Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Rosslyn Data Technologies. We currently have 9 research reports from 2 professional analysts.
"Friends and neighbours. Having drawn swords with Mexico regarding The Wall, the White House appears to have concluded the most obvious way to ensure they do finally end up paying for its construction, is to simply impose punitive import taxes on their US-bound goods and services. Meanwhile, having failed to appoint a Commerce Secretary, Donald Trump has declared that today he will personally discuss the framework for a post-Brexit trade deal with Theresa May when they meet this afternoon. The devil, of course, will always be in the detail, but nevertheless, these talks are much more important for the UK (whose exports, valued at US$125bn, representing 17% of its international trade) than it is for the US (who send just US$65bn back across the Atlantic, representing less than 0.5% of their GDP). So the Prime Minister will need to tread lightly when raising the point she has already made to an assembly of House and Senate Republicans, that neither of their countries can afford to forget their responsibility in shaping world affairs, such as helping to defeating the ideology that drives Islamic extremism. The Dow Jones gleaned enough confidence from the President's continuing actions to ensure a third straight daily rise, keeping it firmly above the 20,000 marker, although the NASDAQ and S&P-500 but closed with fractional losses. The start of the extended Chinese New Year holidays meant that the Shanghai Composite was closed and a good number of the region's other bourses had shortened sessions, resulting in particularly low Asian volumes. That said, the Nikkei still found cause to celebrate a slower than expected decline in its consumer prices, suggesting its battle against deflation may finally be bearing fruit, with a modest gain, although the ASX notched up the territory's strongest performance. Europe had been hoping that Greece's talks with its creditors that took place yesterday would result in a breaking of the bailout deadlock; in the end no conclusion was reached, unfortunately deferring discussion regarding their aid package to another session which finance ministers insist should be concluded before the elections in the Netherlands and France get underway. No significant macro data is expected from the UK today although the EU will provide M3 and Private Loans figures, before the US releases another heavy batch of statistics, including Q4 GDP, Personal Consumption, Durable Goods Orders and the Michigan Consumer Sentiment Index. Investors in London will also be anticipating Moody's scheduled report on the UK's Sovereign Debt Rating today, which is likely to leave the equity market opening this morning rather lacklustre, with the FTSE-100 seen rising some 20 or so points in early trade."
Companies: AGL RDT SKY ULVR
"European Central Bank President, Mario Draghi, speaking yesterday afternoon at a Parliament Committee in Brussels, warned of the dangers that ultra-low interest rates pose for the Eurozone. While the ECB decides whether to hold rates lower-for-longer his focus on the results of such prolonged low rates, in terms of excessive build-up of debt, longer-term risk-taking and vulnerability to excessive valuations in the region's real estate markets, in fact asks more questions than it answers. They also highlight the dilemma Italian voters face ahead of ahead of Sunday's constitutional referendum; polls presently put the 'No' vote in the lead with 52%, having effectively become a confidence vote on Renzi's premiership itself; if, as promised, he resigns given such an outcome, then chaos could ensue as the door is opened for the anti-capitalist, anti-austerity, Eurosceptic opposition Five Star Movement to win a snap election. With recently passed law, 'Italicum', then potentially granting the Party control of the lower chamber even if it does not win a majority, its threat to launch a further referendum on the Country's membership of the single currency then becomes a very real possibility. So revolution undoubtedly remains in the air and next week investors may see whether the Eurozone itself has now decided to pick up this particular baton. Indeed, such fears even managed to spread to the overnight markets, with US equities giving back most of the previous day's gains, as all three principal indices fell back with financials being hit by broad sell-off. Asia ended more mixed, with the Nikkei being the principal loser as tech and banking stocks came under pressure while other regional bourses closed with just fractional movements on relatively light volume. In the UK, the Bank of England is due to release October mortgage lending data this morning; this closely followed indicator of the health of the housing market, for which the consensus expectation is 65,000 new mortgages, remains a key indicator of consumer confidence and the nation's overall economic wellbeing. Today the Treasury Committee Hearing on Hammond's Autumn Statement is also due, while in the US a second GDP estimate will be released. Numerous earnings or trading statements are also due from UK corporates, including Acal (ACL.L), Countryside (CSP.L), Cranswick (CWK.L), ITE Group (ITE.L), KCOM Group (KCOM.L), LSL Property (LSL.L), Merlin Entertainment (MERL.L), Patisserie Holdings (CAKE.L), Shaftesbury (SHB.L), SSP Group (SSPG.L) and Topps Tiles (TPT.L). A nervous opening in London is expected to see the FTSE-100 move ahead some 5 points in early trading." - Barry Gibb, Research Analyst
Companies: AAU BMN ADN IVO RDT
Warpaint London—Schedule one update. Raising £2.5m at 97p. Expected mkt cap £62.6m vs revenues of £22.3m Walls & Futures REIT — Has raised £1m at £1 to acquire, refurbish or develop residential properties in the UK . Due to arrive on ISDX on 29 November Diversified Oil & Gas— Schedule One now out. $60m to be raised. Expected admission 6 December. Creo Medical Group —UK based medical device company focused on surgical endoscopy, a recent development in minimally invasive surgery. Admission due 7 December. Fundraising details TBA.
