WHI Morning Comment: Water Intelligence (WATR)
Major reacquisition feeds WATR proactive growth trajectory, Q2 acceleration WATR has announced the reacquisition of its highly profitable Minneapolis franchise, providing a base for its corporate division in the Upper Midwest and opening up new opportunities in an area where the group had already delivered significant workstreams in 2019. The deal is earnings enhancing ($US0.3m PBT p.a., acquisition price c.$US1.3m spread over four years), highly complementary and will drive cross-selling of the successful wastewater solutions to local leak detection customers. These solutions are highly relevant in the Covid-19 environment, and it is notable that far from being slowed down by the current situation, WATR, an “essential service” provider to homeowners confined to their homes, is seeing strong demand for these services and is looking to accelerate its growth trajectory in the second half. Recently, WATR further evidenced its strong growth model, regardless of economic conditions, when it announced 36% PBT growth for FY2019E, followed by similar strong growth in Q1-20. Franchise reacquisitions form an important part of this model, since they enable the business to create efficiencies through centralised marketing and management, while adding local businesses which they already know very well to their corporate portfolio. Delivering in good times and bad, WATR is the only national player in leak detection, a strong position to feed its insurance-linked sales stream in a huge but unconsolidated market. We assess fair value at 500p for all these reasons and more.
12 May 20
WHI Morning Comment: Water Intelligence (WATR)
Strong momentum with Q1 profits up 35%; comfortably in-line for the full year A strong update from WATR this morning reinforces our fair value assessment of 500 pence with punchy revenue and profit growth continuing in Q1. The company expects comfortably to meet expectations for the current year, a rarity in the COVID-19 environment. This after WATR had already updated on an excellent FY2019E (PBT +36% YoY, both organic and acquired growth strong). Despite the YoY impact of reacquisitions, Franchise revenues still showed positive growth (+4%) while all the other areas grew double digit, with Corporate-Operated particularly strong at +29%. The wider backdrop of Covid-19 has prompted the company to accelerate innovative products which are relevant to public health issues arising during the crisis. A national player, WATR has already shown how it can piggy-back on major insurance streams of revenue, having in recent years started to tap into multi-billion $ sales which are available through major insurers. Our 500p fair value assessment is all the more pertinent given that the shares have fallen back as a result of broader headwinds while the company has continued to deliver in good times and in bad.
30 Apr 20
WHI First Light: Caspian Sunrise, Watchstone Group & Water Intelligence
Caspian Sunrise (CASP) – Corporate – Operational Update Market Cap £140m Share Price 7.7p Caspian Sunrise announced that the Deep Well A5 sidetrack has flowed for a period of 40 days and management stated it continues to believe that the well is capable of producing at a rate of at least 1,500 b/d. The company is focusing on ensuring flow is maintained by adjusting the wells choke size to maintain a constant reservoir pressure. The company stated it is planning to optimise the well through an acid job later in February and that the operation is expected to take three days. Watchstone Group (WTG) – Corporate – Pre-close trading update and planned capital return to shareholders Market Cap £68.4m Share Price 148.5p Watchstone has this morning released a pre-close update for the year ended 31 December 2019, as well as announcing a planned first tranche return of capital to shareholders by the end of June 2020, subject to approvals. Water Intelligence (WATR) – Corporate – FY trading update ahead of expectations Market Cap £44.2m Share Price 317.5p WATR has published another strong update this morning, demonstrating that the company is able to generate strong double digit growth in revenues while at the same time expanding margins. FY2019E results are reported to be well ahead of the prior year on both the sales and the profit lines (+27% and +36% respectively), while no less than 9% ahead of forecasts. Showing again that the company is able to grow sales and margins at the same time, PBT margins are up >150 basis points, while operating margins in the key Corporate activity are at 13.5% (also +150bp).
