genedrive (GDR): Corp COVID-19 test PCR test receives CE-IVD mark | Ideagen (IDEA): Corp PleaseReview on the world stage | Proactis (PHD): Corp Positive TCV update
Companies: IDEA PHD GDR
Hardide (HDD): Corp | Ideagen (IDEA): Corp | Quixant (QXT): Corp
Companies: HDD IDEA QXT
Amino Technologies (AMO): Corp | Elecosoft (ELCO): Corp | Gooch & Housego (GHH): Corp | Ideagen (IDEA): Corp | Intercede (IGP): Corp
Companies: AMO ELCO GHH IDEA IGP
Gateley (GTLY): Corp | Ideagen (IDEA): Corp
Companies: Ideagen Gateley
ANGLE (AGL): Corp De Novo submission to FDA expected by end Q1 2020 | Ideagen (IDEA): Corp Interims highlight ARR growth | Netcall (NET): Corp Trading update – strong cloud ACV growth | Pelatro (PTRO): Corp FY 2019 delivered and FY 2020 looks bright | Somero Enterprises (SOM): Corp Q4 ahead of expectations, boosting cash and dividend
Companies: IDEA NET SOM AGL PTRO
Interims demonstrate group revenue growth of 30% (including 7% organic) from increasing revenue quality as recurring revenue hits 74%. With an increase in ARR of 20% over only 6 months (+10% organic and +10% acquired), SaaS revenues have grown 76% year-on-year, from a 48% increase in SaaS bookings. The strategic execution remains impeccable, with two acquisitions in the period, integrated through Ideagen’s internal 72-point plan, leading to both revenue growth and margin expansion, from cross sales and synergies. Net debt of £18.0m represents less than 1x forecast FY20 EBITDA, with an expectation of net cash by FY21 and clear balance sheet capacity for further acquisitions ahead of the current income statement. Forecasts are unchanged and, with the General Election expected to release a log jam of decision making by acquisition targets, as well as providing a flurry of additional red tape as a post Brexit UK invents its own regulation standards in addition to target trading markets, we lift our target price to 200p in anticipation of acquisitions.
Ideagen (IDEA): Corp Retirement of CFO
The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m. Due 28 February
Companies: BVC CCS CARR SDX TEK IDEA TPG MKA RRR
Avacta (AVCT): Corp LG Chem partnership expanded | Hardide (HDD): Corp F-35 approval and patent granted | Ideagen (IDEA): Corp Strong interim trading update
Companies: AVCT HDD IDEA
Ideagen (IDEA): Corp Bolt-on acquisition
Registration document approved for Helios Towers. The Group provides essential network services, flexible infrastructure solutions and reliable power supply to mobile network operators in five African growth economies. Revenue increased 7 per cent. year-on-year to US$191m (H1 2018: US$178m), with Adjusted EBITDA up 15 per cent. year-on-year at US$99m (H1 2018: US$86m) for the six months ended 30 June 2019. Pricing rumoured at 115p to 145p implying valuation of up to $1.8bn. Expected Oct 2019.
Companies: IDEA WCH QUIZ TRMR SYM CLP CDM DTG CERP BLTG
AMRYT PHARMA PLC— a biopharmaceutical company focused on developing and delivering innovative new treatments to help improve the lives of patients with rare or orphan diseases have raised $60m before expenses and will relist on the AIM Market on the 25/09/2019. VAALCO Energy, Inc. (NYSE: EGY), an independent energy company focused on development and production assets in West Africa, today announces its formal intention to seek a Standard Listing on the Main Market of London Stock Exchange ("LSE"), to complement its existing Listing on the New York Stock Exchange. Kaspi.kz, the largest Payments, Marketplace and Fintech Ecosystem in Kazakhstan with a leading market share in each of its key products and services, announces today the expected publication of a registration document that has been submitted for approval to the FCA and its potential intention, subject to market conditions, to undertake an initial public offering . Registration document approved for Helios Towers. The Group provides essential network services, flexible infrastructure solutions and reliable power supply to mobile network operators in five African growth economies. Revenue increased 7 per cent. year-on-year to US$191m (H1 2018: US$178m), with Adjusted EBITDA up 15 per cent. year-on-year at US$99m (H1 2018: US$86m) for the six months ended 30 June 2019.
Companies: CKT IDEA SIXH IMMO EOG AMP SGM MERC RQIH AMYT
Ideagen has reported prelims to April 2019 delivering, as ever, forecasts in line with the May trading update and unchanged expectations. Recurring revenue improved to 67% (FY17: 57%; FY18: 62%), en route to the target 74% by FY20, with a steady stream of well executed acquisitions to boost organic growth (currently 8%) in contributing to the grander ambitions in hand – to achieve the three-year objective of £100m (including c£30m acquired) revenue run rate by FY22. The Integrated Risk Management market is growing at 13% per annum (Gartner, measured by total contract value and not organic recurring revenue growth per IFRS15!), and the confident June Capital Markets Day demonstrated that the group has the depth in management and rigorous processes to accommodate momentum in growth. FY20 forecasts are unchanged, indicating headline 25% revenue growth (organic and acquired) and 32% EBITDA growth, and we issue maiden FY21 forecasts, knowing full well they will inevitably be boosted with the high probability of further acquisitions. Target 180p reiterated.