Companies: MTR RDT MKT GROW BLU TRAK KOD IVO TRX AKR
"Monetary policy decisions from the US Federal Reserve and, possibly more importantly, the Bank of Japan, are expected to drive investor sentiment in the global markets this week - two-day policy meetings from both are due to start tomorrow. While expectations for a September Fed hike have abated quite significantly following a series of soft economic releases, growing uncertainty over what the BOJ will do is an increasing source of anxiety for investors. Consensus appears to be for Governor Haruhiko Kuroda to introduce a further minor rate cut of maybe 10 to 20bp, while expanding the monetary base slightly from the current 80tr Yen and adding additional J-REIT purchases. The concept of reducing long-term JGB purchases in favour of shorter-term or riskier assets has also been seen by the media as one way of steepening the yield curve and weakening the Yen, whose strength during 2016 has been principally responsible for undermining progress of this export-led economy. While Janet Yellen is expected to tell journalists she will continue to 'sit on her hands' at the quarterly press conference scheduled to follow the FOMC meeting, market focus will likely rapidly return to the November 8th presidential election. One contributor to the Weekend FT highlighted the chance of a 15% to 20% hit on both the US and UK stock markets and a collapse of the US$ should Trump succeed. Scary stuff, but for many it sounds a bit like a replay of the 'doom and gloom' Brexit-vote forecasts that were delivered from a multitude of economists and economic policymakers three or so months back; nevertheless, this will undoubtedly become the centre of media attention for the next 8 weeks, meaning that the exceptional low market volatility of the summer period has almost certainly now drawn to a close. US equities ended their rather choppy week with all principal indices falling, although continuing support for tech stocks following Intel's unexpected hike of its third-quarter revenue guidance, meant that the NASDAQ was the least damaged. Resuming trading following their Mid-Autumn holiday, both the Shanghai Composite and Hang Seng gained as traders took positions ahead of the central bank meetings, while the ASX tracked back slightly mimicking the US with Japan staying closed for its 'Respect of the Aged Day' holiday. No new macro data is due from the UK today, but corporates including Dairy Crest (DCG.L), Finsbury Foods (FIF.L), Petra Diamonds (PDL.L) and Sprue Aegis (SPRP.L) are expected to be released earnings. Traders will also remain sensitive regarding any further disclosures or police statements regarding the Manhattan pipe-bombing that took place in Manhattan over the weekend and particularly any confirmation that it was terrorist-related. The FTSE-100 is seen rising some 60-points in early trading this morning." - Barry Gibb, Research Analyst
Companies: ACA AVN RDT TLW
"The Fed's apparent adoption of a 'wait and see' approach on how and when to proceed with its next interest rate move, effectively reversing previous signals that pointed at a move to higher rates this summer, is today likely to help European equities recover some losses of recent days. The FTSE-100 is seen opening up some 65 points, with the French and German markets rising similarly, while the US dollar may give back some of its exceptional post-Brexit gains ahead of Friday's US Jobs data, which could provide a repeat of last month's gloomy reading. Picking up this mood, US equity indices recovered from a weaker opening to close with modest gains on bargain hunting. Asia was mixed in early morning trade, with the Nikkei giving back early advance as the Yen continued to strengthen while the Shanghai Composite continued to reflect doubts about China's economic wellbeing; Australia's ASX held onto commodity-led gains despite S&P lowering the Country's rating outlook to negative. Macro releases due from the UK this morning include Industrial Production data and the Halifax house price index. Amongst UK corporates, expect Q1 figures from Marks & Spencer, full year numbers from Sports Direct and a trading update from AB Foods." - Barry Gibb, Research Analyst
