transactions completing, and COVID headwinds, means we keep forecasts withdrawn, however suggest an intrinsic value of 90p is comfortably achievable for the shares.
Companies: RBG Holdings Plc
Full-year results to 31 May 2020 deliver revenue of £15.0m (+10.3%) and EBITDA of £6.8m (+36.0%) as noted at the acquisition of Quantuma Advisory. We continue to believe a key value driver of owning K3 shares is an investor’s exposure to the positive disruption being wrought by the company’s model, which now has the ability to be applied to synergistic markets across the addressable professional services SME sector as a result of the two recent acquisitions. The already proven restructuring and insolvency practice specifically has the potential to deliver significant upside in the current environment. We reiterate our estimates, noting EPS growth of 63% between 2020A and 2023E. Target price remains 300p, offering 100% upside from the placing price of 150p.
Companies: K3 Capital Group Plc
H120 adjusted EBITDA of £9.1m was the main positive surprise for us in Ergomed’s full interim report released today. We have increased our adjusted EBITDA forecasts to £18.3m (up 8.6%) in 2020 and £20.1m (up 6.8%) in 2021. A strong order book (£151.4m, up 22.0% from the end of 2019) with high visibility into 2021, continued overall business growth and a strong balance sheet should allow Ergomed to successfully navigate the COVID-19 pandemic, invest in organic growth and look for potential strategic acquisitions. Our valuation is upgraded to £409m or 845p/share.
Companies: Ergomed Plc
Against a backdrop of global economic turbulence driven by COVID-19, Bango’s H1 20A results confirm robust growth in End User Spend (“EUS”) and revenues, alongside record EBITDA and a solid improvement in operating cash flow. Execution in the payments business remains strong, and growth in Bango Marketplace in our view demonstrates the group’s increasing traction in data monetisation. The outlook statement is positive, and we make no changes to underlying estimates following the announcement. Overall, we continue to believe that momentum remains strong, and that the group is well placed to deliver its FY 20E targets.
Companies: Bango Plc
WATR reports interim results this morning which reflect no slackening in the group's positive momentum, and which evidence again the effective business model. Adjusted PBT grew by a healthy 20% (statutory PBT growth of 33%), suggesting that the business continues to operate strongly and in such a way as to meet and exceed its targets again notwithstanding the challenges imposed on businesses generally by Covid. Within the overall growth momentum, both the franchise business and the Corporate division saw impressive margin gains, while franchise royalty succeeded in growing notwithstanding reacquisitions reducing the pool of franchises, a positive outcome. FY2020E forecasts are reaffirmed, although conservatively we leave them unchanged at this point. WATR is the only national US operator providing a leak detection service across the US, and this is a seriously large market – the insurance sector alone worth $US13bn p.a. above and beyond the traditional markets WATR has served. Now spanning clean and dirty water (Covid-19 opportunities), the company operates as an integrated entity and continues to generate new, value-added products. At current levels, we see significant upside to our 500p-plus fair value assessment, and note WATR's aspiration towards $US250m of underlying sales.
Companies: Water Intelligence Plc
Water Intelligence (WI) operates in a sizable and expanding market. The Group provides minimally invasive water leak services and is building a distribution platform to leverage its installed and growing customer base. The company is a designated Essential Service Provider during CV19 and expects to see increasing demand for its products as the Green Economy gains traction. WI's management has a proven track record of developing new revenue streams and the Group's core services are uncorrelated to either the geopolitical or economic climate. Management is selectively reacquiring franchises and converting them to corporate-operated locations. This converts indirect revenue to a direct, higher-margin income stream under the same brand, and results in improved profitability and significant earnings accretion. We believe the shares trade at a substantial discount to fair value and initiate coverage with a target price of 452p. Our scenario analysis on page 20 demonstrates that the shares could rerate at closer to 600p based on the Group's current reacquisition strategy
FY20 results reflect a year of trading in-line with earlier expectations, until being significantly interrupted in Q4/20 by the impact of Covid-19. Despite this, 1pm remained profitable throughout, despite accepting forbearance requests and prudently lifting bad debt provisions for the future. Post-period, there has been a noticeable pick-up in trading as the UK economy recovers, which 1pm is currently positioning itself for. A P/TNAV of 0.55x materially undervalues 1pm, hence we remain at “Buy”.
