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
Pelatro has raised $2.7m in an equity Placing to fund an expansion in sales headcount and marketing activities in order to further expand the business, subject to shareholder approval. The product suite is fully developed and ready to be taken to a much broader set of customers. The beneficial impact of this expansion should be felt from the end of 2021E onwards.
Pelatro PLC (LON:PTRO) is a software provider focussed on the telecom sector, offering telecom operators solutions for increasing revenue per subscriber, retaining subscribers, and monetising data.The customer base includes major global telecom operators, with the biggest geographies being Southeas
Pelatro's AGM statement shows rapid growth in visible revenues for 2020E. Given this trajectory, the stated aim of achieving double-digit ($m) annualised recurring revenues within 2-3 years looks very achievable. This is the catalyst for a re-rating of the stock which on the current runway looks as if it will happen sooner rather than later. Buy.
A concerted move into managed services is improving the quality of revenues. Management is targeting the growth in recurring revenues to cover the cash cost base of the company by 2022. This event will mark a material derisking of the investment case and is the pathway to the share price doubling or more over the next 2-3 years. Buy.
Inspecs, a UK designer, manufacturer and distributor of eyewear frames to global retail chains announces its intention to IPO onto AIM raising £94m with a market cap of £138m. Admission expected 27th February. FY Dec 2018 numbers show revenue of $57m and underlying EBITDA of $11m
Companies: SO4 TRP ECHO OPM EBQ SBTX CGH PTRO PEN
MJ Hudson Group PLC, the financial services support provider to Alternatives fund managers and asset owners, is planning an AIM IPO. Deal details TBC.
Companies: TM17 AMO SPE EOG LWRF FARN MIN PTRO KDR PXS
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
Companies: PTRO FDEV MRL CTP EHG FDP THAL SCLP YCA CGH
Network International Holdings—Pleading enabler of digital commerce across the Middle East and Africa region, operating across over 50 highly underpenetrated payment markets that contain a total population of 1.5 bn. 2018 rev $298m, underlying EBITDA $152m. Due April. No new funds to be raised. Secondary sell down. Targeting 25% of at least 25%. 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.
Companies: SOLG SNX PGH PTRO VNET ALB DPP BOKU FEVR STM
Network International Holdings—Potential Intention to Float— leading enabler of digital commerce across the Middle East and Africa region, operating across over 50 highly underpenetrated payment markets that contain a total population of 1.5 bn. 2018 rev $298m, underlying EBITDA $152m. 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. Diaceutics, a data analytics and implementation services company which services the global pharmaceutical industry, due to join AIM 21 March. Mkt Cap c. £53m Raising £17m at 76p.
Companies: KZG VLE NAH TRB DISH MSMN PTRO TUNE
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.
Polemos, to be renamed Digitalbox plc, has agreed to acquire Digitalbox Publishing Holdings Limited for c.£10m through a share for share exchange. The acquisition constitutes a RTO. Polemos has also agreed to acquire the entire issued share capital of Mashed Productions Limited, a digital media business which owns the online satirical news website "The Daily Mash", for a maximum total consideration of up to £1.2m. Market cap on admission £12.4m, expected 28 February
Companies: ARCM ARIX IRON TENG MANO PCA PAT PTRO TEF
Pelatro’s demonstration of its mViva marketing platform at a recent capital markets day revealed the scope of its big data analytics capabilities and interactive user interface. Ease of use by non-technical staff and the ability to quickly launch and analyse complex marketing initiatives are key differentiators. With its focus on client retention and revenue stimulation, which are now of vital importance to the stagnant telecom sector, its client base is growing fast. In 2018 it rose by eight to 14 clients including Telenor, Tele2 and SingTel. Pelatro trades at a significant discount to its peers on a 2018e EV/EBITDA of 9.2x.