WATR CASP WTG
10 Feb 20
WHI Morning Comment: Water Intelligence (WATR)
Growth and value; adj. PBT +36% YoY, 9% ahead of views, delivering 1 year early WATR has published another strong update, demonstrating that the company is able to generate strong double digit growth in revenues (+27%) while at the same time expanding margins, a winning combination. Both sales and profit growth outpaced expectations generously, with a 9% beat to our forecasts at both levels. Particularly pleasing are (1) the ongoing growth in franchisee revenues – despite reacquisitions, organic growth remains a significant feature, (2) corporate location revenue and margin growth, +44% including reacquisitions but double digit even if these are excluded, and (3) the B2B channel (insurance-led) generated a sparkling +41% increase in sales. WATR is rolling out a strategy which has had long gestation, featuring a nation-wide presence across forty-six US states, technical skill-sets, overseas expansion and, ultimately the huge drivers for saving water in the modern world (annual multi-billion $ domestic pay-outs by US insurers alone). Major entry barriers remain. The company is effectively delivering a year early. Given our 500p fair value, we see significant upside for the shares together with a significant buying opportunity.
10 Feb 20
Small Cap Feast
The Pebble Group, a provider of products, services and technology to the global promotional products industry, announces its intention to seek admission of its shares to trading on the AIM market of the London Stock Exchange, which is expected to take place in early December 2019.The Group delivered revenue of £99.8m in the year ended 31 December 2018.No mention of bottom line and a suggestion that funds raised would provide an exit to private equity shareholders and the repayment of debt. Offer TBA. Longboat Energy raising £10m at 100p. Expected admission November 2019. The company has been established by the former management team of Faroe Petroleum to create a new full-cycle North Sea oil and gas company .The strategy to achieve this will initially be through the acquisition of assets where the management team can add value through subsurface and operational improvements, follow-up deal opportunities and near-field exploration; and by value creation through the drill bit. Due 28 Nov. MJ Hudson Group PLC, the financial services support provider to Alternatives fund managers and asset owners, is planning an AIM IPO. Deal details TBC but expected admission date mid-December.
WATR GRP BSE SWG UJO VRS VEC PRES
27 Nov 19
Confident and delivering from a strong installed base, undervalued
WATR has delivered as much in sales terms in the first three quarters of 2019 as it did in the whole year of 2018, putting on a 34% YoY growth sprint. Momentum in the individual businesses remains strong, with corporate-operated and franchise-related (mainly the insurance channel) revenues breezing forward by 47% and 45% YoY respectively. At the same time, pleasingly, the franchise division’s royalty income itself grew sales in spite of reacquisitions (+4%). This translates into approximately $67 million of gross sales and further opportunity for accretive reacquisitions. Our PBTA forecasts are reaffirmed at +24% for FY2019E, itself an impressive number while reinvesting for such strong revenue growth. The update highlights the huge opportunity for this business on the back of global as well as US demand for an answer to water loss from leaks and related issues such as lead in water and wastewater problems. With good progress from the International division (+27%), the business is operating well on an integrated basis; and looking forward, the company has commenced the roll-out of new proprietary wastewater diagnostics products with first sales expected before the end of the year. The valuation is underpinned as ever by the royalty stream combined in our Sum of the Parts methodology with other divisions to form our 500p fair value assessment.
28 Oct 19
With profits rising rapidly and the share price falling to an 18-month low, it is time to revisit this situation. Most recently, the company reported H1 profits equivalent to two thirds of FY expectations and 29% ahead YoY. The Corporate division growth driver lifted its revenues by 113%, reflecting the success of the company’s re-acquisition programme added on to 20%-plus organic growth. Insurance-related sales, a separate division, have grown five-fold in the last three years, and only represent a tiny fraction of the annual $US13bn bill the insurers have to pay for remediating water assets in the US - particularly pertinent given WATR’s position as a national player and the proven need of clients for a cost-effective and minimally invasive national service. The growing royalty stream underpins the valuation (Sum of the Parts basis), while as a dollar earner, the stock is a natural hedge at a time when the value of the pound has been falling. With a 500p estimation of fair value, we see significant upside from the current share price, as well as potential upside to forecasts in due course.
