Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Brady. We currently have 34 research reports from 4 professional analysts.
We have revisited our forecasts post last week’s full year results, which were disappointing but suggested that there is now a more stable platform in place for future growth. We have made no changes to our FY 2018 revenue and EBITDA expectations, but reduced our PBT/EPS estimates to reflect reduced D&A following the disposal of the Recycling business. We have also introduced a new set of FY 2019 forecasts, which reflect 3% revenue growth and a 16% EBITDA margin pre SBP. This business has strong IP, a blue chip customer base, healthy recurring revenues (66%) and a solid balance sheet. However, we need evidence of accelerating growth before we move to a more positive stance. We maintain our Hold recommendation and 56p target price.
accesso Technology (ACSO LN) Mixed performances but strong overall result | Anpario (ANP LN) Modest forecast changes; remain at Hold | Brady (BRY LN) New FY19 estimates introduced, no change to Hold rec or 56p TP | Carador Income Fund (CIFU LN) Record start for CLO new issuance | Centaur Media (CAU LN) Profits and cash ahead | Future (FUTR LN) Adding more depth | Microsaic Systems (MSYS LN) Contract with CPI Innovation Services Ltd | Vectura Group (VEC LN) FY2017 results in line, highlighting new generics strategy | Verona Pharma (VRP LN) Imminent Phase IIb data in COPD | Xaar (XAR LN) 2017 results in line, transformation continues
Companies: ACSO ANP BRY CIFU CAU FUTR MSYS VEC VRP XAR
Brady (BRY LN) Full year results in line with downgraded expectations | Brooks Macdonald Group (BRK LN) Underlying progress, but alongside an increase in legacy provision | Burford Capital (BUR LN) Argentina case sold for $107m cash, $94m profit | Futura Medical (FUM LN) Supportive PK data for MED2002 | Goals Soccer Centres (GOAL LN) Positive underlying momentum temporarily derailed by snow hit | Gresham Technologies (GHT LN) Clareti-growth driving strong performance | PROACTIS Holdings (PHD LN) Result of Hubwoo tender offer and new customer win announcement | PureTech (PRTC LN) Proposed placing to raise $100m to advance pipeline | Renold (RNO LN) Lag in passing on higher input prices | Restore (RST LN) Organic and acquisitive growth story continues | Surgical Innovations Group (SUN LN) Prelims as expected, outlook positive | Zotefoams (ZTF LN) A year of significant strategic progress
Companies: BRY BRK BUR FUM GOAL GHT PHD PRTC RNO RST SUN ZTF
Brady is selling its US-based recycling business for an initial c £3.3m with c £1m balance in 18 months. The disposal will simplify the group, boost cash resources towards £8m and enable management to focus on its core physical trading commodity and energy businesses. Additionally, the company has said that FY17 revenues will be c £2m lower than consensus at £27m due to a faster-than-anticipated switch to the recurring revenue model and two projects slipping into H118. We have cut our FY18 forecasts for the disposal and the lower trading guidance. Nevertheless, if management can successfully transition the business to the cloud, there is a lot to go for as E/CTRM is an attractive growth industry and Brady has a very high quality customer base.
Accesso Technology (ACSO LN) Full year EBITDA substantially ahead of expectations | Brady (BRY LN) Full year results below expectations, disposal of Recycling business | Brewin Dolphin Holdings (BRW LN) 5% core FuM growth in Q1, in line at this early stage | Ergomed (ERGO LN) FY trading update: strong top-line growth & order book expansion | Findel (FDL LN) Strong online trading and FS performance, positive outlook | Frontier Smart Technologies Group (FST LN) Strong 2017, preparing for more to come | Itaconix (ITX LN) Licence for use of non-core polymers in construction sealants | MySale Group (MYSL LN) Growth accelerating, with forecast risk clearly to the upside | NCC Group (NCC LN) Recovery largely priced in already | Renishaw (RSW LN) Strong growth, but a little lighter than we expected | Restaurant Group (RTN LN) In line FY17 outcome | StatPro Group (SOG LN) Full year results in line, Revolution ARR growth accelerating |
Companies: ACSO BRY BRW ERGO FDL FST ITX MYSL NCC RSW RTN SOG
Brady has released an update indicating that FY 2017 results will be below market expectations and announcing the disposal of its Recycling business for £4.6m max in cash. The results outturn is due to the replacement of one-off licence renewals with recurring annual licences and the slippage of revenue from two contracts into H1 2018. We have reduced our FY 2017 revenue and EBITDA estimates by c8% and c70%, reflecting the indications given in the update. Our FY 2018 revenue and EBITDA estimates are reduced by 23% and 45% respectively, or by 9% and 28% excluding the impact of the disposal. While we continue to admire the company’s strategy, market positioning, portfolio of software services, recurring revenues and balance sheet, we move to a Hold pending clear evidence of accelerating organic growth. We reduce our target price to 56p.
