Riber - Termination of coverage

Edison Investment Research is terminating coverage on Riber (ALRIB), Gemfields Group (GEM), Securities Trust of Scotland PLC (STS), Gresham House Strategic (GHS), La Doria (LD) and Studio Retail Group (STU). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

Riber - Order intake accelerating

Riber’s Q321 revenues were up 11% year-on-year. This growth partly offset the 20% contraction in H121 caused by a slowdown in MBE system orders during the coronavirus pandemic in FY20. Revenues for the nine months ended September 2021 (Q321) totalled €15.8m, 9% lower year-on-year. Order intake has improved substantially since FY20, but the resultant production schedule means that system deliveries are concentrated into Q421. MBE system orders continued to pick up in Q321, so management has reite

Riber - Emerging from the shadow of coronavirus

While Riber’s H121 performance was depressed by the lack of MBE system orders during FY20, customer confidence appears to be returning. The resultant increase in order intake points to a much stronger second half, with management forecasting over €30.0m revenues and an operating income of €1.2m for the full year. We are upgrading our FY21 estimates, raising PBT by 27%, while leaving our FY22 estimates unchanged.

Riber - Pandemic causes temporary revenue slowdown

Riber’s H121 revenues were €9.3m, or 20% lower than the previous year. This was because the coronavirus pandemic caused a slowdown in MBE system orders during H120 and Q320. The level of new system orders has picked up in H121, encouraging management to state that it expects to deliver an improvement in net profit during FY21. We leave our estimates unchanged.

Riber - Key enabler of compound semiconductors

Demand for Riber’s molecular beam epitaxy (MBE) is supported by exposure to key structural trends such as demand for faster data, next-generation displays and the proliferation and evolution of sensors to support greater automation and intelligence (Industry 4.0). We expect that management’s focus on growing revenues from services to the large installed base will support profit recovery in FY21. A relaxation in export controls or a major evaporator order would potentially represent upside to our

Riber - Potential intact despite pandemic

Riber’s FY20 results showed the adverse impact of customer uncertainty caused by the coronavirus pandemic and the French government’s tightening up on exports to China. As order intake has improved in recent months, with orders for three systems received since end FY20, we leave our FY21 estimates unchanged.

Riber - FY20 revenues in line with management guidance

Riber has announced that FY20 revenues will total €30.2m, which is in line with its guidance of around €30m and our estimates. The year-end order book is around half the prior year level, reflecting delays in customers signing contracts and difficulties obtaining export licences. We therefore leave our FY20 estimates broadly unchanged but cut our FY21 revenue estimate by 9% and EPS estimate by 56%.

Riber - Pandemic stretching out sales cycles

Riber’s H120 results show the impact of a delay in completing a production MBE system because of issues in obtaining key components during the pandemic. While management expects FY20 revenues of €30m, based on the existing order book, we are reducing our FY20 gross margin estimate, which cuts our FY20 PBT estimate from €0.3m to break-even. Noting the delays in closing orders, we model fewer deliveries of MBE systems during FY21, which reduces our FY21 PBT estimate by €0.8m to €2.0m.

Riber - Pandemic causing delays in closing orders

Riber’s order book at the end of June shows that potential customers are taking their time to place orders. While management is confident that customers will place orders for MBE systems during the second half, it is not clear that these will close in time for delivery during FY20. We therefore cut our FY20 revenue estimate by 16% to €29.6m and our PBT estimate by 88% to €0.3m. We leave our FY21 estimates unchanged.

Riber - Key technology for compound semiconductors

Riber has the dominant share in global molecular beam epitaxy (MBE) equipment. This equipment is used by researchers to develop next-generation compound semiconductor materials used in fibre-optic networks, electronic device displays and sensors for autonomous vehicles as well as for commercial material production. We believe that demand should be supported by exposure to key structural trends such as demand for faster data, next generation displays and the proliferation and evolution of sensors

Riber - Orders in pipeline offset export licence issues

Riber has announced that it has not been able to obtain export licences for three MBE systems worth a total of €4.0m that were scheduled for delivery in FY20. However it has recently received a new order for a single MBE system and management is confident of successfully closing orders for another two in time to complete deliveries by the year end. We therefore leave our estimates unchanged.

Riber - Sales cycles longer but MBE demand still strong

Riber's Q120 revenues reinforce the point we made in April that travel restrictions are causing delays in signing contracts. We adjust our FY20 estimates to reflect longer sales cycles and the lower than expected gross margin for molecular beam epitaxy (MBE) systems reported in the FY19 accounts, cutting revenue and EPS estimates by 7% and 26% respectively.

Riber - MBE system sales support FY19 recovery

A doubling in revenues from MBE systems during FY19 compensated for a reduction in evaporator sales and supported an improvement in reported EBIT from €0.0m to €0.9m. Order cover for FY20 is good and management does not anticipate that the COVID-19 pandemic will affect deliveries for FY20 overall, although performance will be second-half weighted. We will leave our FY20 estimates unchanged until the detailed FY19 accounts are released at the end of April.

