Morning Note – 13 September 2022

Eleco - Robust 1H22 performance during SaaS transition

The specialist construction software supplier has released its full June Interims in line with the July update, and we remain confident in FY22 forecasts and our 160p TP. As expected, while transitioning to SaaS, there was little change in headline sales (flat at constant currency), but good growth in recurring revenue as Eleco shifts from large perpetual licences to more secure SaaS subscriptions. On the back of that, recurring revenue grew +9% yoy to over 60% of the total, with UK and Swedish

Morning Note – 27 July 2022

Morning Note – 25 May 2022

ARR climbs 8% LFL, with YTD PBT in line with ests

Eleco is transitioning into a highly cash generative & profitable SaaS winner. April YTD recurring revenues have climbed 8% to £5.4m (vs £5.0m LY) - representing approx. 60% of group sales vs 54% LY. As anticipated, this growth was offset by a similar decrease in software licenses/services. Hence total turnover at £8.9m was flat in constant currency terms, & slightly down (4%) vs LY’s £9.3m - reflecting forex headwinds (eg SEK - £). Equally though, April YTD adjusted PBT is tracking our £2.9m

‘Grow baby grow…’

Eleco delivered ‘in line’ results today, posting adjusted EBITDA & EPS of £7.2m & 4.0p respectively on record turnover up 8.4% to £27.3m (+7.7% vs FY19). This was further bolstered by 100% cash conversion (£4.75m, representing a 5.7% yield), whilst ending the period with a hefty £10m net cash balance (12p/share) – even after spending 12% of revenues on R&D. Eleco’s award winning applications are being increasingly adopted by construction firms, asset/property managers, manufacturers and retaile

Morning Note – 31 March 2022

Eleco - FY21 growth in all areas builds a platform for SaaS transition

The Built Environment software specialist delivered a strong FY21, beating our expectations. It was led by double-digit growth in its core Building Lifecycle Management (BLM) portfolio, most notably in ShireSystem facilities management solutions. This is a return to growth after a hiatus in FY20 due to the pandemic, and is a credit to the refreshed management team which restructured group operations and introduced a popular new SaaS/subscription sales model. Margins held up well despite sales in

Morning Note – 7 February 2022

Time to buy the dip

Eleco is an IRP-rich firm that is trading at an unjustified discount to peers (2.4x fwd EV/sales vs 7x sector), that is also benefitting from powerful, secular tailwinds (eg digitisation of all things construction/property related). They announced this morning that FY21 EBITDA would hit £7m – 11% above our £6.3m forecast - on turnover up 8% on a LFL basis to £27.3m (£25.2m LY & ED £26.8m). This is driven by an 8.5% jump in recurring revenues to £15.4m with standout performances from ShireSystem

Morning Note – 25 January 2022

‘All systems go’ at super-durable, BuildTech stock

Super-durable, high margin growth stocks are rare. BuildTech software developer Eleco is one, having emerged from 2020 in fine fettle and is currently ‘going like a train’. Saying today that H1’21 turnover jumped 13% to £13.8m vs LY (£12.2m) and +8.8% vs H1’19 (£12.7m). With LFLs accelerating sequentially from 9% in Q1 to c. 17% in Q2 (re partly reflecting catchup end-user training), alongside adjusted EBIT (margin 19.7% vs 19.4%) climbing +15% to £2.7m, despite absorbing £1.6m of R&D (£795k cap

Morning Note – 15 September 2021

Cenkos: LoopUp Group Plc -Transfer agreement brings strong cash flow

LoopUp has assumed a book of conference service contracts from a US competitor for no initial outlay. This book will yield operating cash flow of c£5m on an annual basis. Together with the renegotiated banking facilities secured earlier in the year, the Group's enhanced cash flow and headroom in its facilities will position the company well for FY23E and we upgrade the stock to Buy.

