Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Proactis. We currently have 89 research reports from 6 professional analysts.
Shares of cloud communications company Twilio fell as much as 17% on Wednesday after the company gave lower-than expected quarterly earnings and revenue guidance. Earnings: Excluding certain items, 3 cents per share, vs. 1 cent per share as expected by analysts, according to Refinitiv. Revenue: $295.1 million, vs. $287.8 million as expected by analysts, according to Refinitiv. Twilio's revenue grew 75% in the fiscal third quarter, which ended on September 30, according to a statement.
Companies: CALL PHD KNOS ESYS
SAP has struck a three-year agreement with Microsoft to support its customers’ migration into cloud-based systems. The partnership, called "Embrace", will help clients to run operations hosted at remote servers supported by SAP's flagship S/4HANA database. Under the agreement, SAP's cloud platform services will be bundled with SAP systems and sold through Microsoft's distribution channels. In the past two months, Google has revealed new Pixel phones, Microsoft has launched Surface tablets and laptops, Facebook has introduced a new smart display called Portal along with Oculus VR headsets and Amazon has rolled out a plethora of gadgets that work with its voice assistant, Alexa. We look into why Big Tech is so focused on hardware given their software pedigrees.
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 com pany focused on developm ent 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 Paym ents, Marketplace and Fintech Ecosystem in Kazakhstan w ith a leading m arket 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: NAK GFIN CCS PHD MED OSI DDDD MWE THRU
We highlight the strong Workday numbers overnight which provides cause for enthusiasm for growth equities, the SaaS software sector and most specifically within AIM, could augur well for Kainos, given their close partnership on consulting and implementation. Beyond the beat, most noteworthy comment was that management saw no impact from Brexit as yet nor the trade tensions in the US and China. With enviable growth rates of 32% in the quarter, we highlight few names in AIM such as CloudCall* offer such compelling opportunity.
Companies: 7DIG CALL TRAK ESYS FST KNOS PHD QTX SAG SEE TRCS
Brickability - The br icks supplier , w hich a lso ha s a hea ting a nd plumbing business a s w ell a s a roofing division, expects to join the junior market at the end of this month with a market cap of circa £150m
Companies: PPC GRA MPM KWG AOGL OKYO WEY TRP PHD EVG
Netcall (NET): Corp Trading update | Proactis (PHD): Corp APF progress
Companies: Netcall Proactis
Allergy Therapeutics (AGY): Corp Regulatory and trading update | ClearStar (CLSU): Corp Financial services client expands contract again | Europa Oil & Gas (EOG): Corp Wressle appeal date set | Lok'nStore (LOK): Corp Exciting pipeline of new landmark stores | Nasstar (NASA): Corp Prelims – showing the sector how to do it | Proactis (PHD): Corp Interims and strategic update | SimiGon (SIM): Corp FY 2018 shows recovery but SaaS transition continues
Companies: AGY 9537 EOG LOK NASA PHD SIM
Interims indicate performance in line with the February trading update. Review of operations since February has given a clearer picture, leading to revised but broadly unchanged FY19 revenue & EBITDA expectations; changes to FY20 (delivering stabilisation and improved margins); and maiden FY21 (restoring growth). Following the departure of former CEO Hamp Wall (January) and awareness of weak trading (February), the Board has identified changes to enable replication of successful operations (UK, NL) across weaker territories (US, FR, DE). As the fifth-largest procurement solutions business globally, PHD remains undervalued due to a series of challenges which have the opportunity to be corrected with significant valuation benefit – and if not, then private equity or trade buyers will be interested., Given the current share price, we trim our 12-month target price to 100p, with further upside available on proof of execution.
ANGLE (AGL): Corp Ovarian cancer study started enrolment | Byotrol (BYOT): Corp US approval and expanded launch | Intercede (IGP): Corp New contract win | Morses Club (MCL): Corp Strong results from a strengthening company | PPHE Hotel Group (PPH): Corp Investment projects progressing well, driving growth | Proactis (PHD): Corp Trading update | Telit (TCM): Corp Vendor loan enables Automotive sale completion
Companies: BYOT IGP PPH PHD AGL MCL TCM
Anglo African Oil & Gas (AAOG): Corp Funding secured to complete TLP-103C | InnovaDerma (IDP): Corp Trading update – Boots purchase order expected shortly | Proactis (PHD): Corp Board changes; trading in line | Quartix (QTX): Corp FY 2018 results in line with forecasts | SCISYS (SSY): Corp Contract wins underpin wisdom of Brexit protection
Companies: IDP PHD QTX SSY AAOG
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Post acquisition expectations of a year of cost management and delivery of synergies in FY18, before driving for revenue growth from the combined group in FY19, are on track. While the unexpected customer churn revealed in April was a setback, prelims reveal strength in profitability and underlying cash generation. With the opportunity globally to export the success of the solution set as experienced in a series of core verticals in the UK, to the US, France and Germany in particular, with increasing volumes of new business in those territories over time, encouraged by the rise of e-commerce and regulation. We are seeing positive regulatory drivers . Management can now focus beyond driving the business combination, and dedicated teams are developing advance the significant market opportunity: we see significant further upside (not yet factored into the conservative forecasts but potentially starting to take effect in FY20) through monetisation of The Business Network to drive supplier side revenue, and deploying the accelerated payment facility in existing and new supplier network environments. Target 250p reiterated, with forecasts tweaked (t/o -3%; -0.7% EBITDA; adj dil EPS +7%).