Anglo African Oil & Gas (AAOG): Corp Funding completed, the Djeno beckons | Ideagen (IDEA): Corp The growth benefits of Organic + Acquired + Process | Telit (TCM): Corp H1 is in line with expectations
Companies: IDEA AAOG TCM
Avacta (AVCT): Corp PD-L1 candidate selected | Avesoro Resources (ASO): Corp Operational update, revised production, cost guidance | Ideagen (IDEA): Corp Acquisition | Kingswood Holdings (KWG): Corp Building strong foundations, ready to execute
Companies: AVCT ASO IDEA KWG
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Bango’s H1 20 trading update in our view delivers a number of confident messages. Growth in the key End User Spend (“EUS”) metric remainsrobust, and the group delivered record revenue growth and EBITDA during the period. The group’s financial position saw a solid improvement in the first half. A closing gross cash position of £4.2m represents a £1.5m increase on the FY 19A level and demonstrates the company is now generating cash from its operations. H1 20 was a busy period for Bango, with a number of new contracts signed in both the payments business and Bango Marketplace, establishing a good base for growth in the second half and into 2021. We make no changes to estimates following the update but believe that Bango continues to demonstrate strong momentum and that the group remains well placed to deliver its FY 20E targets.
This has been an impressive half for Bango. Mobile usage and transactions have risen during lockdown, driving End User Spend (EUS) over its platform up by nearly 60% to £740m. Moreover, Bango’s ongoing revenue also rose >50%, to a record level of £4.8m, with revenue growth more closely matching EUS growth than previously. With operational gearing in the payment platform, group profitability continues to rise rapidly as its revenue increases; group H1 2020 adj. EBITDA alone beating the whole of FY 2019. The major deals delayed from December also flowed through, both in Payments and the early-stage Bango Marketplace business. The period saw the purchase of a controlling stake in Audiens by a S. Korean tech conglomerate, allowing increased management focus while retaining a 40% stake in the business set to be boosted to a new level by considerable funding and IP injected by its new parent. Overall, Bango was cash generative and ended the half with £4.2m cash, suggesting c.£0.8m of cash from operations. This is a very reassuring performance, with the deals signed in H1 expected to boost H2 EUS to the £2bn targeted this year and leaving the company on track to meet our FY forecasts of strong revenue growth and material profitability.
FY20 results Revenue was roughly flat on the prior year ($29.8m vs $28.8m) but the Adjusted EBITDA result was $2.1m compared to the 2019 outcome of $0.4m – a material improvement, driven by a higher mix of strong gross margin sales and also benefiting to the tune of c.$1m from the adoption of IFRS16. Net cash (pre the convertible loan) was some $0.7m, impacted by a new divisional relationship with an existing customer leading to some payment delays – the RNS explains that this abnormal working capital position has now “unwound” post the year-end.
Companies: Zoo Digital Group
In February Nanoco announced that it had filed a patent infringement lawsuit against Samsung. The lawsuit alleges that Samsung has wilfully infringed the patents relating to Nanoco’s unique synthesis and resin capabilities for quantum dots. Nanoco is seeking a permanent injunction from further acts of infringement and unspecified but significant monetary damages. Nanoco has now secured litigation finance for the lawsuit from a very large US litigation finance specialist, removing the need for Nanoco and its shareholders to fund the process. Our estimates remain under review.
Companies: Nanoco Group
LoopUp has provided an update on trading to coincide with today’s AGM…in essence, the group continues to see activity “materially” above pre-COVID levels, and is confident of exceeding expectations for 2020. We choose to leave our forecasts (that we believe to be roughly in line with consensus estimates) unchanged for now, in advance of further detail likely with a fuller H1 update in early July.
Companies: Loopup Group
Order growth in H1E is running at a sustained high level and the sale of annuity based contracts is creating a material recurring revenue base for the business. This is pushing revenue recognition forward so while the H2E weighting in our unchanged forecasts looks high, a high quality business underpinned by ARR growth is currently being built.
Companies: Corero Network Security
EMIS confirmed that H120 trading was in line with expectations. As previously flagged, new business has been more difficult to sign, but the company is seeing some signs of recovery and as long as new business gradually improves through H2, EMIS anticipates meeting FY20 expectations. With a strong net cash position and access to debt funding, EMIS is well funded to manage through the current disruption. We maintain our forecasts.
