Interim Results to 31 January 2024

Morning Note – 27 March 2024

Nanoco - Interims in line – JDAs point the way forward

Nanoco, the world-leading provider of cadmium-free Quantum Dot technology, has reported positive 1H24 results, and stated that FY24 performance is expected to be in-line with market expectations. We reiterate our FY24E forecasts. Operationally, the company has achieved strong progress over the past six months, and the interims statement includes further progress on the company’s next-generation revenue programmes being implemented post period end. We maintain our 60.2p price target.

Morning Note – 19 March 2024

Nanoco - Quantum Leap – Future market growth

Nanoco is a world leading technology provider enabling next-generation electronic sensors and displays with commercial programmes including a production contract with a global tier-one player. The company has a strong balance sheet position to support the next phases of its growth journey, and with addressable markets exceeding £100m across multiple customer verticals. We initiate coverage with a target price of 60.2p.

Nanoco Group - Mechanisms for shareholder returns confirmed

Following receipt of the £58.8m second tranche from the Samsung litigation on 24 January, Nanoco plans to return £30m to shareholders via a tender offer (c 38.5% of outstanding shares), alongside a £3m share buyback. After completing this £33m return and repaying c £5m outstanding debt, Nanoco expects to have c £23m cash to accelerate commercial production of nanomaterials at scale. With its validated technology, robust pipeline and strong financial position, we believe the group is positioned t

Return of Capital

Nanoco Group - Steps on the pathway to volume production

Nanoco’s trading update confirms that H124 revenues and EBITDA are anticipated to be in line with company expectations. The main new information is that the company has commenced the build and fitout of a new 300m wafer device facility to accelerate product development and test cycles with both existing and new clients. This gives Nanoco scope to grow development revenues in the near term and reduce time to market of new production materials, while aligning the development platform with infrastr

Nanoco Group - Another major milestone delivered

Following a successful proof of concept, Nanoco recently announced a new joint development agreement (JDA) with its existing European customer, now confirmed as STMicroelectronics. This milestone further validates Nanoco’s smart materials capabilities, building on the first commercial orders for first-generation materials shipped in late 2023 and the expanded partnership with its Asian customer. With an improved financial position, Nanoco has been able to proactively invest in accelerating the d

Nanoco Group - First commercial order fulfilled – major milestone

Nanoco’s announcement that it has fulfilled its first commercial order heralds the company’s transition from a development-stage company to a commercial supplier of quantum materials. The order provides support for our FY24 forecasts and is a key milestone on the company’s pathway towards becoming self-financing in FY25, with the potential to scale up significantly beyond that, if design wins in high-volume sensing applications can be secured.

Nanoco Group - Asian customer moves to the next phase

Nanoco Group has signed a new two-year joint development agreement (JDA) with its existing major Asian chemical partner to optimise and scale up production of Nanoco’s second-generation quantum dot materials for infrared sensing applications. This marks the company’s latest milestone on its path to becoming a commercial provider of nanomaterials to the sensing market and provides support for our FY24 forecasts.

Nanoco Group - Pathway to commercial production

FY23 was a turbulent but ultimately pivotal year for Nanoco. The US$150m Samsung settlement (US$90m net costs) will fund the planned £33–40m return to shareholders with the retained c £20m providing good support to make the transition from development to commercial production. The company’s first commercial order is expected this calendar year. While volumes are expected to be relatively modest, this is a key milestone, and successful delivery should ease the pathway to follow-on orders and new

Nanoco Group - Returning cash and investing in the business

Nanoco has announced its intention to return £33–40m of the funds won through the settlement with Samsung to shareholders, retaining £20m to execute its growth and intellectual property (IP) licensing strategy. Management expects to start this programme after it has received the second $75m tranche in February 2024 from the Samsung litigation. Operationally, multiple end-customer trials via Nanoco’s major partner are ongoing and it is seeing renewed interest from the display market. The group al

Nanoco Group - Concentrating on organic business going forward

Nanoco’s H123 revenues benefited from the successful delivery of technical milestones for its European electronics customer, taking it close to full production validation of two different wavelength materials for use in sensing chips. Shortly after the period end, Nanoco signed the final agreements to settle the litigation with Samsung. The settlement frees management to concentrate on getting the company ready for volume production in anticipation of receiving its first production order later i

