Initial Equity Trading Comments - 19 February 2024

Asos sees another year of contracting sales

Asos ended its financial year (3 September 2023) with a lower-than-expected operating loss. The group expects sales in FY24 to continue to fall by 5%-15%. The new leadership will continue to focus on a recovery in profitability while sacrificing top-line growth. The group expects to return to positive growth by FY25. The updated outlook for FY24 onwards and the lack of meaningful progress on profitability to date remain a concern going forward.

Wet summer slowed the pace of recovery

Asos published weaker-than-expected year-end trading. The wet weather in July and August across many of the group’s markets, most notably the UK, has resulted in weaker sales and impacted the year-end cash flow. However, the group’s inventory level reduced 30% yoy and order profitability has improved by over 35%; both give the new financial year a favourable start. We are still waiting for more evidence on profit improvement.

Back to profitability

Asos has returned to profitability in P3 23 (3 months to end May), despite the top-line decline of 14% thanks to deliberate actions on capital allocation to improve profitability. The improved profitability has enabled the group to maintain H2 23 and FY23 guidance unchanged.

Initial Equity Trading Comments - 15 May 2023

Initial Equity Trading Comments - 10 May 2023

Hybridan Small Cap Feast - 10 Feb 23

10 February 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objec

Confident of delivering a significant improvement from H2 23

Asos reported a revenue contraction of 6% for the period from September to December 2022, impacted by the challenging trading environment (cost of living crisis and elevated return rate) and the strategic restructuring of the business. The group continues to expect an H1 23 loss owing to the challenging consumer environment. However, Asos is confident of achieving a significant improvement in profitability from H2 23, which will result in free cash flow generation of -£100m-£0m for FY23.

Fight to survive in the weakening consumer environment

Asos published its FY22 (ended August 2022) figures, impacted by the weaker consumer environment. The ongoing supply chain disruption and skyrocketing cost of living will continue to weigh on the group’s performance into the new FY23. The group announced a series of cost-cutting and business reorganisation measures, and increased financial flexibility through the renegotiation of core banking covenants to navigate the challenges of the year ahead.

Hybridan Small Cap Feast 19/10/22

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Ithaca Energy, a UK independent exploration and production company focused on the UK North Sea, intends to join the Premium Segment of the Main Market. Ithaca Energy is one of the largest independent oil and gas companies in the UKCS, ranking 2nd by resources and 3rd by production. During the six months ended 30 June 2022, Ithaca Energy's average daily production (oil and gas) on a net work

Guidance cut on a continuing higher return rate

Asos has cut its FY22 guidance as shoppers return more clothes amid inflationary pressure. The group also continues to work actively against the ongoing global supply chain challenges. The FY22 top-line is expected to grow between 4%-7% vs .10%-15% previously Adj. PBT will be in a range of £20m-£60m vs. £110m-£140m.

Guidance maintained despite the inflationary pressure

The cost inflation and higher discounted activity along with the industry-wide supply challenges since last winter have negatively affected Asos’ profitability during the first half. Although the stock position for H2 has significantly enhanced, the group warned that the higher risk from inflationary pressure and the suspension of activity in Russia may weigh on the FY22 performance. So far, the group has maintained its FY22 guidance.

Audioboom Group - Q1 24 revenue growth of +11%, FY24E forecasts reiterated

Audioboom’s FY23 results and Q1 trading update show Q1 24 revenue growth of +11% yoy, $6.7m of March 2024 revenue marking the platform’s highest revenue month since May 2022, and a confident outlook that leads us to reiterate our FY24E forecasts. Following the focus on new initiatives through FY23, the platform is now in its strongest ever operational position, with a record 1.1bn monthly ad impressions created in March 2024, record global audience reach of 38.6m unique global listeners in Janua

