Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Eckoh. We currently have 55 research reports from 5 professional analysts.
Eckoh’s interim results showed strong progression year on year across all key metrics driven by continued strong momentum in its US Secure Payments business. The group won another 7 contracts in this area worth $5.1m, both metrics significantly up y-o-y. With all contracts won on the preferred opex-style pricing model, the order book and visibility is also growing. We made no changes to our forecasts and believe the opportunities remain significant given the regulatory backdrop, increasing awareness of the risk and costs associated with security breaches and the group’s strong competitive positioning. We see another year of strong progress.
Eckoh has secured 2 new, 20-year US patents for its secure payment solution CallGuard. This IP protection is strategically important in preserving and helping grow value in the business, particularly in the US where it has won over $13m of payment contracts in the last 18 months and where opportunities remain significant. These awards confirm that the group remains at the forefront of contact centre security, an area we expect to see increased spending over the coming years. We remain bullish on Eckoh’s ability to capitalise on this opportunity and the resultant value creation.
WANdisco plc (WAND.L, 862p/£325m) Capital Markets Event: Replication and restore driving demand (17.10.17) | Eckoh plc (ECK.L, 50.5p/£127.2m) Interim pre-close: Inline - US growth (18.10.17) | Audioboom plc (BOOM.L, 3.125p/£29.1m) Podcast market update: Continued market investment (20.10.17) |
Companies: WAND ECK BOOM
Eckoh issued an in-line trading update for the six months to 30 Sept 2017, reporting double digit percentage growth in both revenue and gross profit. Of particular note is the continued strong momentum of the US secure payments business, winning 7 contracts in the period with a total contract value of $5.1m (nearly double the value won in H1’17). All 7 contracts were won on the preferred “opex” pricing model and means the group has now secured the same volume of opex-based contracts in H1’18 as were won in the whole of last year. The group’s growth prospects remain exciting given positive demand drivers, a strong product set and competitive positioning.
Be Heard (BHRD LN) agenda21 appointed lead digital agency by Addison Lee | Eckoh (ECK LN) US secure payments continue strong momentum | Rathbone Brothers (RAT LN) FuM +2.5% in Q3, Investment Management net inflows remain modest
Companies: ECK BHRD RAT
Audioboom plc (BOOM.L, 2.2p/£20.5m) Podcaster subscription service | Eckoh plc (ECK.L, 47.3p/£115m) CME: US focus | Gfinity plc (GFIN.L, 19.75p/£37.3m) Further partner agreement with Microsoft | Big Sofa plc (BST.L, 25.75p/£14.6m) Prelims: Progress in 2017
Companies: BOOM ECK GFIN BST
Eckoh held a teach-in on its US business yesterday, which also gave us the opportunity to meet the US management team. The event depicted a buoyant demand background in the US and it’s clear that Eckoh’s opportunities are significant. There appears to be a positive change in demand appetite and there remains little competition in the space. The group’s patents, implementation experience and presence on the ground provide areas of differentiation and barriers to entry. All of this is feeding into what looks to be a very healthy US pipeline, no doubt helped by the recent successful deployments in some very large enterprises (Fortune 50 US insurance company, Fortune 500 US financial services) which provide strong references. Outside of the secure payments space, the group also talked about some of its significant opportunities with a browser-based agent desktop tool, Coral. We are excited about the group’s growth prospects, which combined with very high levels of recurring revenues (76% of total revenues in year to Mar’17) make the shares highly attractive.
Gfinity plc (GFIN.L, 19.75p/£37.7m) IKON partnership takes Elite global | MTI Wireless Edge plc (MWE.L, 25.25p/£12.8m) Mottech expansion into China via JV | Eckoh (ECK.L, 47.5p/£115.4m) FY results
Companies: GFIN MWE ECK
The group delivered FY results comfortably against expectations, with a transformational US performance. The total value of Secure Payments contracts won in the US was more than 5x the previous year, with only 21% recognised in FY’17. There are strong positive demand drivers in the US and with one of the leading propositions in the market, Eckoh will be well-placed to capitalise. The UK remains solid, with the Capita and other emerging partnerships contributing. Retention rates remain very high and with overall recurring revenues at 76% (and improving), we believe Eckoh offers exciting and visible growth opportunities.
Payment provider's revenue rose 20% thanks to a major $4m contract and impressive US growth
In our third edition of Trend spotting we stick with our suggestion at the end of March to up European exposure and we review the recent market moves and macro trends. We comment on the recent strong performance of our growth, quality and momentum styles which we expect to continue and we examine what happened to sectors around the last general election period in 2015, adding some new colour.
