Small Cap Feast
Caribbean Investment Holdings. Incorporated in Belize. Readmission to AIM. CIHL.L primarily operates financial services businesses through its subsidiaries The Belize Bank Limited and Belize Bank International Limited, both located in Belize and international corporate services through Belize Corporate Services Limited. CIHL shares are also traded on the Bermuda Stock Exchange. Lord Ashcroft holds 75%. No capital raise. 2019 net profit US$ 10.7m. Mkt cap £38.6m.
SMRT SAR ROCK DFCH TPX FAB UKOG AEG MTR IRR
28 Apr 20
CV-19 update: alive and kicking
SMRT has updated the market on current trading – the company is seeing resilience and robust trading in certain parts of the business while solutions serving meeting room and visitor management have understandably seen some disruption. With the group now capitalised at just £5m, we think the market has (wrongly) assumed fundamental challenges. From our perspective the situation and outlook are considerably more positive – we continue to see two exciting businesses (in SwipedOn and Space Connect) which could actually be long-term CV-19 beneficiaries and with little doubt, in our opinion, worth considerably in excess of the current market cap.
23 Apr 20
Evoko launch provides stock upside
Evoko is today announcing the launch of its next-gen Naso meeting room panel. SmartSpace’s Space Connect is the exclusive software provider for this panel and is set to benefit from royalties and associated SaaS revenues for a product that may have a TAM of up to €30m for SmartSpace. We think the value of the Space Connect and SwipedOn acquisitions have not remotely been factored into SMRT’s mkt cap.
11 Feb 20
Small Cap Feast
Intention to float by Gemfields Group. No Capital Raise. Currently listed on JSE. (GML:JNB) at circa £122m. The Group's key producing assets, the Kagem emerald mine in Zambia (believed to be the world's single largest producing emerald mine) and the Montepuez ruby mine in Mozambique (one of the most significant recently discovered ruby deposits in the world), are both expected to have long mine-lives with potential for expansion. Also owns the Faberge brand. Due Valentines Day 2020.
SMRT PHE AGL CORA GMR UFO OPG DNL PRES AFS
11 Feb 20
FYJan20 impacted by supply constraints, causing delays
SMRT has today provided a year-end trading update, stating that sales and EBITDA will be below our previous expectations. We therefore revise FY20E sales from £11.4m to £6.3m and EBITDA from £-1.2m to £-6.2m. We also adjust FY21E sales from £15.9mm to £14.0m. While this is undoubtedly disappointing news, it is worth stressing three key points: 1) the downgrade has been caused by hardware supply chain constraints (rather than falling demand for SMRT’s products) 2) the impacted business has not fallen away, but is rather now expected to be delivered in H1FY21 and 3) SwipedOn – which alone could be worth more than the group’s current market cap – is said to be trading strongly.
23 Jan 20
Acquisition bolsters mid-market strategy
SmartSpace has announced the acquisition of Space Connect. The £3.2m acquisition significantly enhances the group’s mid-market capability and results in substantial R&D savings going forwards. H1’20 results, published alongside the acquisition, show progress with the group’s new software led strategy, with software revenue up 53% and total revenue up 57% to £3.0m. FY’20 is now expected to be significantly second half weighted, however our full year expectations are underpinned by a qualified pipeline of nonrecurring software opportunities. We continue to believe the group is well positioned in the high growth ‘space & workplace management software’ market (15% CAGR forecast to 2022) and expect further progress through our forecast period.
31 Oct 19
Facebook working on AR glasses, TransferWise revenue +53% YoY, WeWork debt price tumbles
Facebook has been working to develop augmented reality glasses out of its Facebook Reality Labs in Redmond, Washington, for the past couple of years, but struggles with the development of the project have led the company to seek help. Now, Facebook is hoping a partnership with RayBan parent company Luxottica will get them completed and ready for consumers between 2023 and 2025, according to people familiar. Needless to say, we highlight a potentially substantial threat to Snap Inc, and a potentially huge opportunity for developers within the Facebook ecosystem.