Hydrominer GmbH, An Austrian cryptocurrency miner, is considering an initial public offering (IPO) on the London Stock Exchange AIM during 2018 according to an article on Bloomberg. Block Energy—a NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
Companies: GTC BRY ERGO HAYD QXT INFA REDS MYSL ACSO SRC
Clean Invest Africa—Introduction due around 14 Nov. Vehicle established to identify investment opportunities and acquisitions in renewable and clean energy projects/companies or alternative technologies that are used in a socially and environmentally responsible way that will aid the development of the African continent. City Pub Group - owner and operator of an estate of 34 premium pubs across Southern England. £30m raise. Consistent track record of strong revenue and EBITDA growth, with a three year CAGR from FY14 to FY16 of 34.9% and 44.8% respectively, and an EBITDA margin of 14.7% in FY16. Due late Nov. Offer TBA. Boku - Independent direct carrier billing company. Revenues were up 21% to US$10.2 in HYJun17. Q32017, revenues grew to $6.5m, up by 44%. The Company also saw continued growth across all of its key metrics: user numbers, total payment and a positive adjusted EBITDA for the month of September 2017. Due 20 Nov. Offer TBA. Ten Lifestyle Hldgs. Technology-enabled lifestyle and travel platform providing trusted concierge services to the world's wealthy. Net revenue increased from £20m in the year ended 31 August 2015 to £33m in the year ended 31 August 2017, a compound annual growth rate of 29%. Offer and date TBA. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m. OG Graphite, brownfield development-stage graphite company focused on the reactivation of its wholly-owned Kearney natural flake graphite mine and mill located 280 km north of Toronto, Canada. Offer TBA, expected mid November. Shefa Yamin minerals company focused on the exploration for precious stones in Northern Israel. Net Proceeds will be used to advance the Company's mining project. Offer TBA. Bakkavor—After being postponed on 3 November the provider of fresh prepared food has today set its offer price at 180p. Primary raise of £100m plus vendor sale in combination totalling 25% of enlarged capital. Mkt Cap c.£1bn. FY 16 Revenue: £1,763.6 million. FY 16 Adjusted EBITDA2: £146.4 million . Aviva Investors Secure Income REIT - Targeting £200m raise. Will invest in a diversified portfolio of high quality, long-lease commercial real estate assets located within the UK and leased to predominantly investment grade tenants. Due Dec. Cabot Credit Management -one of the largest credit management services providers in Europe and the market leader in the UK and Ireland with total 120-Month ERC of £2.2bn. Raising c.£195m. Offer TBA. Due November. M7 Multi-Let REIT—Intends to raise up to £300m at 100p. Aims to acquire and hold a portfolio of UK regional light industrial and regional office assets diversified by geography, asset type and tenants that is expected to generate stable income returns and, where appropriate, offer the potential to leverage and enhance returns through active asset management initiatives. Due 30 Nov. En+, international vertically integrated aluminium and power producer with core assets located in Russia. Priced at $14 per GDR. $1.5bn offer of which $0.5bn primary to pay down debt. Dual listing in Moscow. Unconditional dealings 8 Nov.
Companies: REAT GPX MCC APPS BOIL CGH MBO IOG IQE BRY
Brady’s H1 results reveal the initial impact of the group’s transformation. While revenues slipped, reflecting the planned shift to software rental, recurring revenue rose to 68% of total revenues, up from 60% a year earlier. The move into microservices is gaining traction, with three proof of concept trials taking place in H2. Four new licences were sold in H1, all on a rental format, of which three are hosted. With nearly four months remaining in FY17, the group has 93% of revenue in the bag, including several software renewals and services business. Given the attractive long-term growth opportunities in the E/CTRM space, we believe the shares look attractive on 14x our maintained cash-adjusted FY19 EPS.