Tracsis - Interims: FY order book visibility and a doubled pipeline

Interims to January are in line with the February TU, and materially unchanged forecasts for the FY July 2024. After the well flagged expected 1H24 revenue movement of -7% (vs 1H23 which had been strengthened by c£2m perpetual licence sales in the US), prospects for the second half are supported by several new contracts that will generate revenue in 2H24, in addition to material contract delivery milestones from existing large projects such as major TRACS Enterprise, Railhub deployments, and Rem

Eleco - FY23 recurring revenue growth of +22%, EBITDA +2% ahead

Eleco’s FY23 results show robust organic recurring revenue growth of +17% with recurring revenue +22% to £20.7m, adj EBITDA +2% ahead of the January update, and a confident outlook with Q1 ARR already at £24.5m vs £22.6m at FY23. At this point, the excellent start to FY24 leads us to reiterate our FY24-26E revenue, adj EBITDA, EFCF, and DPS, and we include the April 2024 acquisition of Vertical Digital in our FY24-26E net cash, as we explain below. As Eleco builds upon the successful acquisition

An excellent win, momentum rebuilding

Made Tech has won a material expansion (worth up to £19.5m/2yrs) with a long-standing customer, The Department for Levelling Up, Housing and Communities (“DLUHC”). Coming off the back of a soft H1 bookings performance, we expect this win to materially boost investor sentiment and reassure how notwithstanding a tough backdrop (given an impending general election) MTEC continues to outcompete legacy providers and in-so-doing, grow its share of wallet with large/strategic customers. Landing near FY

LIBERUM: 1Spatial: Walk the talk and get SaaSy

Morning Note – 24 April 2024

LIBERUM: Cerillion: Continued strong trading in 1H

Alphawave Semi - FY23 results, 1Q24 trading update

Following the updated guidance published last week, Alphawave reported a 74% YoY increase in revenue to US$321.7m for FY23 generating adjusted EBITDA of US$62.6m, up 34% YoY. As previewed, bookings in 1Q24 were strong at US$117.9m, up 20% YoY and ahead of guidance. The results release and conference call confirm that revised guidance mainly reflects a more conservative approach to revenue recognition under new CFO, Rahul Mathur, and an acceleration in the pace at which Alphawave is pivoting away

tinyBuild (TBLD LN) - Focused on H2 recovery

tinyBuild’s FY23 results confirmed a sharp drop in revenue and swing into adjusted EBITDA losses, as well as asset impairments and high cash burn. After already making $10m of annualised cost savings, the company continues to run-down its cash balance and now relies on a H2-weighted release schedule to reduce cash outflows.

Morning Note – 23 April 2024

To infinity…

Cerillion has announced a very solid update, as H1 sales and EBITDA are both up 10% y/y to £22.5m and £10.9m respectively, notwithstanding the exceptionally strong base period (sales and EBITDA +27% and +38% resp.). Results therefore point to continued strong customer demand, reflecting how Cerillion’s out-of-the-box product continues to resonate and gain adoption, particularly in a ‘budget conscious’ environment, by offering faster time to market, greater configurability and at a lower cost. Me

Synectics + (SNX, House Stock at 188p) - Positive AGM statement

Hybridan Small Cap Feast - 24 April 24

24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

In-line H1, strategic initiatives advancing at pace

As reported in March, underlying EBITDA profitability improved to record levels despite FX headwinds. Further platform and proposition developments were completed, key steps on its digital roadmap, and it has already won 7 contracts YTD. Alongside planned growth in private membership, this will at least offset the loss of one contract. Forecasts are left unchanged today and, as member engagement throttles back up, FX headwinds ease, and proof points of digital efficiency emerge, markets should b

itim - Further professional services contract secured with The Entertainer

itim is a disruptive SaaS-based platform that enables store-based retailers to implement a proven Omni-channel solution. This morning, the group has announced an additional professional services contract with its long-standing client, The Entertainer. Following a year-long trial, The Entertainer is opening in over 800 Tesco stores across the UK & Ireland, alongside a supplier agreement for Tesco stores across Central Europe. Under the contract, The Entertainer will extend its use of itim's Unify

Alphawave Semi: FY23 trading update, amended forward guidance

Alphawave Semi has reduced guidance for FY23 and prospectively citing lower revenues from China, changes in expected revenue recognition from long-term contracts, and continuing investment in R&D. The share price has reacted negatively, giving up most of the gains since the trading statement at the end of January. Current consensus, which is a good match for pre-existing guidance, should be reduced, most likely following release of the FY23 results and full 1Q24 trading update due on 23 April. H