Riber - FY19 revenue growth driven by MBE system sales

Riber’s FY19 revenue numbers show a 7% year-on-year increase to €33.4m, with a more than doubling in revenues from molecular beam epitaxy (MBE) systems offsetting substantially lower evaporator sales. The order book at the end of December 2019 totalled €28.7m, which is 76% of our FY20 revenue estimate. We will leave our estimates unchanged until the full results are announced in April.

Riber - Weak evaporator market affects H119

A strong uptick in MBE system deliveries only partly offset a reduction in evaporator revenue during H119, resulting in a 17% y-o-y drop in Riber’s sales overall and a shift from €2.8m operating profit in H118 to €0.5m operating loss. Noting the relatively low gross margin in H119 and continued weak demand for evaporators, we have reduced our FY19 and FY20 PBT estimates by 59% and 33% respectively. We see scope for share price appreciation as investors gain confidence that Riber can convert the

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

Audioboom Group - Q1 24 revenue growth of +11%, FY24E forecasts reiterated

Audioboom’s FY23 results and Q1 trading update show Q1 24 revenue growth of +11% yoy, $6.7m of March 2024 revenue marking the platform’s highest revenue month since May 2022, and a confident outlook that leads us to reiterate our FY24E forecasts. Following the focus on new initiatives through FY23, the platform is now in its strongest ever operational position, with a record 1.1bn monthly ad impressions created in March 2024, record global audience reach of 38.6m unique global listeners in Janua

Crimson Tide - FY23 reports +15% revenue; investment phase complete

Crimson Tide has reported FY23 results to December in line with expectations, with additional operating leverage benefitting updated FY24 and maiden FY25 and FY26 forecasts. FY23 delivered +15% revenue growth to £6.2m at 86% GM, of which over 90% is recurring, and maintained £5.8m ARR even after unexpected customer churn in the year as we previously noted. Crucially, the Group achieved milestone adj EBITDA profitability of £0.4m at 7% EBITDA margin, and edges closer to adj PBT profitability expe

Morning Note – 16 April 2024

Devolver Digital (DEVO LN) - Rebuild year

Devolver Digital encouragingly delivered 2023 results slightly ahead of expectations and provided a steady medium-term outlook that leads us to reiterate our 2024 Adjusted EBITDA estimates. Longer term, the company is now planning to further develop its two major planned titles, Human Fall Flat 2 and System Era's next major new release. We now expect those major titles to be released in 2026 rather than 2025, meaning we lower our 2025 Adjusted EBITDA forecast to $10.6m from $17.6m but introduce

Morning Note – 15 April 2024

Intelligent Ultrasound Group - GE Healthcare launches new Voluson Signature with

GE Healthcare has announced the launch of the Voluson Signature 20 and 18 ultrasound systems, with the related press release noting these systems ‘comprehensively integrate artificial intelligence’ to improve the ultrasound procedure for clinicians and the women being scanned. These ultrasound systems include SonoLyst, the AI which incorporates Intelligent Ultrasound’s ScanNav Assist and ScanNav AutoCapture AI software. The launch of additional Voluson systems including the SonoLyst suite of AI

Checkit - New product launch and contract wins

Checkit has won contracts with two customers worth at least £417k over the three-year lives of the contracts, confirming its ability to upsell to its existing customer base and supporting our forecasts. Having trialled the new technology with multiple customers, Checkit has launched its Asset Intelligence module, which uses advanced analytics and machine learning to enhance customer sustainability, reduce costs and increase revenue.

Soft growth patch

Auction Technology Group - H1/24 Trading update

ATG’s H1/24 trading statement indicates revenue for the six-month period to 31 March 2024 was $86m, a 6% increase on H1/23 (1% organic growth), helped by the addition of the EstateSales.Net (ESN) marketplace last year, which performed well in the period. Total marketplace revenue increased 2% (organic), driven by growth in value-added services (VAS) and event fees, offsetting a decline in commission revenue (mainly through lower asset prices).

Morning Note – 17 April 2024

Touchstar - Full year results: Recurring revenue strategy delivers further profit growth

Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning's full year results reflect the outcome of a multi-year strategy coming to fruition for the group, with recurring revenue growth of 8.7% delivering overall revenue growth of 7.1% and in turn a 60% increase in PBT to £0.7m. Over the past few years, Touchstar has focused on enhancing the returns from their product offering through a shift towards recurring software licen

It’s not what you sell, it’s the way that you sell it

This report is intended to help UK small- and mid-cap investors gain a better understanding of software companies’ routes to market, and to highlight how one of the most important facets of the way in which they grow and deliver value is routinely ignored.  We examine sales processes for six UK-listed companies and one that has recently been taken over, and consider why they have followed their respective paths.

LIBERUM: Cirata plc: Cirata from the flames

Engage XR Holdings - Expanding from FY23, FY24E forecasts reiterated

ENGAGE XR’s FY23 results show revenue and net cash in line with the February trading update, EBITDA ahead at -€4.0m vs -€4.5m due to the split of cash outflow between opex and working capital, and a confident outlook that leads us to reiterate our FY24E forecasts. FY23 revenue for the core ENGAGE platform was unchanged vs FY22 at €3.3m, as H2 23 revenue was impacted by the record seven-figure contract announced in February shifting to 2024, and several enterprise customers scaling back renewals