Avacta (AVCT): Corp COVID-19 test – manufacturing partner appointed | D4T4 Solutions (D4T4): Corp H1 is in line with expectations; offering good value | STM (STM): Corp Implementing the plan amid an uncertain backdrop
Companies: AVCT D4T4 STM
The FY 2020 results are in line with our expectations and reflect the impact of the previously announced switch from large perpetual licences to recurring annual term licences during the year. Despite the COVID strictures, with its large global partnerships, D4t4 continues to close numerous lucrative data gathering and data management contracts with major blue-chips around the world. It is successfully converting a high proportion of its new sales to recurring revenue contracts, but this will sacrifice growth and earnings in FY 2020 and FY 2021. Nevertheless, with growing recurring revenue base, an exciting pipeline and a very strong balance sheet, D4t4 is very well positioned for continued long-term growth and security.
Companies: D4t4 Solutions Plc
Cambridge Cognition (COGC.L): Corp | D4T4 Solutions (D4T4.L): Corp | Filtronic (FTC.L): Corp | Robinson (RBN): Corp | Solid State (SOLI): Corp
Companies: COG D4T4 RBN SOLI FTC
Avacta (AVCT): Corp Potential COVID-19 therapeutic | D4T4 Solutions (D4T4): Corp Celebrus v9.2 offers embedded machine learning | Sopheon (SPE): Corp COVID-19 trading update
Companies: AVCT D4T4 SPE
Avacta (AVCT): Corp | D4T4 Solutions (D4T4): Corp | Real Good Food (RGD): Corp | SRT Marine Systems (SRT): Corp
Companies: AVCT D4T4 RGD SRT
The YE trading update reveals that management has actioned its proposed switch from a perpetual licence to a SaaS business during FY 2020. We therefore adjust our forecasts as moving customers from one-off perpetual licence contracts to recurring revenue contracts takes longer to implement and revenue is recognised over a longer period. Despite COVID-19, D4t4 made good progress in Q4 since the January update (with its own raft of contract wins), and several more contracts have been secured on a multi-year ‘as-a-service’ basis, providing additional recurring revenue visibility (now 46% of total sales) over the next three years. Management does not expect any significant interruptions in customer service or its distribution channels. However, actions taken to mitigate the impact of the virus include home working; preserving cash; and securing additional liquidity from the bank if required. The final dividend and FY 2021 forecasts are under review, however the £0.5m share buyback programme continues.
Companies: TEK AVCT D4T4 DGOC IHC SDX PPH ENET NTOG SFE
D4T4 Solutions (D4T4): Corp Management confidence in the H2 pipeline is validated | Flowtech Fluidpower (FLO): Corp Year-end trading update: weaker Q4 trading | Gateley (GTLY): Corp High ROCE; strong cash flow while investing for growth | Telit (TCM): Corp FY 2019 beats forecasts and points to a bright future
Companies: D4T4 FLO TCM GTLY
Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale. The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m. Due 28 February. Investment firm Nippon Active Value fund is seeking to raise up to £200m at an issue price of 100p per share via an IPO. The company aims to invest in a portfolio of quoted Japanese stocks with market capitalisations of up to $1bn. First day of dealings expected early February.
Companies: MJH FIPP PGH BOOM TPFG OSI D4T4 OMG SAV RMM
As noted in the trading update, H1 was in line with expectations. It highlighted that this year will be particularly H2-weighted, with £8.8m sales in H1 delivering a small Adj. PBT. The expectation of a record H2 is underpinned by substantial annual contract renewals from licences signed in H2 LY; strong visibility on new contracts due to initiate in H2; and a significant pipeline of new business in negotiation with existing clients who continue to derive substantial benefits from D4t4’s data management solutions. We reiterate our FY forecasts and TP.
Cambridge Cognition (COG): Corp eCOA contract worth $225,000 | City of London Group (CIN): Corp Harvest time | D4T4 Solutions (D4T4): Corp H1 as expected but with growing SaaS prospects | Gateley (GTLY): Corp Double-digit sales growth in H1 | Intercede (IGP): Corp Costs, tick, now for revenue | Omega Diagnostics (ODX): Corp Grass allergy test – first of screening assays | Wameja (WJA): Corp Strong Q3 momentum on the HomeSend network
Companies: COG D4T4 WJA IGP ODX GTLY CIN
Bioventix (BVXP): Corp FY 2019 results – signs of troponin progress | D4T4 Solutions (D4T4): Corp H1 meets expectation and a record H2 is forecast | President Energy (PPC): Corp Acquisition and subscription
Companies: BVXP D4T4 PPC
Arcontech (ARC): Corp Strong FY19 results, strong structural position | D4T4 Solutions (D4T4): Corp AGM update | Sopheon (SPE): Corp Strongest ever pipeline accompanies SaaS transition
Companies: D4T4 SPE ARC
Spotify stock dropped over 1% on a Bloomberg report that Apple plans to fund its own original podcasts. Apple executives have reached out to media companies to buy exclusive rights to podcasts, according to the report. Amazon has a promotion for US shoppers on Prime Day, the 48-hour marketing blitz that started Monday: Earn $10 of credit if you let Amazon track the websites you visit. The catch, as Amazon explains in the fine print, is the company can use this data to improve its general marketing, products and services, unrelated to the shopping assistant. Curve, the London-based “over-the-top banking platform,” has raised $55 million in new funding. The start-up lets you consolidate all your bank cards into a single Curve card and app to make it easier to manage your spending and access other benefits. The new round of funding values Curve at $250 million and will be used by the company to continue adding more features to its platform and for further European expansion.