Companies: AUG GNS IQE NTG SDL SPH SDY TRI VEC XAR GHT BOY CRW EMIS VCT ECK GLE GHH DATA AVON CHH DPH HILS SDM ZYT MUR RPS LWB EKF SUN UDG SYNT CINE DOTD MPM FUM CLIN RENE ATQT SERV ERGO BCA BUR DRV SCS JUP FDP GBG GTLY HW/ EAH SFR PHD CXENSE KNOS NETD G4M GFIN ULS RHL RAT FEN LOOP MYSL FUTR
We have reviewed the performance of our consistent growth screen since the previous refresh on 27 September 2016 and revamped the selection parameters to focus more on forecast sales and EPS growth going forward. In the period under review the consistent growth style screen outperformed the small-cap benchmark by c. 6% and underperformed the microcap index by a similar amount. Interestingly, although growth doesn’t always seem to be defensive as might be expected, however it appears right to buy growth on dips caused by or coincident with wider market volatility. In the new forecast growth screen we take a close look at 10 focus stocks. We will monitor performance and refresh it in three to four months time.
Companies: ECK SDM DOTD ERGO HW/ EAH PHD FEN LOOP
Applied Graphene Materials (AGM LN) Board and operational appointments | Centaur Media (CAU LN) Trading update provides reassurance | Clinigen Group (CLIN LN) In line H1 update | Eckoh (ECK LN) Significant contract win via Capita partnership | Restaurant Group (RTN LN) Mixed YE update with further downgrades | StatPro Group (SOG LN) Full year revenue and profits in line
Companies: CAU ECK RTN AGM CLIN SOG
Eckoh delivered interims in-line with expectations. UK growth was 11% whilst the US, reflecting a full period for PSS now accounts for 30% of sales. US Secure Payments wins gathered pace, with much larger contracts being won on SaaS-style pricing models and the pipeline at record levels. With contracts won in the first half feeding through strongly into the second half and given the group’s high level of recurring revenues (76%), the outlook remains positive for the rest of the year and we make no changes to forecasts. Eckoh has exceptional growth opportunities, particularly in the US, and we believe it can convert this to strong shareholder value.
Bagir Group (BAGR LN) Successful delivery of 1st Ethiopian orders | easyHotel (EZH LN) Reassuring finals & tenor | Eckoh (ECK LN) In line interims, US secure payments gathers pace | Ergomed (ERGO LN) PharmInvent acquisition complements PrimeVigilance | Gooch & Housego (GHH LN) Good FY16 growth, forecast to increase in FY17 | ITE Group (ITE LN) No change in trading conditions | MySale Group (MYSL LN) Positive start to year drives upgrades | Oxford BioMedica (OXB LN) Strategic alliance with Orchard Therapeutics | Vp (VP/ LN) Excellent interims, outperforming again
Companies: ITE OXB VP/ ECK GHH BAGR MYSL ERGO EZH
Research Tree provides access to ongoing research coverage, media content and regulatory news on Eckoh. We currently have 55 research reports from 5 professional analysts.
|14Dec17 08:30||RNS||Directorate Change|
|04Dec17 07:00||RNS||Director, PDMR and Eckoh PLC & EBT Share Dealings|
|30Nov17 07:00||RNS||Directorate Change|
|24Nov17 07:00||RNS||Grant of Awards under new PSP|
|22Nov17 07:00||RNS||Half-year Report|
|18Oct17 07:00||RNS||Trading Update|
|16Oct17 14:42||RNS||Result of General Meeting|
Apple announced yesterday that US optical components manufacturer Finisar (NASDAQ: FNSR) will receive $390m from its Advanced Manufacturing Fund. The award will be used to increase Finisar’s R&D spending and high-volume production of VCSELs. We had always expected Apple to dual source VCSEL components when possible, so we see the fundamental IQE investment case as unchanged on the back of the investment, however we are highly encouraged by the accompanying commentary on Apple’s Q4’17 VCSEL volumes. We believe that IQE is the only volume source of VCSEL wafers currently available. IQE was one of our key picks for 2017 and has served us well (+325%). With a recently strengthened balance sheet and further positive newsflow expected, we remain highly positive on the stock and retain our Buy recommendation.
On the back of the recent extremely positive newsflow, the group has raised an additional A$61m from equity to accelerate the development of the technology product and platform, expand global infrastructure and provide working capital headroom. Crucially, the contract award from a second OEM demonstrated that Seeing Machines (SM) has a credible DMS solution for the global automotive industry and is likely to win a significant share of a huge global market. Equity investors are now beginning to appreciate the scale of the opportunity and the true value of this business. To date, enthusiasm and valuation have been tempered by a relatively heavy investment programme for AIM and an obvious funding gap with likely dilution. We adjust our forecasts to reflect the post-placing investment; however, it clears that final hurdle and opens a path for SM to achieve its remarkable potential. We also highlight upside from a potential re-rating.