SMRT EVRH ESYS BGO BOKU EQLS IMMO TECH VRE
18 Sep 19
Strong progress at SwipedOn
SmartSpace has provided a positive update on its recently acquired subsidiary, SwipedOn. The group’s stated objectives for SwipedOn are to continue to drive new customer acquisition and increase ARPU. Management are delivering on both counts. Total customer numbers are up by 50% since acquisition to over 3,300 and additional modules and versions have been delivered as planned. We are encouraged by the progress at SwipedOn and see today’s update as a further positive signal that the group is delivering on its plan to transform the group into high quality recurring revenue business. The shares trade on just 1.3x EV/Sales, which we believe is highly attractive for a software led business with an increasing focus on high margin SaaS revenue.
23 Jul 19
Small Cap Feast
Interswitch, a Nigeria-based payments firm, has hired advisers to resurrect plans for a stock-market listing in London and Lagos later this year, which may value the financial technology company at $1.3 billion to $1.5 billion. Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m. Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.
SMRT DX/ BKS SIR DOTD SEE GAN UOG RENX CHRT
23 Jul 19
Allenby Capital TMT Update 20.05.19 (CNIC.L, SMRT.L, BIRD.L)
CentralNic plc (CNIC.L, 57p/£97.3m) FY results and acquisition: Executing buy and build strategy (13.05.19) | SmartSpace Software plc (SMRT.L, 84p/£18.5m) Management meeting: Targeting space management (08.05.19) | Blackbird plc/Forbidden Technologies plc* (BIRD.L, 6.0p/£17.9m) Formal name change (14.05.19)
SMRT CNIC BIRD
20 May 19
Transformed business delivering to plan
SmartSpace has delivered FY’19 results in line with expectations. The key milestone in the year was the successful disposal of the Systems and Integration business, but we are highly encouraged by the initial success achieved within the ongoing software business. The core SmartSpace business signed a number of landmark deals in the year, while recently acquired SwipedOn has performed “exceptionally well”. The group is well positioned in the high growth ‘workplace management software’ and ‘occupancy analytics’ markets (15% and 25% CAGR respectively forecast to 2022), with traction from both entry-level and enterprise clients already building. The shares trade on just 1.3x EV/Sales, which we believe is highly attractive for a software led business with an increasing focus on high margin SaaS revenue.
08 May 19
Small Cap Feast
Induction Healthcare Group plc—a healthcare technology company focused on streamlining the delivery of care by Healthcare Professionals looking to join AIM. Expected raise of £14.58m at 115p, market cap of £34.07m. Expected 22 May 2019. SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Distribution Finance Capital Holdings plc — specialist lender which builds relationships with manufacturers and then provides working capital solutions up and down their supply chains to drive their growth is looking to join AIM. No raise, secondary offering of £19.8m at 90p, expected market cap of £95.98m. Expected 09 May 2019. Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019
SMRT RENE MXCT CLL JSG ALS OBC PCIP NQMI EMIS
08 May 19
Trading update reemphasises business transformation
SmartSpace has issued a trading update which serves to reemphasise the business transformation undergone in the year. The group disposed of legacy operations in June (for £21.6m), refreshed the management team, and purchased SwipedOn, a fast-growing SaaS business offering visitor management solutions, for £5.4m in October. We note no numbers have been provided in this update, with the company expecting to report FY’19 results by the end of April. We currently have no forecasts in the market, however traction in recent months has been encouraging. Management has secured two significant contract wins and a partnership deal with Evoko showing strong underlying momentum.
04 Mar 19
Powering the Smart Office
SmartSpace Software (formerly RedstoneConnect) has transformed from a systems integration and IT infrastructure business into a software led workspace management platform, targeting recurring revenue growth through provision of its scalable, modular workspace solution. The group is well positioned in the high growth ‘workplace management software’ and ‘occupancy analytics’ markets (15% and 25% CAGR respectively forecast to 2022), with traction from both entry-level and enterprise clients already building. We forecast 59% revenue CAGR for SmartSpace to FY’21, with an exit ARR run-rate of £8.6m by Jan-21. Valuation looks attractive at 1.3x FY’20 EV/Sales, with this multiple likely to expand rapidly as recurring revenues build.