14 Oct 19
WATR growth momentum strongly on stream, H1 adj. PBT +29%
WATR has delivered another set of excellent results this morning, this time for the half year to end June 2019. Profit-wise at +30% these results are in line with buoyant expectations for the year – and ahead on the sales line, but all the better for that. As with successive results from WATR, this morning’s numbers prove the model – its specialist and technically advanced leak detection and remediation services and products find a very ready market in the US and elsewhere; at the same time, reacquisitions add a further growth dimension to the Corporate business, which shot forward by a punchy 113% YoY in sales terms and 56% by revenues. Excellent performance from other businesses encompassed growing revenues and profits in the franchise operation, as prefigured in the strong trading update on August 7 th which led to our raised fair value estimation, now at 500p. Notably, the Insurance channel, leveraging WATR’s national coverage, also grew profits and sales very strongly, by double and even triple digit percentages. A dollar earner, with effectively annuity characteristics in its very well-established royalty stream, the stock has fallen back in recent weeks, perversely enough. With a 500p estimation of fair value, we see significant upside from the current share price.
30 Sep 19
UK Oil & Gas (UKOG) – Corporate – Operational update | Water Intelligence (WATR) – Corporate – WATR growth momentum strongly on stream, H1 adj. PBT +29% | i3 Energy (i3E) – Corporate – Interim results and operational update | Goldplat plc (GDP) – Corporate - Preliminary results for the year ending June 2019 and new CEO | Oriole Resources (ORR) – Corporate – Growing position in Cameroon
WATR UKOG I3E GDP ORR
30 Sep 19
This morning’s update from WATR shows the business continuing to grow in line with historic CAGR of >30% in sales and profits over the past five years, reporting revenues ahead of expectations and profits comfortably in-line. The business provides specialist and precise leak detection and remediation in drinking, as well as waste water, on a minimally invasive basis across the whole of the US, as well as UK, Australia and Canada. It benefits from strong, global underlying structural growth drivers, which it has itself proactively enhanced both by winning major insurance channels as clients and by reacquiring franchises. Growth at 60% in franchise related activites, which include the insurance channel, and 56% in Corporate locations reflects the strength of demand, feeding through to +34% overall sales growth and PBTA up 29% in 1H, and boding well for the full year. The company’s customised technology offerings are expected to fuel extra sales by expanding its range of services with promising new products being rolled out. The reliable, growing royalty stream, complemented by profits from across the business, underpin our 500p fair value assessment, with this morning’s update suggesting further future upside. As a dollar earner, the stock has derated significantly in recent months, unfairly in our view.
07 Aug 19
Friday’s AGM update showed that WATR remains well on track to deliver double digit growth as previously highlighted. The growth momentum remains excellent, with confidence from the company in achieving $30m sales for the current year (representing c.19% sales growth) suggesting a strong platform for future potential upgrades. Profits are also forecast to continue to expand, against a backdrop of >30% sales and profit CAGR over the past five years, an impressive track record. The update highlights drivers including (1) reacquisitions (earnings enhancing and lowrisk), (2) reinvestment following the recent fund-raise, (3) the insurance channel growing at 80% in the past year, (4) proprietary technology upside, the fruit of investment, and (5) with 45-state distribution, a huge market to penetrate further in the US and beyond. Franchise revenues and earnings have continued to expand, despite significant reacquisitions. The company’s technology offering, including Orca and the customised video channel that the company is developing, will enable it to grow sales by expanding its service offering. The valuation is underpinned as ever by the substantial value of the royalty stream, complemented by earnings from the rest of the business, hence our 475p fair value assessment.
01 Jul 19
Small Cap Feast
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 Argentex a UK-based forex service provider founded in 2011 by its current management team which operates as a Riskless Principal for nonspeculative and forward foreign exchange as structured financial derivatives is looking to join AIM. Offer TBC, expected 25 June
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13 Jun 19
Strong set of inline results, revenues and profits soar
As anticipated, FY2018A results from WATR this morning are in line with upgraded expectations set when the company updated the market on 12th March, but they are no less impressive for that. This morning’s results reflect sales ahead by 45% YoY, slightly more than expected, and PBTA at $US2.5m (+44%), inline with our upgraded forecast. As the proprietor / developer of sophisticated leak detection technology, WATR has a highly developed and effective business model which it operates, together with its franchisees, largely in the US. Its Corporate business, with centrally run stores, grew revenues by >70%, with YoY growth of 34% for stores owned more than one year, resulting in profits more than trebling. Other business streams also did well, and the Insurance channel, leveraging WATR’s national coverage, has been a notable success, nearly doubling. Fundamentals remain strong, and in its statement, the company highlights the hundreds of billions of global dollars spent on water issues, as well as the massive US insurance bill. The most recent newsflow from WATR, a third US top insurance player client win, provided further confirmation of the momentum strongly signalled in this morning’s results.