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FY’20 results are slightly ahead of our expectations, and cap an excellent period with strong news flow. KidneyIntelX has now launched at Mount Sinai and is cleared to report results in all 50 US states. We continue to believe KidneyIntelX could represent the future standard-ofcare for early detection of chronic kidney disease progression and kidney failure in patients with Type II Diabetes, affecting an estimated 11m. Focus is now on building out the platform with expanded indicated uses, win national reimbursement and drive testing adoption. One significant catalyst ahead is Medicare coverage, which come as early as H1 2021 under new proposed rules. Whether or not this rule is finalised, the company is moving forward towards broader insurance payor coverage. In this note, we have refreshed our forecasts and valuation reflecting the deployment of IPO proceeds.
Companies: Renalytix AI Plc
An H1 update to September reveals a robust performance notwithstanding a challenging macro backdrop - sales (ex. Coral) are just “slightly lower” y/y, indeed if also excluding an intentional move away from hardware-based Support, we estimate core revenue grew c.+7%. This was underpinned by continued strong growth in US SecPay: +80% y/y, now ~32%/group sales, while in the UK, we estimate sales fell by c.-11%. Here, Covid impacted transactional sales (rather than any permanent loss of business) such that a future recovery is likely in our view. Despite the lower sales and GP, it‘s impressive to note profitability is expected to be in line with 1H20 (AOP: £3.4m) following tight cost management. Looking ahead, there’s reason to be optimistic, as in US SecPay, large enterprise tenders that were paused in H1, may resume in H2. Meanwhile in the UK – and despite the headline sales figure – business activity is already reassuringly strong: total new business won grew 8% y/y in H1, this includes the major £4m/6yr contract with Capita and TfL announced in August. In addition, closing net cash of £12.9m (£2m FCF) continues to offer strategic options. We reiterate that this a high quality company, with a robust and cash generative UK business, while leadership position in a nascent and fast growing US market.
Companies: Eckoh plc
Proactis has delivered finals to July in line with the August trading update, revealing EBITDA of £11.8m from revenue of £49.6m and pre-IFRS16 net debt of £45.1m (net bank debt of £37.1m). The focus remains on annual recurring revenue (ARR), total contract value (TCV), and bePayd, with positive news on all three: core ARR increased by 1.3%, TCV won in the period surpassed all previous highs despite COVID, and bePayd engaged with early adopters. While COVID has had an effect on sales cycles, the application of the UK and NL mid-market sales methodology across a consistent target market in France, Germany and the US has already demonstrated results with contract wins and the establishment of a record pipeline. The group has reshaped in favour of efficiency and visibility, delivering credibility with proof of execution and offering substantial upside. Target 80p reiterated, with a long run target of 180p applying reasonable peer group multiples to maiden FY22 forecasts.
Companies: PROACTIS Holdings PLC
Positive update today – reporting that as a consequence of recent SITS contract wins, careful cost management and the efficiency of remote delivery, TRB is tracking “comfortably ahead” of current profit estimates. As a consequence, we upgrade EBITDA and AOP to £14.8m and £11.5m, equivalent to 8% and 10% upgrades respectively. FCF is tracking better also, as implied by current net cash: £11.2m – already exceeding our FY20 estimate. Accordingly, we upgrade u/l FCF (i.e. ex the royalty dispute) to £5.7m. Also announced today - Q3 ARR now stands at £44.5m, up £1.3m on 2H20. While only using 3 months of data, we highlight that this run-rate equates to +12% annualised growth i.e. a significant step-up vs. the +3% y/y achieved to 2H20. To us, this is a clear reflection of how TRB’s on-prem SITS product continues to sell, TRB’s significant cloud hosting opportunity with existing customers and lastly, we’re also starting to see the financial benefits from Tribal Edge, as the first module went live earlier this year. In view of progress, we also make modest upgrades to FY21 estimates, whilst leaving scope for outperformance, should current momentum be maintained. On valuation, whilst the share price has recovered somewhat, TRB still trades on a 7% earnings yield or alternatively, just 2.7x ARR. On either metric, this looks attractive vs. peers…so would suggest TRB’s very real growth opportunities are still not priced in.