Companies: CYAN HUM KRS BOK CFHL MRO RDT
"Equities in London are expected to open on a downbeat note, with the FTSE-100 expected to fall initially around 15 points, before testing its technical support at the 6,100 level. After early strength, the US markets gave back gains made on the back of firm oil and energy prices as investors focussed back on a relatively dull earnings season, growing political uncertainty and lacklustre economic data. Recent strength in gold and bond markets serves as a reminder of investor's continuing concerns for the global economy. Key macroeconomic data due today from the US includes the monthly non-farm payroll employment report, which may determine both expectations for the Fed's interest rate policy and sentiment for the coming week. In the UK, markets await this morning's release on the Halifax house price index and AGMs from Alliance Trust, RSA Insurance and Man Group, together with trading statements from BBA Aviation and International Consolidated Airlines." - Barry Gibb, Research Analyst
Companies: ALO BT/A BNZL LSE RDT RSA
The FinTech market is a vast and still largely uncharted ocean of opportunity. Trillions of dollars move around hundreds of countries every day; and that is just between banks, never mind individual customer transactions. The banking systems that facilitate this activity are by and large 30 to 40 years old and have evolved from multiple systems developed in many different countries. The opportunities to improve the systems are equally as vast as the market, though by necessity it will be a process of evolution rather than revolution, as no one company is going to persuade all the banks to change all the systems in one go. There is therefore plenty of market to go for. The first wave of “FinTech” companies has now blazed the trail. Some have succeeded and some have fallen over. Most have had to re-think and re-invent their models many times. In all respects the big prizes are still there, but there is now much more information on how best to access them.
Companies: NLG RDT COMS FDM GAMA PROX FBT WAND ESV MONI
ATTRAQT Group | Forbidden Technologies | Imperial Innovations Group | Macfarlane Group | Manx Telecom | MediaZest | NetScientific | Petards Group | ProMetic Life Sciences | Rame Energy | Restore | Rosslyn Data Technologies | SPARK Ventures
Companies: ATQT BYOT FBT IVO MACF MANX MDZ NSCI PEG PLI RAME RST RDT
The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week. Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.
Companies: OPM ACT ATQT EYE ERGO FFX GAL KBT OPTI REDX RDT SAR SPRP XLM
Research Tree provides access to ongoing research coverage, media content and regulatory news on Rosslyn Data Technologies. We currently have 9 research reports from 2 professional analysts.
|28Nov17 17:51||RNS||Holding(s) in Company|
|02Nov17 08:29||RNS||Holding(s) in Company|
|17Oct17 14:08||RNS||Posting of Annual Report|
|27Sep17 16:53||RNS||Director/PDMR Shareholding|
|15Sep17 08:00||RNS||Grant of Options|
|31Aug17 14:46||RNS||Director/PDMR Shareholding|
|30Aug17 09:22||RNS||Final Results|
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
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 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
We have refreshed our quality style screen for the first time since its inception in February this year. As before, the screen selects the 25 stocks exhibiting the highest quality characteristics according to our criteria from our universe of approx. 500 stocks and we have chosen 10 stocks to focus on. Since inception the screen has significantly outperformed the main small-cap index and marginally outperformed the microcap index. There was notable volatility around the UK general election, which is interesting as quality would usually be seen as a defensive style in large-caps. As expected, turnover of constituents is modest with only 9 leavers and joiners despite the extended time-scale since inception. We will refresh again in five to six months’ time.
Companies: WIL GHT AVON CHH ZYT DOTD MAB1 GTLY FCRM VANL
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
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.
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.