While the H1 revenue decline (-11% to £13.2m) and EBITDA loss (-£0.9m) reflects the impact of organisational restructuring and the transition to a recurring revenue model, there are many positives to take from this set of results. Four new deals totalling £3.2m were signed on a recurring revenue basis, recurring revenue has grown to 68% of the sales mix (vs 60% in H1 2016) and proof of concept trials for microservices have been secured for H2. Management expects full year results to be in line with market expectations, hence we make no changes to our forecasts, recommendation and target price. We continue to view the current valuation (FY 2018 EV/EBITDA of 8.6x, falling to 5.3x for FY 2019) as highly attractive given the potential for accelerating revenue growth, significant margin enhancement and improvement in quality of earnings.
We have revised our forecasts following the newsflow over the last few months. While management has completed its strategic review, the transitioning process is continuing. The group has switched from operating on a divisional basis to global functions. The development team has been unified, and development work has shifted from platforms to ‘microservices’, so that new products can be leveraged across the group. Further, Brady is evolving to a recurring revenue model. We have cut our FY17 forecasts to reflect the current transitioning but forecast revenue and margins to improve significantly thereafter. Given the long-term growth opportunities, notably in agriculture, natural gas and power, we believe the shares look attractive on 14x our cash-adjusted FY19 EPS.
Brady (BRY LN) Building a platform for superior growth and margin | Devro (DVO LN) We see 3 key sentiment drivers for FY17 | EMIS Group (EMIS LN) In line prelims, investment in patient a short term drag | M&C Saatchi (SAA LN) 9.3% LFL revenue growth, 3% profit beat, dividend +15% | Northgate (NTG LN) Strategy refresh expected in June | Oxford BioMedica (OXB LN) Full year results; anticipate CTL019 launch later this year
Companies: SAA NTG OXB EMIS DVO BRY
Global Energy Development (GED.L) — To be renamed Nautilus Marine Services. Schedule 1 from developer and seller of hydrocarbons and related products. Reverse takeover. Raising $10.5m via a convertible. Expected 9 Feb. Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise. Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January.
Companies: 7DIG EHG FFX BRY EVG LTG DOTD MGR VLS NGR
In a brief trading update, Brady says that trading is in line with market expectations. FY16 saw of a lot of internal change, with a new chairman and COO while the CEO left the group. While commodity markets have seen some improvements, the backdrop remains challenging. The main focus over the last few months has been on improving efficiencies, including a shift away from the old divisions to global functions. We make no major changes to our forecasts and, given the strong balance sheet and scope for recovery, continue to believe the shares look attractive, trading on c 18x our cash-adjusted FY17e earnings.
BILLING SERVICES GROUP (BILL LN) | BRADY (BRY LN) | EKF DIAGNOSTICS HOLDINGS PLC (EKF LN) | GABLE HOLDINGS INC (GAH LN) | GATTACA PLC (MTEC LN) | REAL GOOD FOOD PLC (RGD LN) | RESTORE PLC (RST LN) | AFESTAY PLC (SSTY LN) | XCITE ENERGY LTD (XEL LN)
Companies: XEL BRY BILL GATC GAH EKF RST RGD SSTY GAN
Research Tree provides access to ongoing research coverage, media content and regulatory news on Brady. We currently have 34 research reports from 4 professional analysts.
|13Mar18 07:00||RNS||Preliminary Results|
|28Feb18 07:00||RNS||Notice of Results|
|25Jan18 07:00||RNS||Trading Statement|
|15Jan18 14:33||RNS||TR-1: Notification of major holdings|
|12Jan18 14:54||RNS||TR-1: Notification of major holdings|
|16Nov17 09:21||RNS||TR-1: Notification of major holdings|
|17Oct17 15:28||RNS||TR-1: Notification of major holdings|
IQE has released its results for the year to December ’17. While the results themselves are strong, these were largely flagged at the trading update in December, and we see the FY’18 and FY’19 outlook as more important for the share price from here. The group expects continued growth in wafer sales, driven by both the expansion of existing business and qualifications of new business streams. Given the group’s strong operational gearing, we expect this to lead to a steady expansion in group margins. The group has given explicit forward guidance for the first time, which is in-line with our FY’18 revenue and EBIT forecasts, although a higher non-cash tax charge is likely to lead to EPS downgrades. With further high growth expected in FY’18 and the potential for more strong growth in FY’19 and beyond, we retain our positive stance.
