Hybridan Small Cap Feast - 15 Jun 23

15th June 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 objecti

GB Group - Termination of coverage

Edison Investment Research is terminating coverage on Doctor Care Anywhere (DOC), Argentex Group (AGFX), Newmont Corporation (NEM), GB Group (GBG), Abliva (ABLI) and TIE Kinetix (TIE). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

GB Group - H123 performance masks strategic progress

GB Group (GBG) reported a mixed performance in H123: strong growth in its Fraud and Location businesses was offset by weaker performance in the Identity business resulting in pro forma constant currency revenue growth of 3.4% y-o-y. Cryptocurrency headwinds and slowing economic growth drive downgrades to our Identity revenues and normalised EPS forecasts. Integration of Acuant is now complete and GBG is showing early signs of leveraging Acuant’s products and technology across the group.

GB Group - FY23 outlook maintained

GB Group’s (GBG’s) H123 trading update confirmed strong growth in its Fraud and Location businesses, offset by weaker growth in the Identity business. Pro forma revenue growth of 10% included a 6.5% currency benefit. While the board maintains its expectations for FY23, we have trimmed our forecast to reflect the weighting of growth across divisions, reducing our normalised EPS forecast by 1.7% in FY22, 1.2% in FY23 and 1.3% in FY24.

GB Group - Maintaining FY23 outlook

GB Group’s AGM trading update confirms that the Fraud and Location businesses have seen solid underlying growth year-to-date. A tough comparative period for the Identity business has been partially offset by the favourable US dollar translation effect. With broad geographic coverage and the need for identity and fraud solutions across different sectors and economic cycles, the board anticipates FY23 results in line with its expectations, despite current economic uncertainty.

GB Group - Capitalising on recent strategic investment

GB Group (GBG) reported strong underlying revenue growth for FY22 while profitability growth reflected the resumption of investment in the business. GBG has demonstrated the ability to navigate challenges with its performance over the COVID-19 pandemic and we view its diversified business (by geography and vertical) as a strength in an uncertain market environment. Our forecasts are substantially unchanged and in our view the valuation has become increasingly detached from the company’s growth p

GB Group - Strong H2 performance drives upgrades

GB Group (GBG) expects to report revenue and adjusted operating profit for FY22 well ahead of our and consensus forecasts having seen a strong performance across all three divisions in H222. We have raised our forecasts to reflect this strength, with EPS upgrades of 5.4% for FY22, 1.9% for FY23 and 1.6% for FY24. In our view, there is a widening discrepancy between the company’s growth potential and its valuation.

GB Group - Strong organic growth in H122

GB Group (GBG) reported a strong performance in H122, with organic constant currency revenue growth of 12.6% y-o-y and an adjusted operating margin of 25.5%. The Acuant acquisition completed on 29 November and the group’s immediate focus is on combining the two companies and pushing forward with growth plans. Our forecasts are substantially unchanged.

GB Group - Accelerating growth with Acuant acquisition

GB Group (GBG) has announced a conditional agreement to acquire Acuant, a leading player in the US identity verification market. At an enterprise value of £547m, it marks GBG’s largest acquisition to date. The deal strengthens GBG’s position in the US, broadens its product offering and accelerates its technology roadmap. We have revised our forecasts to reflect the placing and the acquisition and our normalised EPS forecasts decline 3% in FY22, are flat in FY23 and increase 3% in FY24.

Altitude Group (ALT LN) - Delivering on high growth strategy

Altitude’s FY24 results, flagged in a trading update last week, confirmed strong growth in revenue, adjusted EBITDA and adjusted EPS. We remain confident in the Group continuing its fast growth, based on strong momentum seen in Merchanting in Q1 FY25. Reflective of the evolving business profile, we have updated our model assumptions, adjusting revenue slightly, improving margins and lowering tax charges, which leaves adjusted EBITDA unchanged and, importantly for investors, increases adjusted EP

Telematics and fleet management: Microlise vs. Quartix Technologies

The UK AIM market has three quoted commercial vehicle tracking businesses: Microlise Group (SAAS), Quartix Technologies (QTX); and Trakm8 Holdings (TRAK). This note focusses on the larger two, Microlise and Quartix, initiating research coverage on each and comparing respective business models, strategy, growth opportunities and valuation. Whilst the businesses generally target different parts of the market, our conclusion is that Quartix offers better near-term value, cash returns and ROCE, whil

Hardman & Co Monthly: October 2024

Feature article: Labour’s first Budget - Investors in their sights? Summary ► Budgets are always important for investors. ► The imminent Budget, at the end of October, will be doubly so, because it is the first from the new Labour government, and it has already signalled the need to fill an alleged £22bn black hole, while ruling out changes to more than half the tax base. That implies a lot of the pain will be felt by investors. ► This paper considers the impact of increases in rates for th