09 May 19
WATR has been growing all lines of its P&L rapidly – revenues by 44% in 2018 and we forecast continued fast growth in current and coming years. Strong profit growth as well (PBTA c.47% up YoY in ’18). Together with last week’s Florida reacquisition, this morning’s announcement of the sale of a new franchise illustrates the mechanics of this. (1) Reacquisitions, which are typically earnings enhancing and extremely lowrisk, help to drive the already strong growth in the business which WATR manages directly. (2) Franchise royalties continue to grow despite the reacquisitions, and this is further underpinned by the sale of new franchises to highly commercial new or existing franchisees. Demand for security of water is growing – but on top of this WATR has tapped in to the acute need of the insurance sector, which pays out $13bn or more annually in the US for water damage. WATR’s insurance-led sales nearly doubled in 2018 and are driving growth right across the business. In 2018, the franchise royalties grew, despite significant reacquisitions. The company outperformed against expectations in 2018 (by 14%), and will doubtless do so again, holding out the prospect of potential upgrades. A business swinging upwards justifies a much higher share price than the current price.
04 Apr 19
Small Cap Feast
Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m. Loungers plc—the operator of 146 café/bar/restaurants across England and Wales under the Lounge and Cosy Club brands, announces its intention to seek admission on AIM, offer TBC
WATR MTR IMO NWF PPS RFX GHS SQZ CNC
04 Apr 19
Strong update, +14% beat to forecasts; technology-led service offering
WATR is a leading and geographically diversified specialist in precision, minimally-invasive leak detection and remediation in both drinking and waste water. Technology-led, the business uses solutions such as infra-red and acoustics and continues to expand its technology offering – a key differentiator against typical support services companies. The business has been a consistent performer with a history of delivering and exceeding expectations, although the share price, latterly, has marked time. WATR has today reported an FY18A PBTA result which is a 14% beat to expectations; and while the rating could be seen as high in the context of Support Services, the valuation should be seen in the light of similar franchise businesses and technology-led companies, reinforced by strong structural growth characteristics (see below). Strong results disclosed this morning show FY sales growing 44%, demonstrating growing momentum and ahead of the already strong Q1-3. No one-off, this continues an accelerating and compounding trend over the past three years, which we expect to be maintained. Insurance channel sales have nearly doubled and this momentum notably shows every sign of carrying on, opening up a very large US market in which WATR remains the only national player. The differentiated model – advanced technology integrated into multiple and efficient delivery channels – offers meaningful opportunities, while selective franchisee reacquisitions are also adding to the growth momentum and optimising the group’s capital structure.
12 Mar 19
WATR is a leading and geographically-diversified specialist in precision, minimally-invasive leak detection and remediation in both drinking and waste water. Technology-led, the business uses solutions such as infra-red and acoustics and continues to expand its offering – a key differentiator against typical support services companies. The business has been a consistent performer with a history of delivering and exceeding expectations, although the share price, latterly, has marked time. WATR has today reported an FY18A PBTA result which is a 14% beat to expectations; and while the rating could be seen as high in the context of Support Services, the valuation should be seen in the light of similar franchise businesses and technology-led companies, reinforced by strong structural growth characteristics.
12 Mar 19
WATR’s Q3 December update highlighted overall revenue growth in the first three quarters of as much as 40% together with a doubling of insurance channel sales as the business penetrates further the sizeable US market. Combining consistent royalties and a technology profile, WATR has a highly differentiated business model as the owner / developer of leak detection technology operated by itself and franchisees across the US, where it is the only national player. It has been selectively buying in franchisees for a good price, which has enhanced the company’s growth trajectory; and we expect this to continue. Underlying growth is fed by insurance and other national channels. In Qs 1-3, the franchise business also grew organically, despite reacquisitions. A dollar earner, the business is underpinned by strong fundamentals and the fall in the share price flies in the face of trading momentum, consistent delivery and a history of exceeding expectations. We expect this to correct on the back of expected strong newsflow and potential forecast upside.