CALL’s solid FY’17 results continue to underpin our conviction. Growth continues at pace in all regions assisted by rising internal efficiency while the outlook statement points to management confidence, good momentum on product development and support from regulatory trends. While we have cut our FY’18E numbers on accelerated investment in growth (and FY19-20E on lower R&D credits – see detail inside), we view management’s FY19E aspiration of ~break-even and cash trough as intact, with tangible upside risk from further M&A by Bullhorn and improving ARPU from new products launches in the mid-term. We reiterate our Buy rating and retain our PT of 300p.
Companies: Cloudcall Group
As the quarter ends and Easter approaches, the results marathon is set to pause. As highlighted previously, the vast majority of results have been as anticipated, with some notable exceptions. The state of the UK economy is improving according to the Chancellor. The MPC meeting on Thursday is likely to leave interest rates unchanged but an increase in May seems likely, even though inflation is set to fall over the next 12 months. We have continued to see significant M&A activity. In Share News & Views, we comment on Braemar Shipping*, Burford, CLS, ECSC*, FDM*, GetBusy* and XLMedia.
Companies: APC BMS CRPR EUSP FDM GETB PCF SNX SPRP TCN W7L
accesso has released full year results in line with the indications given in the 25 January trading update, which highlighted a small revenue beat and an adjusted EBITDA performance substantially ahead of expectations. Full year revenue increased 30% to $133.4m, delivering adjusted EBITDA up 29% to $24.6m – 8% ahead of our estimate. While the group result was ahead of expectations, we suspect that the positive impact of strong Ticketing volumes was offset by lower than expected Queuing revenues. Both acquisitions made positive contributions, with an impressive early performance from TE2 highlighting the attractions of its personalisation capabilities to multiple verticals. We need to review our forecasts and target price in detail, but anticipate putting through a 5-10% upgrade to our revenue and earnings estimates.
Companies: Accesso Technology Group
Sopheon has delivered a very strong 2017 – in line with the previous trading updates, and benefiting from a very good end to the year. The group is ahead of our estimates on all metrics, and is well placed going into 2018 and beyond. Management have signalled their confidence with the welcome introduction of a maiden dividend (2.5p). We upgrade our estimates for both 2018 and 2019.
Strong momentum continues, with a checklist of positive catalysts into FY18 and FY19: repeat outperformance; reinstated forecasts, having been upgraded since being suspended at the time of the trading update in December; product excellence leading to global large enterprise adoption; regular product updates and functionality improvements to keep existing customers enthused and potential customers even more interested; a focus on distribution partners to further boost sales; and the financial strength and confidence in balance sheet to accelerate inward investment – while also instating a maiden dividend, showing a commitment to cash management, shareholder returns, and the broadening the potential investor base. Having delivered 23% organic revenue growth, and 53% EBITDA growth, management has taken the decision to invest for growth, accelerating the expansion of sales and marketing and R&D in order to create the platform to deliver accelerating growth. The stars are aligned and visibility is at record levels, with 62% of FY18 revenue (FY17: 51%) already contracted: we lift our 12-month target to 1000p (620p), Sopheon having shown the evolved maturity to merit a fuller enterprise software multiple of a target 17x FY18 EBITDA.
StatPro has reported FY 2017 revenues and Adjusted EBITDA in line with expectations reflecting solid growth from Revolution and a positive EBITDA contribution from Delta. Reported revenue increased by 26% at constant currency rates (CCR), adjusted EBITDA was up 24% while adjusted EPS grew by 74%. The dividend is maintained at 2.9p. Group Annualised Recurring Revenue (ARR) increased by 35% to £53.04 million. The acquisition of UBS Delta in April 2017 was a key feature of the year and its integration into Revolution continues. The announcement flags a restructuring of the business in 2019 into three divisions to allow management focus on the specific growth opportunities in the business lines. CEO Justin Wheatley says that StatPro ended 2017 strongly and that the Group expects to see further organic revenue and profit growth in 2018. StatPro has started the current financial year in line with management expectations. We make minor adjustments to our FY 2018E estimates and introduce FY 2019E numbers.
Companies: Statpro Group
GetBusy’s maiden results published today were robust, coming in ahead of our forecast at both the revenue and pre-tax level; despite the impact of IFRS 15. Recurring revenue increased to 86% of revenue (83% in 2016) and the number of paying users increased to 57,000 (+11% YoY). Non-UK business, which accounted for a mere 6% of group revenue in 2015, increased to 45% in 2017. We have updated our forecasts for GetBusy and upgraded our Target Price to 48p/ share, +17% higher than our prior 41p TP. We reiterate our Buy rating.