Alphawave Semi: FY23 trading update, amended forward guidance

Alphawave Semi has reduced guidance for FY23 and prospectively citing lower revenues from China, changes in expected revenue recognition from long-term contracts, and continuing investment in R&D. The share price has reacted negatively, giving up most of the gains since the trading statement at the end of January. Current consensus, which is a good match for pre-existing guidance, should be reduced, most likely following release of the FY23 results and full 1Q24 trading update due on 23 April. H

Crimson Tide - FY23 reports +15% revenue; investment phase complete

Crimson Tide has reported FY23 results to December in line with expectations, with additional operating leverage benefitting updated FY24 and maiden FY25 and FY26 forecasts. FY23 delivered +15% revenue growth to £6.2m at 86% GM, of which over 90% is recurring, and maintained £5.8m ARR even after unexpected customer churn in the year as we previously noted. Crucially, the Group achieved milestone adj EBITDA profitability of £0.4m at 7% EBITDA margin, and edges closer to adj PBT profitability expe

Morning Note – 16 April 2024

Devolver Digital (DEVO LN) - Rebuild year

Devolver Digital encouragingly delivered 2023 results slightly ahead of expectations and provided a steady medium-term outlook that leads us to reiterate our 2024 Adjusted EBITDA estimates. Longer term, the company is now planning to further develop its two major planned titles, Human Fall Flat 2 and System Era's next major new release. We now expect those major titles to be released in 2026 rather than 2025, meaning we lower our 2025 Adjusted EBITDA forecast to $10.6m from $17.6m but introduce

Morning Note – 15 April 2024

Checkit - New product launch and contract wins

Checkit has won contracts with two customers worth at least £417k over the three-year lives of the contracts, confirming its ability to upsell to its existing customer base and supporting our forecasts. Having trialled the new technology with multiple customers, Checkit has launched its Asset Intelligence module, which uses advanced analytics and machine learning to enhance customer sustainability, reduce costs and increase revenue.

Soft growth patch

Auction Technology Group - H1/24 Trading update

ATG’s H1/24 trading statement indicates revenue for the six-month period to 31 March 2024 was $86m, a 6% increase on H1/23 (1% organic growth), helped by the addition of the EstateSales.Net (ESN) marketplace last year, which performed well in the period. Total marketplace revenue increased 2% (organic), driven by growth in value-added services (VAS) and event fees, offsetting a decline in commission revenue (mainly through lower asset prices).

Morning Note – 17 April 2024

Touchstar - Full year results: Recurring revenue strategy delivers further profit growth

Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning's full year results reflect the outcome of a multi-year strategy coming to fruition for the group, with recurring revenue growth of 8.7% delivering overall revenue growth of 7.1% and in turn a 60% increase in PBT to £0.7m. Over the past few years, Touchstar has focused on enhancing the returns from their product offering through a shift towards recurring software licen

It’s not what you sell, it’s the way that you sell it

This report is intended to help UK small- and mid-cap investors gain a better understanding of software companies’ routes to market, and to highlight how one of the most important facets of the way in which they grow and deliver value is routinely ignored.  We examine sales processes for six UK-listed companies and one that has recently been taken over, and consider why they have followed their respective paths.

Engage XR Holdings - Expanding from FY23, FY24E forecasts reiterated

ENGAGE XR’s FY23 results show revenue and net cash in line with the February trading update, EBITDA ahead at -€4.0m vs -€4.5m due to the split of cash outflow between opex and working capital, and a confident outlook that leads us to reiterate our FY24E forecasts. FY23 revenue for the core ENGAGE platform was unchanged vs FY22 at €3.3m, as H2 23 revenue was impacted by the record seven-figure contract announced in February shifting to 2024, and several enterprise customers scaling back renewals

LIBERUM: Cirata plc: Cirata from the flames

FY23 results in line – and a flying start to FY24

ENGAGE XR has published its FY23 full year results, the headlines of which reflect the details provided in February’s post close trading update in terms of revenue, EBITDA loss and net cash. ENGAGE XR has signed a rapidly growing number of strategic and commercial partnership agreements with companies invested in promoting the VR medium and the development of corporate metaverses.