14 Feb 19
Small Cap Feast
United Oil & Gas (UOG.L) an oil and gas exploration and development company brought to the Official List (Standard Segment) in July 2017 by way of a reverse takeover of Senterra Energy plc. No capital to be raised, expected market cap of £17m and expected 28 Feb Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m.
WATR SFE EAH TPG CPR LND TSTL ENQ TPFG BRD
05 Feb 19
Sector Note - Support Group
Topic of the quarter: Since our first quarterly at the end of 2015, 14 of the 59 companies we included in our valuation tables have been bid for (one delisted and one rather high-profile company has gone bust) and there have been other bids outside of our watch list. Given that those tables were simply designed to show the range of companies present within the sector – not a hit-list of undervalued opportunities – the fact that 24% of them have been taken over is worth revisiting. The demise of Carillion, severe financial pressure at Interserve and warnings from the likes of MITIE, Capita and Serco have dominated news flow but it should be remembered that the sector is broad and highly varied both in terms of business model and performance. If the troubles of a minority of the sector drag down wider valuations, then there is evidence that there is an army of potential bidders (possibly reinforced by further weakness of sterling) ready to take advantage
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20 Dec 18
Morning Note – 4 December 2018
discoverIE (DSCV): Corp H1 EPS +24% | DX (DX): Corp On track with turnaround plans | iomart (IOM): Corp Interims | Pelatro (PTRO): Corp Climbing the revenue curve | Quartix (QTX): Corp IFRS 15 and Insurance slowdown boosts FY 2018 | SRT Marine Systems (SRT): Corp Contract re-awarded | Surface Transforms (SCE): Corp H1 trading update | Taptica (TAP): Corp Trading remains strong but CEO issues to the fore | Water Intelligence (WATR): Corp Attacking a large addressable market
WATR DSCV IOM QTX SRT SCE TRMR PTRO DX/
04 Dec 18
Small Cap Breakfast
VR Education Holdings—a virtual reality software and technology company. Raising £6m, mkt cap c €22m. Due 12 March SimplyBiz, a Financial Services Firm, reported to be considering an IPO targeting a market capitalisation of between £140m and £155m in a listing that would raise £30m of new money. Bacanora Lithium—Readmission. No new money. Mkt cap £140m. Due 21 March. the new holding company for Bacanora Minerals Ltd Stirling Industries—Acquisition vehicle focusing on industrials. Offer TBA. Due 5 March. GRC International Group— holding company for a group of companies providing a range of products and services to address the IT governance, risk management and compliance requirements of organisations. Offer raising £5m at 70p with market cap of £40.2m, expected 5 Mar 2018 Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area. Vendor placing and new funds to a total of €225m, Target gross proceeds €207m. Expected 21 Feb Polarean - Medical drug-device combination company operating in the high resolution medical imaging market. Offer TBC. Due Early March 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
WATR GROW FAL TRX TENG FDBK OMIP CGNR AVAP ALTN
26 Feb 18
Small Cap Breakfast
Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area . Vendor placing and new funds to a total of €225m, Target gross proceeds €207m. TruFin—holding company of an operating group comprising three growth-focused FinTech and banking businesses operating in three niche lending markets: supply chain finance, invoice finance and dynamic discounting. Offer TBC, expected late Feb Polarean - The medical drug-device combination companies operating in the high resolution medical imaging market. Offer TBC. Due 22 Feb 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
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14 Feb 18
Small Cap Breakfast
Cradle Arc—holding company of a group of companies focused on the exploration and development of precious and base metals projects in Africa. Offer raising £2.4m with market cap of £20.13m. Expected late Jan 2018 Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £75m market cap. FYMar18E rev £241.5m and £7.19m PBT. 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.