WANdisco’s co-sell agreement with Microsoft is possibly the company’s most important partnership to date, strengthening the company’s already enviable platform to capitalise on the rapid growth in cloud and hybrid cloud computing. Agreements with IBM, Alibaba, Dell/Virtustream and now Microsoft give a clear indication of the capability and uniqueness of Fusion. Near- and long-term prospects are reinforced as is the potential for WANdisco to grow into and exceed the current rating.
IQE is a leading global supplier of advanced semiconductor wafers that are used in various applications ranging from mobile communications to industrial power. The company boasts a diversified global customer base and a unique IP portfolio with over 150 patents that enables the firm to provide a unique service to its customers. Headquartered in Cardiff, Wales, IQE shares were often misunderstood or underappreciated by investors in the past. However, as the company continued to deliver healthy growth winning volume contracts for new technologies (e.g. VCSEL), the share price nearly tripled in 2017 and the company successfully placed new shares raising £95m in November. Recent reports published by funds with short positions questioning IQE’s accounting with regard to profit and cash flow contribution from its joint ventures sent the stock price down by 45% from its November high. That said, the company rejected the allegation with the statement saying that the information in the short sellers report is “either factually inaccurate or has previously been disclosed in IQE’s annual reports and financial statements”. The company also appointed KPMG as a new auditor replacing PwC as of 12th February saying “the company holds itself to the highest standards of transparency, governance and integrity”. We find the management responses were timely and expect the share price to be stabilised going forward.
The phenomenal take-up of cloud services is turning the IT industry on its head. Here corporate networks and in-house data centres are being replaced by third-party hosted (eg Amazon, Google and Microsoft) services, streamed from almost anywhere on the planet.
Companies: Blancco Technology Group
In today’s more detailed trading update, Sopheon has confirmed its brief statement in early January that revenue and profit for FY 2017E will exceed market expectations. As well as providing an anticipated revenue figure above U$28 million, it states that both EBITDA and pretax profits will be ‘significantly ahead of current market expectations.’ Today’s update notes that volume of transactions increased with a greater number of license deals and new SaaS customers – and Q4 contained two substantial deals. Sopheon ended 2017 with net cash of U$9.5 million. The group has a higher recurring revenue base and greater revenue visibility overall. We adjust FY 2017E numbers to reflect the guidance given today, driving a 31% increase in our Adjusted EBITDA estimate to U$6.9 million. We also adjust estimates for December’s conversion of loan stock and that is the only influence on our estimates for subsequent years where we retain a conservative stance and note future investment in the Accolade platform. We will look to revisit those estimates when further detail is available at the time of the results announcement.
In the March 2018 edition of the Hardman Monthly Newsletter, Nigel Hawkins addresses the attractions of quoted infrastructure funds that maintain a low profile.
Companies: OPM ABZA AVO AGY APH ARBB AVCT BNO BUR CMH CLIG COS DNL EVG GTLY GDR INL MCL MUR NSF OBT OXB PPH NIPT PHP RE/ REDX SCLP SCE SIXH TRX TON VAL
Momentum has continued in H2, such that the company now expects FY18E sales and EBITDA (of at least) $28.0m (prev: $26.0m) and $2.3m (prev: $2.0m), implying impressive y-o-y growth of 70% and 31% respectively. In view of this update, we upgrade our FY18 forecasts (sales: +8%, EBITDA: +16%) but make n/c to FY19E. Having said this, given our forecasts now imply just 14% sales growth in FY19, we believe there is a strong likelihood of future upgrades. ZOO remains one to watch.
Companies: Zoo Digital Group
Pharmaceutical Services is a vast and varied landscape, reflecting the complexities in the discovery, development, manufacturing and monitoring of drugs and devices, all within a stringent regulatory environment. The overall growth prospects are highly favourable: drug development activity globally is on the up, led by smaller companies, which is driving demand for outsourced services. In this report we provide a breakdown of the sector into its main activity segments, and identify biologics, increasing service specialisation and consolidation as important value drivers. Finally, we present 15 companies (9 of which are publicly listed) that, in our view, are well placed to benefit from the sector’s secular growth trends.
Companies: ABZA BQE CSRT OXB INS UDG CLIN ABZA HZD ERGO