Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Redstoneconnect. We currently have 25 research reports from 4 professional analysts.
We have left our full year adjusted PBT forecast for RedstoneConnect (Redstone), unchanged at £2.2m but have lowered our net cash forecast from £4.8m to £2.5m due to increased working capital commitments. As such, earnings will be second half weighted given Redstone reported adjusted PBT of £0.493m at the interims. Our confidence in the full year estimate is based upon the timing of profit recognition on long term contracts and the acceleration in contract wins since the interims. We continue to forecast a 3yr CAGR in the adjusted PBT of 49%, with the EBIT margin rising from 3% in FY17 to 7.5% by FY20. With Redstone trading on a PE rating of 11.7x and 9x for FY18 and FY19, we maintain our BUY recommendation and 250p price target.
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. Cora Gold— West African focused gold exploration business, significantly enlarged by the amalgamation of the gold exploration assets in Mali and Senegal of Hummingbird Resources and Cora Gold's former parent, Kola Gold. Due 9 Oct. Offer TBA City of London Group (COLG) - Sch 1—RTO of Milton Homes Limited, an equity release provider which has a UK residential property portfolio of 586 properties with a market value of approximately £77 million as at 30 June 2017. Offer TBA. Due 5 Oct Springfield Properties—Scottish housebuilder. Intention to float. Offer TBA “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.” 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. Curzon Energy—Intention to float from the energy Company pursuing a targeted acquisition strategy. Raising £2.3m Gross. First acquisition is 100% of Coos Bay Energy LLC, owner and operator of c. 45,370 acres of coalbed methane leases, targeting first gas by the end of 2017. Price TBA. 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: ITM NGR NIPT TERN DGB BLU REDS
RedstoneConnect (Redstone) has released an in-line trading statement for the six months ending July 2017 and remains confident for the full year based upon the pipeline of work, order book and the successful integration of Anders + Kern. While the trading will be second half weighted, we are leaving our forecasts unchanged and expect a full year adjusted PBT of £2.2m representing growth of 78% and for Redstone to report a net cash position of £4.8m by January 2018. Trading on a PE rating of 13x and 9x for the years ending January 2018 and 2019 our price target remains at 250p and we reiterate our buy recommendation.
Warehouse REIT - The Company will invest in a diversified portfolio of UK warehouse assets located in urban areas. The Company is targeting a dividend yield of 5.5p equivalent to a yield of 5.5 percent. for the year ending 31 March 2019. Issue price 100p. Offer TBA. Due 20 Sep | 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. | 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. | Charter Court Financial Services Group—Intention to float. Specialist lender serving the UK residential mortgage market. The net mortgage loan book stood at £4.4 billion as at 30 June 2017 growing at a compound annual growth rate of 92 percent since 31 December 2014. Part vendor sale and £20m primary raise. | ContourGlobal LP—Report on Bloomberg that the thermal energy power generator is considering a London listing. | Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Offer raising £200m at 100p. The Company has decided to extend the closing date for the Placing, Offer for Subscription and Intermediaries Offer to 1 August 2017. The Company may bring forward this closing date at any time. Admission 15 September 2017
Companies: EME PLMO UKOG HZD REDS STAR PXOG EVE SEE NAH
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. | AEW UK Long Lease REIT—Intention to Float. Up to £150m raise. Admission early June. UK specialist and alternative property | Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe
Companies: EAH ACP REDS BKY PHE OSI 7DIG AGL
I3 Energy –Schedule 1. Independent oil and gas Company with assets and operations in the UK. Offer TBC, 26 May admission. | Opera Investments –Reverse Takeover of Kibo Mining’s subsidiary Kibo Gold. Raising £1.5m. Expected mkt Cap £6.5m. 23 May. | Eve Sleep—Schedule 1 from the e-commerce focused, direct to consumer European sleep brand. Raising £35m at £1.01. Expected mkt cap £140m. Expected 18 May 2017. | Velocity Composites—Schedule 1. Manufactures advanced carbon fibre and ancillary material kits (predominantly carbon fibre) for use in the production of aircraft. 18 May 2017 admission expected. Raising £14.4m at 85p. Expected mkt cap £30.4m. | 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 late May. | AEW UK Long Lease REIT—Intention to Float. Up to £150m raise. Admission early June. UK specialist and alternative property | Alfa Financial Software –Intention to float. Mission-critical software platform purpose-built for asset finance enterprises. Vendor sale of 25% plus. FYDec16 rev £73.3m (CAGR of 24% from 2012). Adjusted EBIT £32.8m. | Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe | ADES International— Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa, seeking raise up to $170m plus vendor sale under a Standard Listing of the Main Market. Admission due May 2017. | Tufton Oceanic Assets– Extended to 9 May on specialist funds segment of Main Market to enable further due diligence. | PRS REIT—Private rental sector REIT raising up to £250m. Admission due 31 May.