WATR SGM QUIZ FRR NKTN VERS AMO EMAN 9537
10 Jan 18
Topic of the quarter: It’s alive! Infrastructure and assets in general have traditionally been built to provide a fixed service and are maintained and renovated to a fixed schedule – dead and dumb. Technology will completely change this. Sensors and wireless networks have the potential to allow assets to ‘talk’ to us. These living, smart assets will be able to tell us when they need maintenance, how efficient they are being and provide the data that will directly influence their construction, availability and use. The implications for construction costs through to operating costs and the ability to service changing user needs are very significant. The Support Services, Construction and Technology sectors need to work together to maximise this potential, recognise and harness the power of data, and invest in and embrace change. These are daunting challenges in highly competitive markets where politics play a role, different skill sets (that are currently in short supply) are needed and shareholders are looking over management's shoulders. However, the prize for those companies who get it right is significant, and the risk from not changing much greater. There are positive early signs with Crossrail providing tangible examples of Smart Infrastructure using innovative sensors.
WATR FOUR DSCV BOOT CLL CNCT FCRM LOK PPH RNWH STAF UTW VANL WYG
04 Dec 17
Since our first quarterly at the end of 2015, 12 of the 59 companies we included in our valuation tables have been bid for. Given those tables were simply designed to show the range of companies present within the sector, not a hit-list of undervalued opportunities, the fact that 20% of them have been taken over is worth looking at in more detail. At a time when warnings and share price collapses from the likes of Interserve, Carillion, MITIE, DX and Capita and Serco have dominated newsflow, it should be remembered that the sector is broad and highly varied both in terms of business model and performance. If the troubles of a minority of the sector drag down wider valuations then the evidence is that there is an army of potential bidders (reinforced by the weakness of sterling) ready to take advantage.
WATR FOUR DSCV BOOT CLL CMS CNCT FCRM LOK PPH RNWH STAF UTW VANL WYG SVCA
26 Sep 17
Carclo (CAR): AGM statement in line, but greater H2 weighting (HOLD) | Shield Therapeutics (STX): Iron tired of being tired all the time (BUY) | Water Intelligence* (WATR): Building market presence (BUY) | Chariot Oil & Gas* (CHAR): Rig assigned for Rabat Deep drilling (CORP) | Frontier Developments* (FDEV): A stellar year, and it’s just the beginning (CORP) | Atalaya Mining (ATYM): Interim results (BUY) | SCISYS* (SSY): FY 2017 in line with guidance so far (CORP)
WATR CAR STX CHAR FDEV ATYM SSY
07 Sep 17
In light of the UK election, we highlight our favoured overseas earners, operators in defensive markets and those capable of taking market share, but our main topic is the structure of the UK employment market. The UK has the lowest unemployment rate since 1975 at 4.6%, and there are, consequently, fewer and fewer candidates to fill vacancies. This suggests recruitment companies may struggle to grow, but there are structural changes in the UK labour force that offer growth opportunities. Temporary labour continues to expand relative to the point in the economic cycle, its importance accelerating since 2008, and part-time labour has grown at twice the rate of full-time labour throughout both the last cycle and over the long term. There are, of course, specialist temporary recruiters, but the part-time market appears relatively untapped (at least by the quoted companies) despite being c.5x the size of the temporary segment in terms of numbers.