Companies: BGO BOKU EQLS TECH BOOM D4T4 EYE
Armadale Capital (ACP): Corp Mahenge Liandu project update | D4T4 Solutions (D4T4): Corp FY 2019 beats forecast as earnings quality grows | Kingswood Holdings (KWG): Corp Lining up opportunities, getting ready to execute | Morses Club (MCL): Corp AGM statement | Pelatro (PTRO): Corp AGM statement confirms 2019 is on track | Redcentric (RCN): Corp Prelims – cash is king | Tri-Star Resources (TSTR): Corp Annual results 2018
Companies: ACP D4T4 RCN PTRO TSTR KWG
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LoopUp has announced a very strong H1 period, in line with the previous trading update and reflecting a number of months of exceptional performance. This is allowing the business to invest in the major identified new opportunity, to provide telephony within Microsoft Teams, where the early signs are extremely positive. We look forward to further detail on the Teams pipeline and sales levels over time.
Companies: LoopUp Group plc
Covid has accelerated the digitisation of all things physical. No more so than in the €10 trillion global construction industry, which some experts reckon has 5 years of catching up to do. A non-insignificant task (eg Crossrail & HS2) that could take decades to play out, but equally realise 100s of £bns of cost, time & productivity savings annually. The €8bn BuildTech sector (10%+ CAGR – see below) is at the heart of this transformation. Providing the glue & ‘digital twins’ that bind all the inter-connected ‘property lifecycle’ parts together – eg CAD/CAM (design), project mgt, visualisation, AI, asset maintenance (operate) and BIM (Building Info Modelling).
Companies: Eleco Plc
ZOO has provided a short trading update to accompany its AGM which will be held later today. The business is performing well…double-digit revenue growth y/y across H1 is clearly a strong result given the market disruption, and is tracking very well towards our full-year figure. We make no changes to estimates (which we reinstated in July) but will consider revisiting them at the time of the H1 results in early November.
Companies: ZOO Digital Group Plc
As flagged in the July trading update, the Eleco group (formerly Elecosoft) has delivered impressive first half financials in the face of the global pandemic. However, the results are somewhat overshadowed by the retirement of Executive Chairman, John Ketteley, after 23 years in the role. The COO, Jonathan Hunter, takes over as CEO and the Deputy Chairman, Serena Lang, steps up to Chairman. Both are very experienced and offer safe hands to guide Eleco forward through the unprecedented conditions of COVID-19. In the early stages of the pandemic, the group demonstrated its resilience as H1 revenue slipped just 4% YoY with 57% revenue being recurring. Moreover, benefiting from reduced cost of travel and marketing, H1 adj. PBT rose 12% YoY to £2.2m. The profit uplift was matched by strong cashflow, improving net cash from £1.1m at YE to a very healthy £4.4m at the end of June. Forecasts remain under review due to uncertainty in the COVID-19 environment, but Eleco continues to be well positioned – not just to weather the storm of pandemic, but to deliver a strong financial performance across the full year.
Given that Pelatro has visibility of over $5m of revenue for FY20E, we are leaving our forecasts unchanged following the interim results. The pipeline is strong and we are cognisant that the mix of business signed in H2E will have a proportionate impact on reported performance this year. Pelatro is trading at the lower end of its 12-month price range which creates a buying opportunity.
Companies: Pelatro Plc
Actively managing the business successfully through the consequences of COVID-19, Ideagen finals to end April are in line with the May trading update and unchanged expectations: EBITDA of £18.5m as expected, revenue of £56.6m (£56.0mE originally), and robust free cash flow of £10.1m robust even after COVID restructuring costs, leading y/e net debt of £16.8m (0.9x net debt/EBITDA), as expected. Rapid and effective action to accommodate the consequences of lockdown maintained the quality of business, still achieving 5% organic growth, on top of three acquisitions in the period, to deliver 21% headline revenue growth. Once again, expectations were exceeded for recurring revenue, increasing from 74% at 1H20 to 76% (FY19: 67%): target recurring revenue had already been lifted from 75 to 80% by FY22 – and the horizon is now extended to 85% by FY23. FY19 acquisitions are all now integrated in line with the 72-step efficient process; organic growth is maintained even during a pandemic; trading since year end is robust; and the acquisition pipeline still remains active. With the success of the formula evident in its execution, and the benefit of future acquisitions unmodelled, we lift our target price to 235p (220p).
Companies: Ideagen Plc
LoopUp recently unveiled a major extension to its ambitions – the group is aiming to become a leading global provider of telephony “inside” Microsoft’s Teams product. The opportunity is clear and growing, as enterprise customers look to use Teams for “normal” external phone calls, and LoopUp seems well placed to deliver a differentiated offering using its existing infrastructure and knowhow. In this document we provide an overview of the new platform and explain its strategic significance.