Companies: LND NASA ATQT CNS INL SOU ALT PURE WRES REDS
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RedstoneConnect (Redstone) has acquired Anders & Kern for £1.4m and raised further funds to accelerate the development and market penetration of OneSpace. It has raised £6.5m at 1.5p, a 3% discount to the price on 8th May. We are leaving our FY18 PBT unchanged at £2.2m, but have increased our FY19 PBT forecast by 19% to £3.6m. For FY20 we expect a PBT of £4.1m implying a 3yr (2020-2017) CAGR for PBT of 49%. Moreover, we calculate the acquisition creates shareholder value with a ROCE of 30%. We increase our price target from 2.2p to 2.5p and maintain our buy recommendation with Redstone now trading on a PE rating of 16x and 12x for the year’s ending January 2018 and 2019.
REDS has agreed to acquire Easter Road Holdings and its subsidiary Anders + Kern for £1.4m
Venture Capital Trusts (VCTs) raised £542m in the 2016-17 tax year, which is the second-highest amount in a single year. Specialist AIM VCTs had particularly successful fundraising efforts, with some closing their offers well before the end of the tax year, so this is good news for AIM companies seeking investment. Unicorn AIM VCT had already raised the £15m it was seeking by early February. The cash raised was 18% higher than the £458m raised in the 2015-16 tax year. Restrictions on pension investment have led investors to seek other ways to invest for the longer term. The highest amount raised in one tax year was in 2005-06, when £779m was raised but the income tax relief rate was 40%, rather than 30% as it is currently. There are £3.9bn of VCT assets under management. There are other new sources of finance for smaller companies. Downing Strategic Micro-Cap Investment Trust raised £54.5m after expenses. This is not a VCT but it is another potential investor for small companies with a market value of less than £150m. Many of these will be too large to be qualifying investments for VCTs. Downing is likely to take significant stakes because it is aiming to have a portfolio of between 12 and 18 investments.
Companies: REDS NASA RFX MTFB EPWN FISH
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Prelims for the year to January 2017 are in-line but more importantly they confirm the restructuring process is now complete, prove the commerciality of its cloud based platform and demonstrate a move towards higher margin services. PBT was £1.2m (against a loss last year), adjusted EBITDA grew 56% to £2m and cash from operations turned positive at £0.9m allowing a net cash position to be maintained. For this year, we expect PBT growth of 77% to £2.2m (previously £2.5m), implying a current PE rating of 15x. We reiterate our buy recommendation with a 2.2p price target as the turn around generated by Redstone has yet to be reflected in the share price.
ADES International— Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa, seeking raise up to $170m plus vendor sale under a Standard Listing of the Main Market. Admission due May 2017. Global Ports Holding—Intention to float on Standard List of the Main Market. International cruise ports operator. Seeking $250m raise including $75m primary offer. Dorcaster—Schedule One Update. Admission now expected on AIM 3 May. RTO of Escape Hunt raising £14m at 135p. Verditek— Intention to float on AIM. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Raising £3.5m. Admission in May. ADES International Holding— Intends to join the Standard List of the Main Market 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. Admission expected in May. Tufton Oceanic Assets– Offer extended to 9 May on specialist funds segment of Main Market to enable investors to complete further due diligence.
Companies: MXCT CLIN COS ODX HZM OPTI REDS IMTK TRIN BLTG
Redstone’s latest update for the year ending January 2017 confirms adjusted PBT of £1.2m (with a further £0.3m from discontinued operations) and a contract extension. The adjusted PBT is in line with expectations and represents growth of 71%. Cash at January 2017 was £3.2m, materially above our forecast solely due to the timing of working capital. The focus of attention will now shift to the January 2018 estimates when we expect PBT to more than double to £2.5m, implying a PE rating of 12x. We reiterate our buy recommendation with a 2.2p price target.
RedstoneConnect (REDS.L) | Paysafe Group (PAYS.L) | 1Spatial (SPA.L) | MayAIR Group (MAYA.L) | Staffline (STAF.L) | Autins Group (AUTG.L) | Tandem group (TND.L) | Kromek (KMK.L) | CentralNic (CNIC.L) | Coinsilium (NEX:COIN)
Companies: REDS PAYS SPA MAYA STAF AUTG TND KMK CNIC COIN
Research Tree provides access to ongoing research coverage, media content and regulatory news on Redstoneconnect. We currently have 25 research reports from 4 professional analysts.
|05Dec17 15:32||RNS||Multi-million pound OEM for OneSpace|
|26Oct17 09:57||RNS||No intention to make an offer|
|18Oct17 12:24||RNS||Further re: possible offer|
|10Oct17 07:00||RNS||Interim Results|
|04Oct17 12:18||RNS||Further response re: Possible Offer|
|02Oct17 11:41||GNW||Hargreave Hale LTD : Form 8.3 - RedstoneConnect Plc]|
|02Oct17 09:43||RNS||David Newlands Form 8.3 - RedsoneConnect plc|
The latest Office for National Statistics (ONS) survey, ‘Ownership of UK quoted shares: 2016’, shows that retail investors are more important than most company managements realise or most capital markets professionals admit. When it is also appreciated that the data shows that retail investors set the share price for most quoted companies, most days, it becomes clear that engaging with such an audience enhances a company’s standing, whilst ignoring them courts disaster.
