Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on FreeAgent. We currently have 9 research reports from 2 professional analysts.
Amino Technologies (AMO LN) FY’17 in line with cash well ahead of expectations | Consort Medical (CSRT LN) In line interims, still waiting for a catalyst | First Derivatives (FDP LN) First investment by FD/BGF strategic partnership | FreeAgent (FREE LN) Emerging banking channel; Practice growth tempers | Gateley (GTLY LN) In line interim results, seasonally stronger H2 expected | iomart Group (IOM LN) Solid interims with bolt-ons establishing eCommerce presence | mporium Group (MPM LN) Seven figure contract win for FWM business | Northgate (NTG LN) Caution around disposal profits, but attractively valued | Oxford BioMedica (OXB LN) Upgrade to Buy as confidence increases | PCI-PAL (PCIP LN) New contracts and positive trading update | Realm Therapeutics (RLM LN) Phase II trial start in Atopic Dermatitis | Victrex (VCT LN) Strong prelims, special dividend ahead of expectations | WYG (WYG LN) Tackling H1challenges, targeting a return to growth
Companies: CSRT NTG OXB VCT AMO IOM WYG MPM PCIP PURI FDP GTLY FREE
FreeAgent’s interim results showed strong revenue growth (+28%, ACMRR +17%) with an evolving channel mix. Direct showed steady progress whilst Practice’s historical stellar growth has been tempered by changes in regulation. An emerging Banking channel, driven by its RBS partnership could prove to be a very significant opportunity for the group going forward. Our estimates reflect the tempering in the Practice channel but we expect sustained positive EBITDA towards the end of calendar 2018. The group’s opportunity remains significant and it is well positioned to exploit this given the strength of its product and its strategic focus.
FreeAgent issued a trading update indicating H1’18 revenue and adjusted EBITDA of £4.6m (+28% y-o-y) and £0.4m loss, respectively. These are broadly in line with our expectations of £4.8m and £0.2m loss with some softening in the partner channel due to a legislative change impacting public sector contractors. Cash of £3.4m was better than our expectations of £2.9m. The partnership with RBS appears to be growing strongly, with revenue from integration activities stepping up and the first signs of accelerating licence growth coming through as the period ended. Interim results will be out on 5th of Dec where we would expect to get more detail on the performance and outlook on the various channels to market. The strength of the group’s product, the go-to-market strategy utilising various channels and the significant addressable market leave us confident of the group’s growth prospects.
1Spatial (SPA LN) Turnaround taking hold, resumption of growth | Domino’s Pizza Group (DOM LN) Strong Q3 update suggesting H1setback is being overcome | FreeAgent (FREE LN) Trading update | LiDCO Group (LID LN) New approach to unlock potential | Marston’s (MARS LN) YE update not as bad as feared & sensible moves to protect cash and profitability in FY18 | Retail Real wages trend considerably better than previously thought
Companies: MARS SPA FREE LID
Totally (TLY) - Sch 1 for £11m RTO of Vocare, a provider of integrated urgent care services to the NHS throughout the UK. . £76.8 million rev in the year ended 31 March 2017. Totally to address Care Quality Commission concerns. Due 24 Oct. Central Asia Metals (CAML) -RTO of Lynx Resources. Anticipated market capitalisation at Admission: £404.8m. Raising £113m at 230p. Acquiring the SASA zinc-lead mine in Macedonia from Solway Industries. Due 15 Dec. Alpha Financial Markets Consulting— Global provider of specialist consultancy services to the asset and wealth management industry. Due Oct. Revenue of £6.7 million for the year ended 31 March 2011 to £43.6 million for the year ended 31 March 2017. Offer TBA. Due 11 Oct. Springfield Properties—Scottish housebuilder. “Our turnover exceeded £100 million for the first time this year and now we employ around 500 people. This IPO is the next step in our growth.” Expected Mid October. Offer 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. SolGold—Publication of prospectus regarding transfer from AIM. Due 6 Oct TI Fluid Systems—Maybe second time lucky? Pulled last October. global manufacturer of automotive fluid storage, carrying and delivery systems seeking to raise €425m to reduce financial leverage (to approximately 2.0x net debt to Adjusted EBITDA by the end of FY 2017). Possible partial sale by Bain. Revenue for FY 2016 was €3.3 billion and Adjusted EBIT was €362.1 million 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 13 Nov. Bakkavor Group - Provider of fresh prepared food intends to float in November. FY 16 Revenue: £1,763.6 million FY 16 Adjusted EBITDA: £146.4 million (13.7% CAGR FY 14-FY 16). Part vendor sale and primary raise of c. £100m. Price TBA. Russia’s En+, owned by Russian aluminium tycoon Oleg Deripaska, has assets in metals and energy, including hydropower. reported to be seeking dual London and Moscow listing raising $1.5bn TMF Group , which provides tax, admin and legal support services, reported to be seeking London IPO to raise c. £200m. People’s Investment Trust—Objective of sustainable wealth creation. Also to list on the Social Stock Exchange. Targeting £125m raise on 17 Oct. No performance fees or executive bonuses in order to focus on long term rather than short term performance. ContourGlobal LP—Report on Bloomberg that the thermal energy power generator is considering a London listing.