LIBERUM: Bango* - Good progress on all fronts

Upgrades on contract wins

Gresham announces contract wins today that cause it to expect FY22 revenues and earnings to be ahead of expectations. The first is a £1m over 5 years Clareti deal to replace a legacy incumbent solution for one of Europe’s largest privately owned banking and financial services groups (new logo). The second comprises renewals and extensions across a broad array of products and services with Gresham's largest customer, ANZ. Furthermore, management expects to close further subscription business in Q

Hybridan Small Cap Feast 06/10/22

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** TECC Capital plc, to be renamed EDX Medical Group, intends to join the AQSE Growth Market. EDX operates a molecular biology and diagnostics laboratory in Cambridge, UK, from which it performs research & development, provides Polymerase Chain Reaction (PCR) testing and genomic sequencing services, undertakes quality assurance and has established expertise in the design, development, validati

Hybridan Small Cap Feast 28/09/22

Joiners: No joiners today. Leavers: Brewin Dolphin Holdings has left the Main Market. Caretech Holdings has left AIM. What’s cooking in the IPO kitchen?** Streaks Gaming plc, a UK-based provider of conversational gaming products intends to join the Standard Segment of the Main Market this autumn. The flotation is expected to value Streaks at approximately £10.2m (pre-money) and will make it the first LSE-listed "pure-play" conversational gaming company. Raising between £5-10m. Independent Living

Hybridan Small Cap Feast 05/10/22

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** TECC Capital plc, to be renamed EDX Medical Group, intends to join the AQSE Growth Market. EDX operates a molecular biology and diagnostics laboratory in Cambridge, UK, from which it performs research & development, provides Polymerase Chain Reaction (PCR) testing and genomic sequencing services, undertakes quality assurance and has established expertise in the design, development, validati

Hybridan Small Cap Feast 04/10/22

Dish of the day Joiners: Milton Capital plc (MII.L) has joined the Main Market. Leavers: No leavers today. What’s cooking in the IPO kitchen?** TECC Capital plc, to be renamed EDX Medical Group, intends to join the AQSE Growth Market. EDX operates a molecular biology and diagnostics laboratory in Cambridge, UK, from which it performs research & development, provides Polymerase Chain Reaction (PCR) testing and genomic sequencing services, undertakes quality assurance and has established expertise

TPXimpact AGM Updated & Board Changes

TPXimpact has announced H1 trading was below expectations which will impact FY results and that Bjorn Conway and Steve Winters will succeed Neal Gandhi and Oliver Rigby as CEO and CFO, respectively

Cenkos: LoopUp Group Plc -- PGi extends cash runway

The PGi book of business transfer goes live on 1 October 2022. This transaction will boost the Group's cash flow over the next two years, albeit on a slightly deferred basis in FY22E given monthly billing in arrears and normal collection cycles. LoopUp has raised £3.5m of new equity to help finance its working capital during the transition period and invest further in its growing Cloud Telephony division.

Cash runway extended, multiple near term opps

The incoming new management team at Trellus has acted swiftly to reduce cash burn, extending the runway to early 2025. The company is now transitioning to a revenue-generating business, with the first paying members enrolled post-period end and multiple near term commercial opportunities across its D2C and B2B2C offerings in the advanced stages of finalisation. These should unlock access to substantial patient populations, accelerating adoption of the platform, commercialisation and, ultimately,

Morning Note – 7 October 2022

Hybridan Small Cap Feast 21/09/2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Independent Living REIT plc, intends to float on the Premium Segment of the Main Market. The Company's investment objective is to address the shortage of high-quality supported housing, delivering capital growth and inflation-linked income returns for its investors whilst providing a fair deal for society through savings for the UK taxpayer, and improved outcomes for residents. Raising £150

Hybridan Small Cap Feast 27/09/22

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Streaks Gaming plc, a UK-based provider of conversational gaming products intends to join the Standard Segment of the Main Market this autumn. The flotation is expected to value Streaks at approximately £10.2m (pre-money) and will make it the first LSE-listed "pure-play" conversational gaming company. Raising between £5-10m. Independent Living REIT plc, intends to float on the Premium Segme

AGM: Strong cash generation prompts dividend hike

The strong organic cash flow of FYMar22 has continued into the first half of FY23. With the last of the earn-outs paid out in July and with a high recurring revenue profile (74%/sales) AdEPT is hiking its dividend. We now forecast 5.0p for FY23 from 3.0p, which is a yield of c. 4.5%. The increased pay-out remains consistent with the programme to deleverage the balance sheet. AdEPT still expects net debt/EBITDA to fall below 2x within 12 months and remains well within its covenants. Management ta

SHORE CAPITAL - musicMagpie+ (MMAG) - House Stock at 28p - Tough trading persists in Q3 - downgrades