01 Mar 19
Significant contract win with leading event management group
On 30th Jan Smartspace Software announced a significant new contract win worth £1.25m over 5-years. The contract includes a proportion of service revenues for Smartspace’s hospitality software platform, alongside deployment and configuration revenues to be recognised in FY19 and FY20. Having disposed of the legacy Systems Integration and Managed Services businesses in May ’18, Smartspace is now a pure-play software provider with a growing long-term recurring revenue base. With strong momentum building within the business, we believe the group is approaching an inflection point that offers significant value creation potential for shareholders.
31 Jan 19
Small Cap Feast
Kropz PLC—an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa, a phosphate project in the Republic of Congo and exploration assets in Ghana. Looking to join AIM, offer TBC, market cap TBC. Due Late October. Azalea Energy—oil and gas production and development company based in Louisiana, United States. Net production of 13 MMcfe/D (2,200 boepd) and total 1P proved reserves of 91 Bcfe (15.1 mmboe), 2P reserves of 111 Bcfe (18.5 mmboe) raising up to $38m, expected mkt cap over $100m. Due 29 Oct Summerway Capital investing company established to acquire companies or businesses which the directors of the Company believe have the potential for strategic, operational and performance improvement so as to create shareholder value. Offer TBC, market cap TBC expected 19 October Admission is being sought as a result of the proposed RTO of Cambian Group plc following completion of the acquisition by CareTech a leading provider of specialist social care services, supporting adults and children with a wide range of complex needs. No raise, market cap TBC expected 19 October. Path Investments— First acquisition of a 50 per cent. participating interest in the producing Alfeld-Elze II gas field located 22 kilometres south of Hannover in Germany. Seeking £10m raise. Due late Oct Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over the next few months.
SMRT VAST DRV KAPE NKTN G4M ARCM VNET AEG URU
16 Oct 18
TMT UPDATE - 04.06.18 (FBT.L, MWE.L, SND.L, REDS.L)
Forbidden Technologies plc* (FBT.L, 5.4p/£9.7m) Placing: Considerable firepower | MTI Wireless Edge plc* (MWE.L, 26.1p/£14m) Merger: further progress made | Sanderson plc (SND.L, 106p/£63.7m) Meeting with management: On track for the full year | RedstoneConnect plc (REDS.L, 117p/£24.4m) Disposal and prelims: Focus on smart buildings and agile workspaces
SMRT BIRD MWE SND
04 Jun 18
Small Cap Breakfast
Block Energy— UK based oil exploration and production company whose main country of operation is the Republic of Georgia. Raising £4m. Mkt cap £9.3m. Due early June. Codemasters Group— video game developer and publisher, specialising in high quality racing games. Offer TBA. Seeking £15m in primary. Due 1 June. Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June. Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Cloud based automated management data system. Raising £6m at 15p. Mkt Cap £12m. Due 30 May. Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May
SMRT ENGI BLV AVO GMR PPIX MED IMM ALS ABAL
29 May 18
Small Cap Breakfast
Avast, global cybersecurity provider with 435m users worldwide. In 2017, the Group's Adjusted Billings was $811 million, Adjusted Revenue was $780 million, Adjusted Cash EBITDA was $451 million. Seeking to raise $200m. Due in May | Fundamentum Supported Housing REIT. Raising £150m. Focussed on UK Social Housing assets. Due 2 May | Vivo Energy—retailer and marketer of Shell-branded fuels and lubricants in Africa, Due in May. 100% secondary sell-down of existing Shares by Selling Shareholders, No new Money. Pricing TBA | Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects. Due 03 May | Odyssean Investment Trust—Raising £100m at £1. Due 1 May. The Company will primarily invest in smaller company equities quoted on markets operated by the London Stock Exchange | Finablr - press reports in ‘Arabian Business’ that Money transfer firms UAE Exchange, Travelex and others under UAE billionaire Bavaguthu Raghuram Shetty’s newly formed holding company Finablr are preparing for a London IPO
SMRT HGM TSG INFA VRS VEL CGNR SND
30 Apr 18
Justifying the 250p price target
With the full year numbers confirmed, we focus on the diversity of the earnings stream and by adopting a sum-of-the-parts methodology to reflect their different characteristics we determine a fair value of 250p. This is substantially ahead of the current share price. With clients requiring ‘connected office’ software, RedstoneConnect is now generating sustainable revenues from a wide client base and from numerous sources e.g. SaaS, licence fees, consultancy, one-off and recurring contracts. At 250p, the FY19 PE rating is 19x. This is not demanding for a company which has developed cutting edge software, can boast of a blue-chip client base, is expected to post a 3yr CAGR (2017 – 2020E) for adjusted PBT of 48% and enjoys a net cash position. We maintain our buy.