Research Tree provides access to ongoing research coverage, media content and regulatory news on Proactis. We currently have 89 research reports from 6 professional analysts.
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Prelims reveal continued progress, particularly within Vicon, where sales grew an impressive 16% y/y, in turn driven by success within both new and existing verticals and so consistent with strategic objectives. Relative to forecasts, sales of £35.4m (+12% y/y) are in line and so too is adj. PBT of £5.5m, following continued investment and also IFRS 15 adoption. We leave forecasts essentially unchanged, believing the drivers for both divisions remain firmly intact and indeed reaffirmed, following an excellent FY’19, particularly in Engineering and ‘Adjacent Verticals’ within Vicon. On valuation, we continue to apply a SOTP methodology, reflecting both Vicon’s industry leading position and cash generative qualities and further, Yotta’s growing ARR in our fair value calculation. This arrives at 108p, implying some 20% upside.
Companies: Oxford Metrics
Pelatro has won a landmark contract with one of the biggest telcos in the world; a major global operator and household name – an outstanding achievement for a small newcomer in the market. After careful deliberation, it has been taken as another recurring revenue/gain-share deal (a fourth this year) rather than a large upfront licence. As Pelatro matures and feels more established, management can afford to take a longer-term view, sacrificing short-term growth and profit for the stability of recurring, incremental revenue streams. A likely $7m of upfront licence has now been foregone in these deals this year and thus FY 2019 revenue guidance is cut to $6.5m (still up 6% YoY). The impact of this pivot to much higher quality revenue should not hide remarkable performance this year. For comparison, had these been taken as licences, FY 2019 sales would have been $13.5m; 28% ahead of our $10.5m forecast set mid-2018, and 121% YoY growth on a comparable basis. That follows 161% and 95% YoY growth in FY 2017 and 2018 respectively. This breakthrough win comes on top of consistently strong sales growth and the increasing quality of earnings, and we reiterate our 125p TP.
Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.
Companies: ABBY AMS ANX ARS ATYM AVON BLVN PIER BUR CGS CAML CDM CSRT TIDE CYAN DTG DEMG ELM EMR FPO FDEV GTLY GENL GHH GRI GEEC GKP HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KAPE KEYS KWS KCT KGH LAM LIT LOK MACF MANO MOD OXIG PCA PANR APP SRE PHC PMO RBW RMM RBGP REDD RSW RNO ROR SUS SCPA SEN SHG SOLG SOM SUMO TM17 INCE TWD TRAK TRI VNET VTC ZOO ZTF
Bigblu’s trading statement confirmed an H2 performance in line with expectations. Actions to cleanse the customer base should yield operational benefits over time and the above consensus year-end net debt figure (£14m vs £9m) primarily reflected a Brexit-driven inventory build that should reverse in the next few months. Bigblu remains confident in FY20 consensus (see below), which implies an acceleration in revenue growth.
Companies: Bigblu Broadband
Blackbird plc* (BIRD.L, 35p/£30.7m) | CAP-XX Ltd* (CPX.L, 3.7p/£12.0m) | Shearwater plc (SWG.L, 242p/£53.5m)
Companies: BIRD CPX SWG
Interims are in line with the October trading update and unchanged forecasts, with revenue growth +5% to £4.4m, and £5.2m gross cash. The reduction in opex continues to improve profitability, delivering a 1H operating profit for the first time since September 2013, even as contract wins continue from new and existing customers and the customer profile reiterates the quality of the software. Eighteen months after the arrival of CEO Klaas van der Leest, the improved performance has clearly become a trend, and the group’s confidence is expressed in targeted investment to accommodate channel sales and co-ordinate centralised R&D to a clear road map. The horizon for Intercede brightened dramatically at prelims in June when the two-year recovery plan was delivered in a year – now the sun appears to be coming up. 80p target reiterated.