Companies: OPM ABZA AVO AGY APH ARBB AVCT BUR CMH CLIG COS DNL EVG EHP INL MCL MUR NSF OBT ODX OXB PPH NIPT RE/ REDX SCLP SCE SIXH TRX TON VAL
The acquisition of Perfect has transformed PROACTIS into a genuinely global player. However, the company is not resting on its laurels - new CEO Hampton Wall has set out an ambitious plan to continue the aggressive growth through a combination of organic growth and further earnings enhancing acquisitions. This note explains the rationale behind this strategy and assesses its feasibility. If execution continues, there is the potential for further significant value creation.
In July 2017, we highlighted the progress that AIM made in the first half of the year. We are now reviewing the performance over H2 2017. The latest AIM Statistics published yesterday show that there are currently 960 companies, with 80 new issues in 2017, raising £1.58bn and secondary issues raising a further £4.7bn. However, with 102 companies cancelling their listing there was a net 22 fall in 2017 as a whole. It appears that both the trends of new issue momentum and de-listings are set to continue in 2018. In Share News & Views, we comment on APC Technology*, ECSC Group* and IG Design.
Companies: APC BMS CRPR ECSC EUSP FDM GETB PCF SNX SPRP TCN W7L
A look back at our 2017 ideas In aggregate our analyst picks outperformed the FTSE All Share last year by 9% and the cumulative performance of our portfolio over 6 years would have given a total return of 300% (almost double the return on the FTSE All Share). In addition, many of our top-down themes played out very well such as our focus on secular growth in Tech, Life Sciences, Healthcare and Financials, an increase in M&A, our cautious stance on the Consumer and especially our bet on continued strength in the Industrials last year and solid growth in the global economy. What does 2018 have in store? We continue to play ongoing secular growth themes in Tech, Life Sciences, Healthcare and Financials. In addition, we tap into domestic areas of cyclical strength such as regional construction and house building, plus self-help initiatives and potential market share gains. We maintain a favourable view of Industrials given the global economic backdrop but think this could moderate during the year. Other changes of nuance include the potential for a better H2 in the Consumer sectors, which remain under pressure for now, and a better outlook in Media from a mini-quadrennial year in 2018.
Companies: AMO AVG CBP CVSG DNLM EKF FENR IOM SAA GLE PURI SFR PGIT PURI SFR SOG VRP
IQE’s pre-close trading update noted that management expects FY17 revenues to be ahead of market expectations. Noting that the upgrade is driven by delivery of volume epitaxy on a programme that we infer is the new iPhone X, a programme which will continue throughout FY18, we raise our revenue estimates for both FY17 and FY18, but keep EPS numbers unchanged as the proportion of licence revenues in the mix is lower.
PROACTIS has, via its wholly owned subsidiary Perfect Commerce, filed a tender offer for the remaining 21% of Perfect Commerce’s 79% owned subsidiary Hubwoo. This has no impact on our forecasts aside from the c€5.6m consideration, which we will reflect in our estimates once the offer completes. A trading update is due out mid February and the market will be looking for reassurance that the integration of Perfect Commerce is progressing as planned. The shares continue to look undervalued, but a weakening dollar does represent a headwind.
Arden Partners is soon to initiate full coverage of Cloudcall. We report on the Trading Update RNS released this morning, with full forecasts and initiation report to follow.
Companies: Cloudcall Group
WANdisco’s strong bookings momentum ($22.5m, +45%y-o-y, vs Edison $21.7m) in FY17 was more than matched by the strategic progress during the year. For the core big data business we upgrade our bookings estimate by 21% and now forecast 40%+ y-o-y bookings growth for FY18 and FY19, partially offset by a de-focus on the legacy SCM business. The company’s platform for growth looks exceptionally strong and we see scope for a further acceleration driven by adoption of Fusion for more use cases, sales through more partners and supported by very attractive market dynamics.
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
Instem this morning released an in-line trading statement for the 2017 year. The group is seeing traction across a number of fronts, including a recovery in the Clinical business, with two Alphadas orders in the period. The company has also today announced a material SEND contract win with a top-5 global non-clinical CRO. We make no changes to estimates for 2018 and beyond, but look forward to seeing further detail on progress at the time of results in March.
2017 reflected the investments being made to ready the group for scaled deployment through its partners. All indications point to 2018 as being that inflexion year. Few companies have the potential to deliver the revenue scaling profile we believe AE can deliver – not just through deployment in their partners’ customers but also by being embedded in their software/ hardware. The opportunity remains as exciting as ever with prospect of news flow in 2018 bearing testament to that.
Companies: Actual Experience
Bango has announced that it is providing resale and bundling technology for Amazon in India, enabling Bharti Airtel mobile customers to sign-up to Amazon Prime. The launch represents an expansion of the Bango Platform (“BP”) beyond Direct Carrier Billing (“DCB”), and also increases Bango’s exposure to a sizeable mobile and e-commerce market. The release contains no details on the contract terms and we make no changes to forecasts at this stage. Continuing Bango’s recent trend of contract wins with top-tier internet players, in our view the contract demonstrates the ongoing momentum in the Bango business and the versatility of the BP.
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.
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
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