26 Jan 18
Small Cap Breakfast
Hydrominer GmbH, An Austrian cryptocurrency miner, is considering an initial public offering (IPO) on the London Stock Exchange AIM during 2018 according to an article on Bloomberg. Block Energy—a NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC 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.
SMRT GTC BRY ERGO HAYD QXT INFA MYSL ACSO SRC
25 Jan 18
Full year PBT** forecast of £2.2m unchanged
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.
08 Nov 17
Small Cap Breakfast
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.
SMRT ITM NGR YGEN TERN THRU BLU
29 Sep 17
Update supports PBT growth forecast of 78%
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.
08 Sep 17
Small Cap Breakfast
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
SMRT EME PLMO UKOG HZD STAR PXOG EVE SEE NAH
08 Sep 17
Small Cap Breakfast
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
SMRT EAH ACP BKY PHE OSI 7DIG AGL
05 Jun 17
Small Cap Breakfast
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.
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17 May 17
High margin growth strategy accelerated
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.
10 May 17
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.
SMRT NASA RFX MTFB EPWN FISH
09 May 17
Recovery not reflected in the share price
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.
25 Apr 17
Small Cap Breakfast
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.
SMRT MXCT CLIN COS ODX HZM OPTI TRIN BLTG ABAL
25 Apr 17
Smart buildings – concept to reality
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.
07 Mar 17
Small Cap Breakfast
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)
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07 Mar 17
33% upgrade to January 2017 PBT
Redstone has released a trading update stating it ‘expects to report EBITDA at the upper end of market expectations’. This implies EBITDA of £1.8m which is above our current estimate of £1.5m. Accordingly, we are upgrading our PBT forecast for the year ending January 2017 by 33% to £1.2m from £0.9m. We reiterate our buy recommendation with a 2.2p price target implying 69% upside.
09 Jan 17
Acquisition underpins forecast
The acquisition of Commensus for £2.4m accelerates the journey to develop a high margin, scalable, business with recurring revenues, focusing on technology and services for smart buildings and destinations. With a new sales team being put in place, an extended Product Stack, new applications and a new ecosystem of partners following the acquisition of Connect IB in 2016, we estimate adjusted PBT will grow from £0.9m to £2.5m for the year ending January 2018. The Software Applications division will contribute 30% to EBIT (2015: 7%), before central costs, with an EBIT margin of 27% (2015: 8%). With free cashflow also expected to turn positive next year we re-iterate our buy recommendation with a price target of 2.2p representing 57% upside.
22 Nov 16
Conroy Gold & Natural Resources* (CGNR.L) | Crossword Cybersecurity * (ISDX:CCS) | Karelian Diamond Resources (KDR.L) | SCICYS (SSY.L) | Keywords Studios (KWS.L) | Redstone Connect (REDS.L) | ZOO Digital Group (ZOO.L) | Genedrive (GDR.L) | Shanta Gold (SHG.L) | Dart Group (DTG.L)
SMRT CGNR KWS GDR SHG DTG SYS ZOO KDR
17 Nov 16
Significant progress in 2016
The settlement of all legacy issues and the focus on software sales is having the desired impact. Adjusted PBT at the interim was £0.49m, compared to £0.35m in the prior period and £0.68m for the year ending January 2016. The improving sales mix also allowed the EBITDA margin to increase to 4.2% from 3% with net cash increasing to £1.3m from the start of the period. We maintain our buy recommendation and 2.2p price target implying 35% upside.