Companies: Intercede Group
As noted in the trading update, H1 was in line with expectations. It highlighted that this year will be particularly H2-weighted, with £8.8m sales in H1 delivering a small Adj. PBT. The expectation of a record H2 is underpinned by substantial annual contract renewals from licences signed in H2 LY; strong visibility on new contracts due to initiate in H2; and a significant pipeline of new business in negotiation with existing clients who continue to derive substantial benefits from D4t4’s data management solutions. We reiterate our FY forecasts and TP.
Companies: D4T4 Solutions
It is evident from the interims that FY 2019 will be notably H2 weighted, as H1 sales have seen a shift to an annuity model away from large licences. Although H1 revenue grew by an impressive 14% YoY to $2.7m, we forecast 72% YoY growth for the FY, leaving $7.8m required in H2. Management remains confident that this is achievable as sales accelerate though the year: $2.5m has been booked to date in Q3, with visibility on a further $1.1m for a total $6.3m of visible revenue YTD. The remaining $4.2m should be derived from a $9.2m near-term pipeline covering a wide range of products into a number of existing and new customers. On that basis, we retain our current forecasts, targeting a return to large licence sales in Q4. There is increased risk in this weighting, but PTRO is investing significantly in sales and delivery capabilities and has a track record of success in cross-selling and up-selling into its global telecoms group customers.
We continue to take a selective stance on stocks within the small cap Technology space. The sector’s equity performance was lacklustre over 2019, rising 4% and keeping pace with the All-Share index (relative to multi-year periods of outperformance) as investors took a cautious stance on geopolitical and macro risk. We believe cautious sentiment is likely to dominate trade during the first half of 2020 and maintain our preference for consumeroriented players, consistent with our Arden Thematic Technology framework. Our top picks for 2020 are CDM, EVRH*, SUMO and VNET.
Companies: CALL CDM FDEV KWS SUMO TM17
With FY19 in line with its targets, Idox is ready to continue the process of shifting to a recurring or SaaS revenue model over the coming years. Today’s trading update points to end Oct run-rate ARR of £38.9m, up 16% organic yoy, with a contracted order book of £12.1m up 29% underpinning the outlook for continued growth. We expect the shift to a cloud-first, SaaS revenue model will both accelerate growth and reduce costs. This makes the forward FCF yield of some 7% noteworthy.
Reiterating the October trading update commentary, investment in developing the enterprise focus of the group has led to larger contract wins. While this will benefit 2H20 and underwrite FY21 revenue growth, we trim FY20 and FY21 adj EBIT expectations by 9% and 11% respectively, with additional investment in infrastructure reducing FCF to still strong £11.4m (FY20) and £18.6m (FY21). With bold statements of investment from identification of opportunities, we look forward to proof of organic execution, alongside further acquisitions. Target 450p reiterated.
Companies: Iomart Group
Strong organic revenue growth in H120 was boosted by several multi-year fraud licences and the contribution from the VIX Verify and IDology acquisitions. During H1, GB Group (GBG) made good progress with its strategy to expand internationally and enhance its product functionality and datasets. Management is confident of meeting consensus expectations for FY20; while our forecasts are unchanged at the operating profit level, a higher effective tax rate reduces our normalised EPS forecasts by c 3% in FY20–22e.
Companies: GB Group
The technology commercialisation Company focused solely on cyber security and risk, has today announced receipt of accreditation by The Council for Registered Ethical Security Testers (CREST) for its penetration testing services, whereby Crossword’s consulting division is engaged to simulate cyber-attacks against its customers to identify weaknesses within their cyber-defences. The means that the Company now holds certifications from CREST, IASME and Cyber Essentials Plus. This is an important quality assurance stamp in a currently unregulated industry. We believe this is a vital seal of approval for a service where the risks of engaging an unscrupulous or incompetent provider could be catastrophic.
Companies: Crossword Cybersecurity
CentralNic has announced the acquisition of Team Internet for a total consideration of $48m. The acquisition will be financed in part by a further €40m bond issue under identical terms to the €50m issue announced on 23 May 2019. Team Internet operates a ‘domain monetisation’ platform, allowing domain name owners to monetise dormant domains to generate recurring income to offset renewal fees and earn a profit. This provides a complimentary service to existing CNIC services: clients currently pay CentralNic subscription fees to register and renew domain names. Team Internet had revenues of $66.7m in the 12 months to June 2019, with EBITDA of $10.6m. We expect this transaction to have an immaterial impact to 2019E due to timing and be 43.8% accretive to 2020E earnings. Post completion, we estimate net debt:EBITDA will be 2.1x in 2020E falling to 1.6x in 2021E.
Companies: Centralnic Group