Companies: 1pm Plc
Positive EBITDA in FY20A was a major milestone. Investment across the business is up and there is a clear strategy in place to deliver value for shareholders. The balance sheet is strong post the placing and the business is now self-sustaining. In light of this Rosslyn trades on an unwarranted discount to the software sector.
Companies: Rosslyn Data Technologies Plc
Keywords Studios has again showed the resilience of its model in H120, delivering 8% l-f-l revenue growth, 19% adjusted EBITDA growth and 17% adjusted EPS growth despite the impact of COVID-19. Adjusted EBITDA margins of 17.8% have held up better than we expected. Looking ahead, we see sustained industry growth, led by the console transition in Q420, with publishers increasingly recognising the resilience Keywords adds to their development processes. Following its third acquisition of the year, we see management once more focusing on M&A with net cash of €101m. Keywords’ strategy, which has delivered a five-year EPS CAGR of 42%, appears sustainable, with dividend payments to be resumed in FY21. As such, we believe that the shares remain set for continued appreciation.
Companies: Keywords Studios Plc
FRP has announced the £5.3m acquisition of JDC Group, a corporate finance and forensic services firm with a strong presence in East Anglia, Essex and London. The deal, paid in cash (upfront & deferred) and new FRP equity, adds scale FRP's corporate finance and forensic capabilities, while widening FRP's geographical spread in its core restructuring activities. Given the multiple paid and minor dilution, the deal is accretive to both FY21E (+3%) and FY22E (+5%) earnings per our newly updated forecasts. We see JDC as a highly complementary bolt-on.
Companies: FRP Advisory Group Plc
H1 was very challenging for NAHL due to COVID-19 but, demonstrating its resilience, the group remained profitable and free cash flow increased strongly. As a result, net debt reduced from £21.0m at December 2019 to £18.5m at June 2020. New banking covenants have been agreed and the £25m facility term extended by a year to 31 December 2022. Since the end of June the group has observed an increased demand for its services and, in August, personal injury enquiry volumes recovered to c.70% of prior year. While the potential for further lockdowns makes the short-term outlook uncertain, we continue to believe that with prudent management of short-term cash flow, NAHL can trade through the current challenges with its long-term potential undiminished.
Companies: NAHL Group Plc
Restrictions relating to COVID-19 have had a mixed effect on Boku’s H120 performance, with the Payments business benefiting from increased demand for digital content, while some Identity customers saw weaker demand for their services. Despite this, Boku reported adjusted revenue growth of 9% y-o-y and, demonstrating the operational leverage of the business, adjusted EBITDA growth of 84% y-o-y. With guidance unchanged for FY20, we maintain our EBITDA forecasts.
Companies: BOKU, Inc.
Driver Group has announced a strategic partnership with Africa’s leading claims and dispute resolution consultancy, EVRA Consulting (click here), which is headquartered in Johannesburg. The partnership combines Driver’s higher margin Diales services with EVRA’s relationships and network to bring the benefits of Expert commissions to clients across the African continent. The joint offering will give Driver access to 54 national markets across Africa. Additionally, the Group has strengthened its Middle East team, with the appointment of David Merritt, a well-known Quantum Expert with over 35 years’ experience in the construction and engineering sectors. Today’s announcement is in line with the Group’s strategy to expand its high margin Diales services, alongside diversifying into new geographies. Management guidance continues to be suspended and our forecasts therefore remain withdrawn.
Companies: Driver Group Plc
Timing is everything when it comes to innovation. Too early, and even ground-breaking technology can struggle to gain traction. Too late, and the opportunity might be lost. A tricky balance. However for Rosslyn Data Tech, we think this ‘battle-hardened’, cash-rich (Est Apr’21 net funds of £6.1m) & now profitable SaaS firm is ideally placed to benefit from strong secular demand for its cutting-edge & fully integrated Big Data, AI, spend analytics, SMDM (Supplier Master Data Management) & customs/duty handling applications.
The COVID-19 pandemic has had a significant impact globally in many areas. While primarily a health issue, it has had wide-ranging implications for stock markets, which have now rallied after the plunge in share prices in mid-March when the full severity of the emerging pandemic became more widely appreciated. Nonetheless, the FTSE 100 Index remains almost 20% off its late February 2020 figure.
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