Equals' FY19A results confirm another year of strong, double-digit revenue and adj EBITDA growth. The move to a B2B focused offering continues to progress and looks well timed in view of Covid-19's impact on overseas travel. While the pandemic impacted Q2/20E trading early on, we note June KPI's indicate a positive rebound. Given the continued uncertainty as to Covid's full impact upon FY20E trading, we refrain from reissuing forecasts and thus leave our recommendation under review.
Companies: Equals Group
Today's update confirms Equals delivered another quarter of significant revenue growth YoY, delivered by organic and acquisitive means. Performance across the product range has varied unsurprisingly and we expect these trends to continue over Q2/20E. Given the great uncertainty over the duration and severity of COVID-19's impact on the group, we withdraw FY20-21E forecasts and place our recommendation Under review, awaiting further clarity. Equals is supported by a strong, debt-free, balance sheet and is undertaking measures to further conserve cash.
Today's update confirms Equals has delivered a second straight year of material revenue and profit growth, despite difficult market conditions, with a significant shift in the revenue profile towards more profitable B2B customers. Given profit delivery has been slightly lower than expected, we rebase our forecasts to take a more prudent view of trading in years FY21E and FY22E, but we are confident Equals has now assembled the products, infrastructure and management it needs for strong growth.
Plaid, the U.S. start-up, whose software helps link fintech apps with people's bank accounts, said on Thursday it was now rolling out its services in Ireland, France and Spain. According to consultancy firm EY's global fintech adoption index, Ireland's level of adoption stands at 71%, Spain's at 56% and France's at 35%. "Ireland is going to continue to grow and generate really fantastic companies," Plaid's chief said. Plaid is one of our top two Fintechs to watch. PayPal is making the biggest acquisition in its two-decade history, announcing on Wednesday that it's buying Honey Science for about $4 billion. Honey, which is best known for providing a service that helps consumers find deals while they shop online, works with 30,000 online retailers and claims to have 17 million monthly users. PayPal said Honey's technology will help it reach consumers as they begin their "Shopping journeys" with personalized offers. In our view, PayPal’s deal may demonstrate a step toward the new normal of leveraging consumer data. Commission-free stock trading app Robinhood has announced plans to officially launch in the UK next year, marking its first market outside the US. The fintech 'unicorn' opened a waiting list for UK customers following yesterday’s announcement, with Rander Rutgers, head of Robinhood UK, telling Yahoo Finance UK that the app would be tailored to the UK market. We believe that the solvency of a number of UK-based legacy brokers will be tested as aggressive subsidisation and lower overheads of FinTechs drives down pricing.
Companies: BGO BOKU EQLS TRU NETW
The Pebble Group, a provider of products, services and technology to the global promotional products industry, announces its intention to seek admission of its shares to trading on the AIM market of the London Stock Exchange, which is expected to take place in early December 2019.The Group delivered revenue of £99.8m in the year ended 31 December 2018.No mention of bottom line and a suggestion that funds raised would provide an exit to private equity shareholders and the repayment of debt. Offer TBA.
Longboat Energy raising £10m. Expected admission November 2019. The company has been established by the former management team of Faroe Petroleum to create a new full-cycle North Sea oil and gas company .The strategy to achieve this will initially be through the acquisition of assets where the management team can add value through subsurface and operational improvements, follow-up deal opportunities and nearfield exploration; and by value creation through the drill bit.
Companies: ORR CORA ECSC SCPA GAN UPR ITM EQLS KAPE ARCM
AT&T announced the launch of HBO Max streaming service for May 2020, with a new "Game of Thrones" series at the current HBO price of $15/month. The move surprised analysts and investors attending the Warner Media presentation on Tuesday as it was lower than expected. HBO Max is expected to reach 75 million to 90 million global subscribers by 2025, with about 50 million of these coming from the United States. The success of HBO Max is in many ways a referendum on a strategy to merge content with the means to distribute it. Challenger banks and FinTech firms are expected to have half of all consumers using their payments, card and retail banking accounts in the next three years, according to Capgemini. The group’s World Retail Banking Report highlights how challenger banks are changing the overall banking journey as well as offering customers new services, like quick or early access to funds not covered by traditional loan or card systems. Traditional banks have the right product but are "Lagging behind and giving ground to non-traditional payers in the last-mile customer experience". In our view this should surprise nobody. But the acid test of trust through a future financial crisis is yet to occur. Huawei Technologies lifted its share of China's smartphone market to a record 42%, with third-quarter shipments rising by two-thirds as domestic consumers rallied behind it after US sanctions, data released on Wednesday showed. Huawei strengthened its dominance of the world's biggest smartphone market even as the Chinese company was all but banned by the US in May from doing business with American companies, significantly disrupting its ability to source key parts We are surprised by the strength of recent data supporting Huawei.