Companies: Seeing Machines
Since April, our growth style screen has performed very strongly, outperforming the main small-cap index by 20pp and 24pp on an unweighted and weighted basis respectively, also comfortably outpacing microcap. In this note we provide more detail on the constituent and basket performance in the period and present the new screen constituents. As usual we focus on 10 of the current constituents, providing brief summaries and financials for clients to consider. We will refresh again in 5-6 months time and report back on performance.
Companies: SUN DOTD ERGO TEF AVG SOG COR FEN LOOP YU/
SDL’s trading update confirmed that whilst its sales pipeline is in line with expectations, it remains reliant on the closure of certain software deals by year end without which 2017 adjusted EBITA will be below expectations. In addition, the greater automation in the business is allowing the group to reduce the cost base in 2017 (£3.5m exceptional costs) but the group will reinvest the savings in 2018 in premium solutions in fast growing verticals in order to maximise its opportunity. The net result is an underlying downgrade of 18%/23%/20% in 2017/18/19 in adjusted EBITA on a like for like basis. The group is now required to capitalise a small proportion of its R&D spend so the adjustments to forecasts are 7%/10%/13% if we include the benefit of capitalisation. Whilst these downgrades are disappointing, we believe the technology investments the group is making will lead to a highly optimised platform that will be industry- leading in what is a multi-billion dollar market. The group reiterated its commitment to deliver double digit revenue growth and mid to high teens margins over the medium to long term.
Idox has identified a small number of revenue items which it does not consider should be recognised in 2017 and now expect 2017 EBITDA to be c. £20m vs. the c. £23m it indicated at the time of its trading update in mid-November. These issues were identified internally and brought to the attention of its auditors by the company. This is clearly disappointing and we put our forecasts under review awaiting further details. The Board also announces that Andrew Riley is on sick leave due to illness and former CEO Richard Kellett-Clarke, has agreed to stand in as Interim CEO pending Andrew’s return. The group will need to rebuild investor confidence but we believe Idox has a valuable portfolio of products and services and a broad customer base generating good levels of recurring/repeating revenues. FY results are now expected to be announced in February 2018.
In the October edition of the Hardman Monthly newsletter, Chief Executive, Keith Hiscock analyses the much misunderstood – but highly important – issue of stock liquidity. In particular, he focuses on the lower echelons of the Main Market and of AIM.
Companies: OPM ABZA AVO AGY APH ARBB AVCT BUR CMH CLIG COS DNL EVG GTLY MCL MUR NSF OBT ODX OXB NIPT PHP PURP RE/ RGD SCLP SPH SCE TRX VAL
This quarter we use finnCap’s Slide Rule to provide both top-down and bottom-up analysis of the UK’s Technology and Telecoms sectors. Our findings are very reassuring: the Tech sector scores the best (across all sectors) when considering Growth and Quality – Taptica*, Frontier Developments* and dotDigital* in particular stand out on these metrics. Given these attractive characteristics and growth prospects, the Tech sector is unsurprisingly one of the most expensive – currently trading at 17.2x FY1 EV/EBIT and 23.8x FY1 P/E, versus 15.0x and 18.5x respectively for the wider market. Despite valuations appearing high, we believe there are value opportunities. For example, Proactis* features in finnCap’s QVGM+ portfolio (ranked 17/462) – the company offers attractive organic and inorganic growth, with earnings forecast to grow by 26% CAGR over the next two years, but despite this, only trades on 15x FY1 earnings and offers 8% FCF yield in FY2.
Companies: 7DIG ALT AMO ARTA BOTB BLTG CTP CFHL CYAN ISL DTC DOTD ELCO ESV FDEV GBG IDEA IDOX IMTK IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET ONEV PHD QTX QXT RCN 932 SSY SEE SIM SPE SRT STR TAP TAX TEP TPOP TRAK UNG VIP ZOO
PRSM has released a trading update this morning and the strong momentum of H1 has actually increased. We are upgrading our revenue forecasts substantially and we are increasing our PT to 1750p from 1250p.