Companies: Tribal Group plc
Allergy Therapeutics (AGY.L): Initiation of field trial | Sensyne Health (SENS.L): Research agreement with Milton Keynes University Hospital
Companies: Allergy Therapeutics plc (AGY:LON)Sensyne Health Plc (SENS:LON)
GB Group (GBG) expects to report underlying revenue growth of 10% y-o-y for H121, with a one-off contract in the US making a material contribution to revenues. Combined with strict cost control this resulted in adjusted operating profit growth of 26% y-o-y and a £32m h-o-h reduction in net debt. With management guidance for revenue well ahead of our and consensus forecasts for FY21, we have upgraded our revenue and EPS forecasts for FY21–23. Despite COVID-19 related pressure on new business in the short-term, we view GBG as well placed to benefit from the accelerated shift in the digitalisation of business processes.
Companies: GB Group PLC
Microsoft has begun marketing LiveData as its ‘preferred solution’ to migrate Hadoop data into the cloud. The announcement represents a culmination of years of development work from WANdisco and finally proves beyond doubt the capabilities of its technology. As highlighted previously, we expect this launch to drive a significant uptick in financial performance. The exact timing and pace of this uplift is uncertain, but the company has reaffirmed the guidance given to the market at its interims.
Companies: WANdisco Plc
Gaming Realms is a creator and licensor of innovative games for mobile, with operations in the UK, U.S. and Canada. Flagship brand Slingo® is a highly popular and unique game genre which combines elements of slot, bingo and table gameplay. These games are licensed by some of the biggest online gaming operators in the world, including DraftKings, Sky Betting & Gaming and GVC, and distributed directly to operators or via global partners such as Scientific Games & Relax Gaming using the company's proprietary Remote Game Server platform.
Companies: Gaming Realms PLC
Mirriad Advertising’s H120 numbers show strong top-line progress, up 109% on H119 and 26% ahead of H219. H120 revenues were up over 185% year-on-year in China and Singapore, with market confidence rebuilding. There are very promising new agreements in place with US media owners, with early moves in large adjacent markets, such as music video. There are advanced negotiations ongoing with Tier 1 entertainment platforms. These prospects significantly increase the attraction of Mirriad’s proposition to advertisers. Cash burn is now under £1m per month, with end-August cash of £13.3m (no debt). Market forecasts for FY20–22 are unchanged.
Companies: Mirriad Advertising 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
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
Gamesys Group’s Q320 trading update is ahead of expectations with pro forma revenue growth of 31% and an improved financial position. As in previous quarters, the company increased the active player base responsibly and benefitted from new game launches. We increase our revenue forecasts for FY20–22 by 5.7–7.0%, and EBITDA forecasts by a slightly lower 2–3% as management further invests in growing a sustainable and repeatable business, while ensuring revenue growth is done responsibly. This follows an EBITDA upgrade of 7.8% for FY20 at the time of the interim results. For FY21e, the free cash flow yield is 9.2% and the dividend yield is 2.9%.
Companies: JP7 GYS JKPTF
Q3 figures were broadly in-line with our estimates
Q4 guiding implies marginal changes to our estimates
Focus in the coming months should be a potential IPO of Bemobi in Brazil
Continue to view Otello as a break-up-case, could give additional upside
Companies: OS3 OPESF OTELLO 0FI5 OPERA
Otello’s Q3 figures were slightly below our estimates. AdColony was in-line with our estimates, while Bemobi came in slightly below. We continue to view Otello as a break-up-case, as its segments share no synergies, which could give potential upside to our target price. The focus in the coming months should be on the preliminary filing for an IPO of Bemobi in Brazil. We maintain our Hold rating but increase our target price due to AdColony.
AGM statement as expected; Resume with a Buy
Companies: CloudCall Group PLC