Ideagen is a leading supplier of information management software, specialising in Integrated Risk Management (IRM) solutions to highly regulated industries. Consistently recognised in the Gartner Magic Quadrant since 2016 for its solution set, Ideagen has developed a best-of-breed IRM suite through a blend of internally driven R&D and strategic acquisitions, earning the group significant presence in its core markets. Our mantra remains that the three certainties in life are death, taxes and regulatory compliance – Ideagen is positioned to grow from strength to strength, as organisations worldwide are faced with increasingly demanding regulatory standards, and the requirement to provide a referenceable trail of accountability. As the group embarks on its twelfth consecutive year of growth, coupled with the potential upside of inevitable acquisitions, we believe Ideagen is poised for ongoing acceleration into the coming years.
Interim revenue to June is in line with 1H19 including the benefit of Celtech (acquired April 2019). Recurring data services revenue grew 19.9%, while elements of implementation suffered from COVID-19: Services and Installation -4% and Consultancy & Maintenance -10%. A focus on cost control resulted in furloughed staff (now returned to work) from a larger cost base than 1H19 after the Celtech integration, and some August redundancies in areas where customer activity has reduced and will likely stay low. Nevertheless, the group won significant business in the period from several major customers as a well as a new Outdoor Payment Terminal contract. A pipeline of £12.5m for 2H20 offers typical 2H strength for the group, derived from recurring revenue and the visible order book, subject to obvious concerns about the ability to implement projects. Net cash (excl. IFRS16) of £1.6m includes gross cash of £4.1m and gross bank debt of £2.5m, with £1.5m headroom in the undrawn April 2023 bank facility.
Companies: Universe Group Plc
Instem has delivered strong H1 20A results in our view. Despite the backdrop of COVID-19, all three business areas continue to perform well. Notably, the Informatics business made particularly impressive progress in the period. Management commentary on the outlook is positive and we maintain headline forecasts following the announcement. In addition, we increase our forecast FY 20E closing net cash position by £1m. This reflects revised assumptions on working capital movements in the second half.
Companies: Instem Plc
Salarius Ltd. (91.7% owned by TEK) has signed a distribution agreement with FXM Ingredients Inc. to distribute MicroSalt® in Mexico and Latin America.
Companies: Tekcapital Plc
ZOO Digital is one of the companies whose business models have stood it in good stead during the COVID-19 pandemic; its cloud-based platform has proved to be a key attribute over the last six months. Indeed, the changed working practices within the dubbing industry have helped to educate more potential users about the benefits of remote operating and the quality of performance that can be achieved when using the ZOOdubs platform. In our view, ZOO’s Capital Markets Day (CMD) presentations - a recording is available here - achieved a rare combination of being both informative and clear as to those operational benefits and the financial implications (a roadmap to U$100m of revenue) for the Group within an evolving market. We highlight some of the main messages from the speakers – from outside the company in several cases – which covered the market for localisation services, the use and benefits of ZOO’s platform and the technology behind the service.
The launch of LiveData Migrator with AWS represents another big step forward for WANdisco. Aside from diversifying the sales base, it suggests that the company’s technology is becoming the established way to migrate large, active datasets to the cloud. Disappointing H1 financials and a delay in the ramp of Azure revenue from Q3 to Q4 leads us to cut our FY20 forecasts. However, Q4 should see a big uplift in financial performance and our newly introduced FY21 forecasts see sales rising to $37m.
Companies: WANdisco Plc
Watchstone has this morning released interim results to 30 June 2020. During the first six months of the year, the group returned a total of £50.5m/110p per share in cash to shareholders, with a further £18.4m/40p per share post period end in July. The H1 2020A underlying EBITDA loss stood at £1.4m, which excluded Watchstone's only remaining operating business, ingenie, held within discontinued operations. Encouragingly, ingenie saw a much improved trading performance in the six month period, with revenue increasing by £1.5m to £4.8m and the post-tax loss in the period reducing to £0.7m from a £1.8m loss in the comparative period. The net cash position as at 25 September 2020 is reported to have stood at £17.2m (including £2.0m held in escrow), equivalent to 37p per share. Importantly, the Board is ‘confident of returning further cash sums to shareholders in due course'.
Companies: Watchstone Group Plc
Crimson Tide has reported a strong set of H1 results evidencing very strong sales momentum backed by long-term contracts and cash flow. H1 sales grew by 40% and EPS by 154%. Net cash has improved to £0.8m at June 2020 from nil at December 2019. The strategic focus on transportation and supermarkets is working well, partnerships are improving routes to market, and there is growing traction from investments in innovation. We have left our forecasts unchanged for now, but recognise positive pressure and have upgraded our target price from 3.1p to 4.3p. We reiterate our view that Crimson Tide’s valuation will be dictated by its ability to convert the significant opportunity rather than short-term metrics. H1 results show the group is nicely on track to do exactly that.
Companies: Crimson Tide Plc