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19 Jun 17
Byotrol* (BYOT): EPA approval – now to exploit the IP (CORP) | Trifast^ (TRI): Currency drives results ahead of expectations. (BUY) | Water Intelligence* (WATR): Growth continues to accelerate (CORP) | Wentworth Resources (WRL): Operational update (BUY) | Imaginatik* (IMTK): Proposed placing (CORP) | iomart* (IOM): Textbook delivery (CORP) | Telecom Plus (TEP): Sturdy prelims, future growth (BUY)
WATR BYOT TRI WRL IOM TEP ABAL
13 Jun 17
Motif Bio (MTFB): Remain positive on REVIVE-2 readout (BUY) | LiDCO* (LID): US FDA approves latest monitor (CORP) | Zambeef* (ZAM): Still not firing on all cylinders (CORP) | Cambridge Cognition* (COG): Speech recognition clinical trial software (CORP) | Water Intelligence* (WATR): locking in growth potential (CORP) | Shoe Zone (SHOE): Disappointing H1 (HOLD) | Minds + Machines* (MMX): Valuing renewals (CORP) | Intercede* (IGP): Prelims on track (CORP)
WATR MTFB LID ZAM COG SHOE MMX IGP
07 Jun 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. ScotGems—Admission due 26 June. Seeking £50-£100m. To investing in a diversified portfolio of Small Cap Companies listed on global stock markets 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. Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe
WATR SAR NBI SHRE MMX SAA SGZ DIS SYS BOOM
07 Jun 17
Water Intelligence* (WATR): Building a market leader (BUY) | Mortice* (MORT): Contract wins (CORP) |Avacta* (AVCT): Momentum building… Two reagent licences (CORP) | Revolution Bars (RBG): Forecast downgrades (BUY) | Shanta Gold (SHG): Completion of US$10.0m equipment financing (BUY) | Artilium* (ARTA): Small customer-base acquisition (CORP)
WATR MORT AVCT RBG SHG ARTA
22 May 17
Hardide* (HDD): Interim results, oil recovery and aerospace approvals bode well (CORP) | Premaitha Health* (NIPT): Trading update (CORP) | Akers Biosciences* (AKR): Q1 results (CORP) | Water Intelligence* (WATR): Growth strategy on track in a large, defensive market (CORP) | Frontier Developments* (FDEV): Elite Dangerous coming to PS4 (CORP) | K3 Business Technology* (KBT): Trading update (CORP)
WATR YGEN FDEV KBT AKR HDD
16 May 17
We have run our new quantitative Slide Rule over the Support Services sector. Of the c.500 stocks we have ranked on a Quality, Value, Growth and Momentum basis in the small to mid-cap space, 21 Support Services stocks appear in the top 100. Fulcrum leads the pack, ranked no. 6 out of 500 (and not coincidentally our top pick for the year), closely followed by Brainjuicer (no.7), Sanne (no.8), Learning Technologies (no. 12) and Next Fifteen (no.16). These stocks have high ROCE on both an EBIT and cash basis, strong growth prospects, earnings and share price momentum and valuations that, in this context, remain attractive. At the other end of the spectrum, HSS, Management Consulting, Serco, Mitie and Lakehouse appear towards the bottom of the rankings. Strong returns could, of course, be made if any of these turn their fortunes around, and management has been changed at Lakehouse, Serco and Mitie.
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10 Mar 17
Small Cap Breakfast
GBGI—Schedule One from the integrated provider of international benefits insurance focused on providing tailored insurance products. Looking to raise £32m with admission expected 22 Feb. Arix Bioscience — Intention to float on the main market from the global healthcare and life science company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management Ramsdens Holdings –Schedule One from the financial services provider and retailer, operating in the core business segments of foreign currency exchange, pawnbroking loans, precious metals buying and selling and retailing of second hand and new jewellery. Expected admission to AIM 15 Feb raising circa £15.6m. Expected mkt cap £26.5m.
WATR PRM NBI FARN NSCI WSBN ARS CYAN SSY
09 Feb 17
Cello (CLL): Leveraging technology, investing for growth (BUY) | Water Intelligence* (WATR): Contract win evidences strategic progress (CORP) | Europa Oil & Gas* (EOG): Holmwood farmout (CORP) | Ithaca Energy (IAE): Takeover by Delek (BUY) | Frontier Developments* (FDEV): Initial details of third franchise (CORP) | BATM* (BVC): Diagnostic lab acquisition (CORP) | Orchard Funding* (ORCH): Strenghtening the model (CORP)
WATR CLL EOG IAE FDEV BVC ORCH
06 Feb 17
Quixant* (QXT): Gaming gains (CORP) | SCISYS* (SSY): Bringing good news from Germany (CORP) | Hayward Tyler Group*: Contract wins (CORP) | Sound Energy (SOU): TE-7 flow rate and fund raise (BUY) | Water Intelligence* (WATR): Growth and improving returns in a defensive market (CORP) | Imaginatik* (IMTK): Interim trading update (CORP)
WATR QXT HAYT SOU SEE KBT NET SSY ABAL
24 Nov 16