Morning Note – 30 September 2024

Pinewood Technologies (PINE LN) - Full speed ahead

Pinewood Technologies’ H1 results, its first as a standalone SaaS business, show that the Group is putting the building blocks in place for its accelerated growth plan. New UK Lithia sites are being added, product and sales team investment is being made, and the discovery and planning stages of the US rollout are underway. Management is confident in meeting full year market expectations (£7.8m underlying PBT for the 11 month FY24 period), so our underlying P&L estimates are unchanged. We reiter

Neuromorphic Computing Industry Research October 2024

This report looks at the neuromorphic computing industry. Neuromorphic Computing systems are designed to specifically mimic the human brain. The report talks about the overall market size, expected growth rates as well current trends driving the growth in the industry. Companies can also be categorized as core and non-core, the former being those that exclusively engage in neuromorphic computing solutions and those for which neuromorphic computing is just one part of their overall product or ser

Morning Note – 6 August 2024

Hybridan Research 12/03/2024 - Crossword Cybersecurity: Final deferred payment for Threat Status acquisition

Crossword Cybersecurity announced today that it is issuing 7,749,226 new ordinary shares in respect of the second anniversary deferred acquisition of £450k for the acquisition of Threat Status (announcement dated 14 March 2022). The consideration shares, which are subject to a 12 month lock-in, have been issued at the preceding three-month average price of 5.81 pence per share. In addition, £125k consideration is payable in cash. Total consideration payable on the second anniversary following co

Allenby Capital TMT Update - 30.09.24 - MWE.L, CHSS.L, MIRI.L, ENET.L, ELEG.L, MBT.L, PPS.L, ITIM.L

Please find below our weekly update covering themes that we feel that are of interest to investors and participants in the small and mid-cap TMT sector as well as commentary on recent newsflow.

Super sizing it

Hybridan Research: Crossword Cybersecurity plc: 15/07/22: On track to deliver 75% growth for 2022

Good Morning, Crossword Cybersecurity plc this week announced a trading update for the six months to 30 June 2022 and the extension and increase of several Convertible Loan Notes issued in December 2019. We have published research on this which is attached and a snapshot of the research is below. The cybersecurity solutions company has this week announced a trading update for the six months to 30 June 2022 and the extension and increase of several Convertible Loan Notes issued in December 2019

Hybridan Research: 23/09/22: Crossword Cybersecurity plc (CCS): £3.6m equity raise to fund topline growth to £6m in 2023

The cybersecurity solutions company focused on cyber strategy and risk, announces today that it has completed an oversubscribed fundraising of approximately £3.6m (gross) through a placing of 16,761,407 ordinary shares at a price of 21.7p per share. The placing price represents a 10% discount to the closing bid-price on 22 September 2022. Crossword intends to use the proceeds from new and existing institutional shareholders for sales and marketing, product development and support, geographical

Hybridan Research: 29/09/2022: Crossword Cybersecurity plc: On the cusp of a new growth phase

About one week after the closing of a successful equity raise for £3.6m, Crossword today announces its unaudited interim results for the six months ended 30 June 2022. 1H22 revenue totalled £1,525k, up 85% year-on-year and achieving 38% of its annual target. The loss before tax was £2,273k for the period. Management reiterates its guidance for growing revenues by circa 75% to £4m in 2022 and by a further 50% to £6m in 2023. Crossword indicates that its ARR (Annual Recurring Revenue) grew 48% s

Hybridan Research: 21/03/23: Crossword Cybersecurity plc: Bottom-up revenue forecasts upon launch of Ransomware Readiness Assessment Service

Good Morning, Crossword Cybersecurity plc, last week announced, the launch of its new Ransomware Readiness Assessment service. We have published research on this which is attached and a snapshot of the research is below. Crossword Cybersecurity announces the launch of its new Ransomware Readiness Assessment service, as part of its managed services Nightingale. The service helps organisations reduce exposure to ransomware attacks and is expected to attract business for Crossword’s Consulting pr

Hybridan Research: 19/04/2023: Crossword Cybersecurity plc (CCS.L): Aiming to achieve £6m revenue in 2023

Crossword Cybersecurity today announces its audited results for the year ended on 31 December 2022. Revenue was £3.65m, up 68% year-on-year. Organic growth was 55% in 2022. Meanwhile, Crossword crystalised the synergies among its home-grown and acquired offerings by adding approx. 20 clients to a total of 120+ and increasing revenue per client by 40% to £28,700 per client, up from £20,500 in 2021. Cost structure and bottom line: Total cost of sales and administrative expenses increased by £2.6