Companies: Blue Prism Group
RhythmOne has announced H1 revenues of $114.5M (H12017: $66.8M), up 72% year-on-year, slightly ahead of the range given in the trading statement of $112-114m. Adjusted EBITDA of $3.1M, an improvement of $5.7M (H12017: $2.6M Loss), is ahead of the $1.5-2m range given in the recent trading statement. RhythmOne on-platform revenues of $44.4M (H12017: $35.5M), were up 25% year-on-year. The company closed the period with $39.3M in cash. We are reducing our revenue forecasts to reflect the decline in non platform programmatic revenues, and our EBITDA to reflect slower cost turnaround at RadiumOne, and we now expect a small loss at RadiumOne vs small profit in year to March 2018. We retain our Buy and PT770p.
RhythmOne has delivered a better result at the revenue, EBITDA and cash levels than indicated at the last trading update. This is encouraging given trading appeared slightly below our expectations. The core business is trading well with RhythmMax growing very fast (+25%). Perk also traded well (ahead) and the first two months of Q3 have been good and now there is just the largest month of the year to go. The only fly in the ointment is RadiumOne where the costs program is slightly behind. This means a c$2m hit to FY18 EBITDA estimates, reducing it to c$14m. However from a big picture perspective the step change in profitability this year is still on track and the Company is happy that RadiumOne will be on plan in FY19 meaning that our FY19 EBITDA expectation should hold up. With the drift on the share price this makes the valuation look obscenely low. The Company indicates that the YUME acquisition remains on track to close in Q1 2018, although we note this is not key to getting an attractive return on the stock. We maintain our Buy rating.
First Derivatives has announced that it has acquired Telconomics, a Madrid-based provider of telco analytics software, for a total consideration of up to €2.5m. This looks a sensible bolt-on acquisition that brings valuable domain expertise and complementary product in a target vertical. We have made no changes to our current year expectations, but increase FY 2019E revenue/EBITDA by £0.9m/£0.25m and FY 2020E revenue/EBITDA by £1.0m/£0.3m. This delivers EPS enhancement of c1% in both years and increases our target price from 4190p to 4222p.
Companies: First Derivatives
SQS has reached agreement on a recommended cash offer at 825 per share, which values the company at c£281m (c1.0x FY2017E sales and c10x FY2017E EBITDA). Indications of acceptance have been provided by 66% of the shareholder base. The acquirer is a bidco set up by Assystem Technologies, a European leader in outsourced research and development. The combined group will provide its customers with more automated processes to boost operational efficiency, meet evolving regulatory standards and remain competitive. We believe this is a sensible combination that leverages the two companies’ respective development strengths.
Companies: SQS Software Quality Systems
accesso unveiled a solid H1 last week, with 40 new customer wins across the group delivering 17% (10% organic est.) growth in revenue. Challenging weather conditions did limit accesso LoQueue revenue growth to an estimated 5%, but this was in line with our relatively cautious expectations ahead of the key (weather-influenced) summer trading period. Now that this period has been successfully exited, we have revisited forecasts and valuation. While we make no changes to our headline revenue and profit estimates, we do increase current year EPS to reflect a lower effective tax rate (20% vs 23%). The major driver to our target price increasing from 1747p to 2151p is the roll-forward of our base valuation year to reflect a full year contribution from the Ingresso and TE2 acquisitions. This increase, together with the expectation of improving earnings momentum, drives our upgrade from Hold to Buy.
Companies: Accesso Technology Group
Bango has announced what is, in our view, a significant new payment route in Nigeria, giving 9mobile’s 17.2m subscribers the ability to charge purchases of digital content from the Google Play store to their 9mobile 9pay mobile wallet. The release follows the recent announcement with Victory Link in Egypt, but contains no details on the contract terms and we make no revisions to forecasts at this stage. With a growing mobile subscriber base, high Android penetration and low banking/credit card adoption, we continue to believe that Africa represents an attractive growth opportunity.
The AIM Healthcare index has shown positive returns in all but three out of the past 11 years (2007, 2008 and 2011), growing at a CAGR of 7.6% over the period. This compares with a CAGR of -0.3% for the broader FT AIM All Share, +0.6% for the AIM 100 and +3.5% for its more senior FT All Share Health index. Sector growth and relative performance to the AIM All Share index has accelerated over the past five years; the sector having risen 19.19% CAGR since 1 Jan 2012. This compares with 6.8% growth in the AIM All Share and 6.1% in the FT All Share. This outperformance can be attributed to the increasing success amongst the Healthcare constituents which have progressed their business plans to a point where substantial value has been/is being created and where many companies have successfully scaled their businesses to sustain future growth. We highlight four companies that have different business models but exemplify the opportunities that are increasingly becoming evident within the sector.
Companies: ABZA AKR AGY APH AGL AVCT BVXP COG CTH IHC LID MTFB ODX OPTI NIPT PRM SDI STX SNG TSTL