Companies: Emis Group
IMImobile has issued an encouraging trading update, highlighting resilience in the Group’s core cloud communications operation. Gross profit rose 20%, with core Cloud comms (c.90%/revs) up >30% (inc. 3C acquisition). We estimate underlying organic decline at -5% y/y, in the middle of our scenario based range (-15% to 7%) with slow decline implying stabilisation in underlying communication traffic volumes post-lockdown. This stabilisation has been driven by growth in core sectors offsetting decline in sectors adversely impacted by the pandemic. Significantly, demand for the Group’s IMIConnect platform (SaaS revenues model) has remained robust as customers look to accelerate Digital Communication strategies, whilst upsell of additional channels in Q1 is also likely to drive future additional volumes from the Group’s existing base. Net cash of £2m is only modestly light of previous N1S forecasts for H1’21 prior to lockdown (£6.3m) and implies positive FCF through the previous 9-month period. We keep forecasts under review at this stage. In the medium-term, we see a path based on undemanding assumptions to FCF of £15m, offering a 7% yield at current valuation. The Group trades on 12x FY’19 EV/EBITDA (c.10x FY (Mar)’20E EBITDA based on previous forecasts), below recent sector acquisition multiples whilst offering a higher proportion of recurring revenue and operating further up the CPaaS value chain.
SDL held an introductory session for the Group’s new SLATE proposition (launched in June). Good traction has been seen within the Group’s existing base presenting an attractive upsell opportunity, whilst also enabling expansion of the Group’s TAM with a market-leading, highly automated and immensely scalable solution. Management estimate SME and ‘off-grid’ translation projects to be a market worth in excess of $10bn, with SLATE allowing the Group to target these areas in a more meaningful way. The new product fits with SDL’s strategic objectives of building deeper relationships with existing customers and building leadership in Language technologies. N1Se conservatively forecast Language Tech segment revenue growth of +4% and +6% for FY’20E and FY’21E. Outperformance in FY’21 by £2m of sales (FY’21E LT growth: +10% y/y) could deliver £1m uplift to EBITDA and FCF we estimate (+3% and +4% vs current forecasts). N1Se FY’21E forecasts currently generate an FCF yield in excess of 8%, with risk to the upside.
Gfinity plc* (GFIN.L, 3.6p/£26.7m) | Starcom plc* (STAR.L, 0.95p/£3.3m) | Mirada plc* (MIRA.L, 90.0p/£8.0m)
Companies: GFIN STAR MIRA
A concerted move into managed services is improving the quality of revenues. Management is targeting the growth in recurring revenues to cover the cash cost base of the company by 2022. This event will mark a material derisking of the investment case and is the pathway to the share price doubling or more over the next 2-3 years. Buy.
With the Nasdaq hitting all-time highs, finding quality, undervalued & resilient enterprise software stocks is nigh-on impossible. Especially those that are benefiting from secular growth trends, throwing off cash and expanding profits. BuildTech SaaS developer Elecosoft (now rebranded Eleco) fits the bill. Saying today that although H1’20 turnover dipped slightly to £12.2m (-4% vs £12.7m LY, -3% constant currency) due largely to COVID-19, adjusted PBT climbed 14% to £2.23m (£1.96m LY, or +23% reported £1.93m vs £1.57m LY). Boosted by favourable operating leverage, lower costs and higher EBIT margins (Est ED 19.4% vs 16.8% LY) - as tradeshows were postponed and less was spent on travel & other discretionary items.
Gfinity plc* (GFIN.L, 1.625p/£14.0m) | Blackbird plc* (BIRD.L, 16.5p/£55.4m) | Tern plc* (TERN.L, 11.5p/£31.1m) | The Panoply Holdings (TPX.L, 72.5p/£39.9m)
Companies: GFIN BIRD TERN TPX
EBITDA of £10.5m (£10.4mE) was delivered from revenue of £49.2m (£46.7mE) with net cash of £24.1m, (as revealed in August), comfortably ahead of our £21.5m year-end forecast. Newsflow in the period included three acquisitions, the securing of a five year framework agreement for deployment of TRACS Enterprise with a major Train Operating Group, and the successful transition of the CEO role to Chris Barnes. The Group continues to deliver the proven mix of self-funded acquisitions and organic growth, demonstrating comfortable delivery of forecasts reiterated at interims, and a very strong balance sheet giving capacity to deliver much more of the same. With the new CEO able to deliver operational efficiencies to a Group already well versed in delivering successful acquisitions, we look forward to the next part of Tracsis journey. Target 775p reiterated.
A strong interim period to January 2020 delivered the expected £26m revenue as reported in the February trading update, with a 31 January net cash balance also of £26m – EBITDA of £5.6m (post IFRS16), and adjusted PBT of £4.6m highlighting a strong performance. The Group has unchanged strategic ambitions – organic growth and M&A, both in evidence in Rail Technology & Services (RT&S) with 13% organic growth and the post period end acquisition of iBlocks. We withdrew forecasts last week due to the impact of COVID-19 on the 2H-weighted Traffic & Data Services business, given the exposure to cancelled large scale summer events, and uncertainty over traffic surveys; however, the potential for the Group is unchallenged when the world normalises. New contract wins, new product launches, new acquisitions and a hearty balance sheet continued to offer significant upside in 1H and post period end. Target price 900p remains based on our FY21 forecasts, which in theory should be consistent with previous forecasts and we look forward to reinstating numbers when the virus dust settles.