11 Oct 16
Cambridge Cognition Holdings* (COG.L) | Edenville Energy (EDL.L) | Avingtrans (AVG.L) | Gaming Realms (GMR.L) | Redstone Connect (REDS.L) | Concurrent Technologies (CNC.L) | Porta Communications (PTCM.L) | Galantas Gold (GAL.L) | Range Resources (RRL.L) | Plutus Power Gen (PPG.L)
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29 Sep 16
All legacy issues now resolved
Today’s upbeat trading statement while comforting for our forecasts only tells half the story. The new management team continues to make good on its strategy of moving away from a group of underperforming assets to one focused on providing technology solutions and services for smart buildings and commercial spaces. News flow has been consistently positive with contract wins, contract extensions and acquisitions de-risking our forecasts. We re-iterate the buy recommendation with all legacy issues now resolved.
05 Sep 16
Hybridan - Small Cap Wrap
ALSP* Board Changes, COMS Contract Win, CNS Contract Win, CCS University Partnership, DEMG announces results of ODM trial, ESP acquisition in Leicester, EZH Interim Results, EVG results, FEVR Trading Update, FDEV Update, INS acquisition, MMH Acquisition, MMX Launch, MXCP Placing, OPTI* Patent Filling, PINN Acquisition, PLI* Bought Deal, SAR* Clinical Trial, STOB Deal Completion, TERN Acquisition, TMT* Investments
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01 Jun 16
Smart buildings, smart performer
Redstone is now the core operating brand of COMS, complemented by its recent acquisition of Connect IB. With its established reputation the Group is well placed in the fast growing Smart Building sector, and enjoys first mover advantage. With clear evidence emerging of the benefits of Smart Buildings, Redstone can be considered one of the UK’s leading IT networking and Smart Building systems integrators providing design, implementation, management and solution services. The goal is to become a market leader following a strategy of organic growth, product development, margin enhancement and acquisitions to build an annuity style of recurring revenues. With a forecast 3yr CAGR for PBT of 73% from current operations alone, we initiate with a Buy recommendation and an initial price target of 2.2p representing 51% upside.
04 May 16
Happy Birthday AIM: it’s tough being the middle child
Going into 2015, AIM had monumental expectations. 2014 was a record breaking year for London’s junior market with IPOs across the year raising £2.4bn (the largest since AIM’s inception). AIM’s 20th year made for a perfect battle ground between the bull and bear camps once more. The bulls, hailing the success of the world’s most successful growth market referencing Big Yellow, IP Group, Domino’s Pizza and of course ASOS. The bears, swiftly retorting back sending shudders down the spines of investors everywhere with the sounds of Quindell, Globo, Adgorithms, and of course where would they be without the mention of a handful of China frauds.
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02 Dec 15
All Change Please
There is not much in the way of actual coms left at Coms following the disposal of the loss making telecoms business in H1 this year for £2.5m. That is not the only change. The Board has been substantially refreshed with a new CEO, CFO and Non-Executive Director. The company has realised £360k of annual cost savings on property costs, with potentially more to come.
05 Nov 15
Technology Review - FinTech: The Second Mouse Gets the Cheese...
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.
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08 Oct 15
UK Tech Sector: Sleeping giant or hibernating bear?
Investors can be forgiven for getting excited about the global tech sector with the recent news from the NYSE that another company has gone flying out the tech IPO gates; this time it was internet domain behemoth, GoDaddy. The company raised $460 million as part of the IPO and with the shares rallying more than 30% on their first day, reached a valuation of around $6 billion. Considering the company lost $143 million last year it shows us the US tech boom is far from over.
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21 Apr 15