Companies: ARIX TMT SRT FREE SPA JDG DNA AGM BRD SEE
FreeAgent’s FY key financial metrics either met or beat expectations. Revenue was up 41% y-o-y, driven by 102% growth in the Practice channel, its key focus area for growth. Our sales, gross profit and net cash forecasts are unchanged but expect the FY’17 cash outperformance (FY17 cash: £4.3m) to be invested quicker, resulting in lower EBITDA this year and next. FreeAgent continues to delight customers with its product and the lifetime margin of a customer remains well over 3x the cost of acquiring those customers. As such, we are confident of further value creation, with medium-term regulatory drivers helping to drive adoption.
Touchstone Exploration— Oil exploration and production company active in the Republic of Trinidad and Tobago. Interests of approximately 90,000 gross acres. Production c. 1,300 boepd. Raising £1.45m. Expected mkt cap £7.5m. Due 26 June. I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission. Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission in Early June Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June. DP Eurasia—Intention to float from the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia. £20m primary raise plus a partial vendor sale. Film Finances—Sky News reports that ‘movie financing company with credits including the Hollywood hits La La Land and Nocturnal Animals is plotting a blockbuster premiere on the London stock market that will value it at several hundred million pounds.’ Expected ‘during the summer’. AIB—Intention to float from AIB, Ireland's leading retail and commercial bank . The Minister for Finance intends to sell approximately 25% of the Ordinary Shares of AIB. Prospectus and announcement of the price range due in mid-June 2017. Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. Flying Brands (FBDU.L)—Prospectus approved by FCA. RTO of Stone Checker Software, supplier of technology solutions in the field of kidney stone analysis and prevention. Has raised £550k at 3p. Subject to GM on 15 Jun. Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe
Companies: MXCT PREM GUS PYC VP/ FREE CPL AMO MERC WDC
FreeAgent has released a positive trading update for the year to March’17. Group revenue is expected to be £8.0m, slightly ahead of our £7.6m forecast, with adjusted EBITDA loss and net cash both comfortably ahead of our expectations. Annualised Committed Monthly Recurring Revenue of £8.6m at the period end is in line with our forecasts, reinforcing our confidence of further growth in FY’18 and beyond. Today’s announcement follows on from the Royal Bank of Scotland contract award in January, continuing the group’s strong start to listed life post it’s IPO in November ’16. The group’s subscription model is highly attractive, with 95%+ recurring revenues and gross margins of over 80%. With customer lifetime value equivalent to 3.8-4.6x the cost of acquiring a customer, we believe the growth capital raised at IPO will be deployed to deliver substantial shareholder value.
EJF Investments— Publication of prospectus from the closed-ended investment company investing in assets benefitting from regulatory and structural change in the financial services sector. To join Specialist Fund Segment of the Main Market | ADES International Holding— Intends to join the Standard List in May raising up to $170m plus a vendor sale. Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa. | Franchise Brands—Schedule 1 detailing £28m reverse takeover of Metro Rod. Admission expected 11 April. | Alpha FX Group— Schedule 1 update from the foreign exchange provider focused on managing exchange rate risk for UK corporates that trade internationally. Raising £30m. Expected market cap £64.2m and admission 7 April. | K3 Capital Group—Schedule 1 update from the Group of business and company sales specialists across business transfer, business brokerage and corporate finance. Raising £2.1m plus £15.7m vendor sale. Admission due 11 April. | Tufton Oceanic Assets– Offer extended to 9 May to enable investors to complete further due diligence.
Companies: HDD FREE MUR PKG GTC CNS SQZ IVO SO4 WTI
Research Tree provides access to ongoing research coverage, media content and regulatory news on FreeAgent. We currently have 9 research reports from 2 professional analysts.
|05Dec17 07:00||RNS||Interim Results|
|10Oct17 07:00||RNS||Trading Statement|
|06Oct17 09:20||RNS||Holding(s) in Company|
|02Oct17 14:04||RNS||Exercise of Options and TVR - Replacement|
|26Sep17 12:07||RNS||Exercise of Options and Total Voting Rights|
|28Jul17 07:00||RNS||Re Directorate|
|26Jul17 15:26||RNS||Result of AGM|
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