Companies: 7DIG ZOO AMO BOOM BGO BOKU EQLS MIRA TECH
The recent run-up in semiconductor stocks hit a speed bump Tuesday afternoon that could turn into much more. Texas Instruments gave a forecast that was much worse than expected in a Tuesday earnings report, raising questions over whether the cycle is anywhere near the trough as was widely expected.
Companies: ENET TRAK BGO BOKU CAPX CML EQLS IQE SEE TCM TRCS QTX XPP FIN NETW
Facebook's Libra plans continue to stumble as PayPal quits the digital currency project, with Visa and Mastercard also reconsidering their involvement. In a statement late on Friday, PayPal says it has decided to "Forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities”.
Companies: BGO BOKU ECK EQLS TECH
Companies: ABDP IHC BIRD JWNG WCH RBD FARN MIND EQLS CHRT
Amazon is in talks to bring the cashier-less technology that runs its Go stores to other retailers like airport shops and movie theatres, according to people familiar with the matter. The effort would help Amazon grow its retail presence, so the company can lower its reliance on online shopping, but at a faster pace and at lower cost than building its own stores
Companies: BGO BIDS BOKU CDM EQLS FDEV GFIN KWS SUMO TM17 TECH
Equals has continued to produce high rates of YoY growth over H1/19A and thereafter, despite macroeconomic events negatively impacting on consumer/business confidence. We consider this reflects the increasing breadth and strength of the business, moving away from its consumer FX roots with increasingly product, customer and geographical diversity driving growth, aided by supply chain rationalisation. We see these steps advancing Equals into an integrated money manager fit for the future.
Stripe Inc said on Thursday it is raising $250 million in its latest funding round, which values the payments start-up at $35 billion, a dramatic 56% surge from a previous valuation at the start of the year. The latest valuation puts Stripe in the same league as home rental giant Airbnb Inc, which is also planning go public in 2020. Stripe has received strong positive feedback from our private FinTech contacts. Meanwhile, the IPO pipeline for 2020 is already heating up.
Companies: CALL TRAK BGO BOKU ECK EQLS LOOP NET QTX SEE TECH TCM TRCS
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A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
Companies: AGY ARBB ARIX BUR CMH CLIG DNL HAYD NSF PCA PIN PXC PHP RE/ RECI SCE SHED VTA
Accelerating activity in to FY21
Companies: Manolete Partners
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 MIRA TERN CKT
Record delivered full year results matching expectations with assets under management equivalent (AUME) slightly ahead as positive inflows more than offset the impact of market moves and fee margins were broadly stable. The group also demonstrated its operational resilience and expertise to clients during the onset of COVID-19 and accompanying volatility. Looking ahead, the group has a fresh focus on growth and to support this is investing in a measured way in IT and its staff.
S4 Capital has announced the merger of Lens10, a leading Australian digital strategy & analytics consultancy, with MightyHive, its data & programmatic media practice. Founded in 2010, Lens10 provides a range of data services including digital strategy, digital analytics, optimisation and tag management. It is a certified Google Partner in Google Analytics, Google Cloud & Google Marketing Platform and is an Adobe Analytics partner. It has 25 data specialists in Melbourne and Sydney, and has a blue-chip client list including CottonOn, National Rugby League, Australian Ballet and ME Bank. Data analytics continues to grow in importance as marketers accelerate their digital transformation and S4 Capital indicates it has seen explosive demand for these services. No financial information has been disclosed, though we note the group reiterates its commitment not to compromise its balance sheet, which remains net cash. Separately, the group has announced that Miles Young, previously Chairman & CEO of Ogilvy, is joining the board. He has particular expertise in creative work and talent, new technologies and Asia Pacific developed over 35yrs at Ogilvy
Companies: S4 Capital
REACT Group plc (REACT) is exploiting a gap in the market for specialist deep cleaning services for customers in the public and private sectors, with revenues split 50/50 between reactive work and regular maintenance. The Covid-19 pandemic has led to a significant upturn in activity in certain sectors (such as healthcare and transport) but temporarily weaker demand from others (such as hospitality). While its Covid-related work is by no means its biggest revenue generator, the legacy of the pandemic is likely to have a profound impact on future levels of activity as all businesses and organisations become more aware of the importance of maintaining high standards of cleanliness and hygiene. With a new management team and strengthened balance sheet, we believe the outlook is positive, a view that has been supported by the Group’s interim results which have generated maiden profits.
Companies: React Group
Wirecard UK’s suspension by the FCA has been lifted, allowing U Account business through Shelby Holdings and Morses Club to resume as normal, permitting customers full access to cash, which was previously frozen, albeit ring-fenced in a safe Barclays UK account. Morses Club has offered its U Account customers free use of the previously affected U Account accounts in July as compensation for the issue, helping to mitigate any negative impact and ensuring the relationship with customers remains strong.
Companies: Morses Club
Companies: AGR CSH ESP DIGS IHR LXI PHP RESI SIR SUPR THRL SOHO BBOX SHED WHR
Hipgnosis Songs Fund (SONG LN) has today announced a trading update for the full year ending 31 March 2020. The unaudited NAV has risen 13% YoY to 116.7p, up 14.3% since the last published NAV of 102.2p as at 10 January 2020. This represents a like for like valuation uplift of 11.4%. All equity has been fully deployed and shareholder approval has been sought to increase net debt from 20% to 30%. Revenue is strong with £64.7m generating an EPS of 10.7p (more than 2x the annual 5p dividend target). NAV growth has been driven by revenue statements which were up 2%, and an increase in streaming growth rate assumptions by the independent valuers. The portfolio comprises 54 catalogues, with 13,291 individual songs, now valued at £757m which was acquired at purchase price of £697m on an acquisition multiple of 13.9x – now valued on 15.0x historical earnings.
Companies: Hipgnosis Songs Fund Ld
FY20 Interim results
Companies: Litigation Capital Management
The covid-19 pandemic has had a devastating effect on the share price of property companies, with 31% wiped off the value of their total market capitalisation during the first quarter of 2020.
Companies: AEWU CREI CSH BOOT INL HLCL THRL SUPR RESI RGL DIGS GR1T SOHO PHP BOXE ASLI UTG AGR UAI BLND UANC CAL SHED CWD WHR EPIC WKP GRI YEW HMSO PCA INTU NRR
FY20 results – increased firepower to acquire
Companies: First Property Group
Gore Street has moved a meaningful proportion of its 900MW pipeline into exclusivity with agreements covering a 81MW operating site and a 50MW project in development, both in the GB market. These add to the recent announcements of projects in Scotland and near London. Power storage continues to offer the opportunity to acquire projects that will deliver the fund’s target 10% IRR and we think there is plenty more to go for.
Companies: Gore Street Energy Storage Fund
Martin Currie Global Portfolio Trust’s (MNP’s) performance has improved considerably following the appointment of manager Zehrid Osmani on 1 October 2018, since when he has refined the trust’s investment process. MNP has now outperformed its benchmark over the last one, three, five and 10 years. The manager focuses on high-conviction positions and his long-term horizon helps navigate short-term market volatility. MNP has performed well despite a lack of exposure to the high-profile, large-cap US technology stocks that have led the market. Osmani has generated alpha by investing in some mid-cap stocks that are not particularly well followed, such as US company Masimo (non-invasive patient monitoring technologies), which is now the largest position in the portfolio.
Companies: Martin Currie Global Portfolio Trust
The group’s final results were broadly in line with our forecasts, with an 11% increase in revenue, marginally lower than expected profitability, and an 11% increase in the proposed dividend.