Pinewood Technologies (PINE LN) - Strong results, growth ahead

Pinewood Technologies’ results for the 13 months to 31 January 2024 confirmed good growth in user numbers, revenue and operating profit for the continuing automotive software business. Our unchanged forecasts (see 6 March research) show strong revenue growth, high margins, and good cash generation over the period to FY26 as the Group executes its accelerated growth plan. As of Tuesday this week, Pinewood’s shares are ex-dividend and a 1-for-20 share consolidation is effective, meaning our discou

Pinewood Technologies (PINE LN) - Driving growth in automotive software

Pinewood’s transition to a pure-play automotive SaaS business is now largely complete. Today we introduce summary forecasts out to FY26 and reiterate the investment case. We see significant opportunity for Pinewood to grow its user base in the UK and internationally whilst generating high EBITDA margins and cash conversion. With a 24.5p special dividend embedded in the current price (payable Q1/Q2), the effective price today is 12.3p. Based on the Group’s FY27 target of £27m EBITDA, we estimate

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

Pendragon (PDG LN) - Disposal and transition approved

Pendragon has announced shareholder approval to dispose of its UK motor retail and leasing businesses to Lithia Motors for £367m, then transition to a pure-play software business under the Pinewood Technologies name.

Pendragon (PDG LN) - Strong operational performance

As flagged in a July trading update, Pendragon’s interim results showed strong sales and gross profit growth more than offsetting underlying cost inflation and interest rate rises.

Pendragon (PDG LN) - High potential in Pinewood

Earlier in the week Pendragon announced a proposed deal to dispose of its UK motor retail and leasing businesses to Lithia Motors for £250m, after which it will become a standalone, listed SaaS business with its Pinewood dealership management software (DMS) product. On the day, we set out a high level view of the transaction and the growth and valuation implications. This note dives further into these topics, in particular the potential for the deal to significantly accelerate the growth in Pine

Pendragon (PDG LN) - Proposed disposal and transition

Pendragon has announced a proposed deal to dispose of its motor retail and leasing businesses to Lithia Motors for £250m, after which it will become a standalone, listed SaaS business with its Pinewood dealership management software (DMS) product. The aggregate equivalent value for shareholders, including the retained stake in the continuing business, was 27.4p per share on announcement, above our 26.8p per share SOTP estimate from 17 January. Going forward, we think the disposal could focus inv

Pendragon (PDG LN) - Trading strength offsetting cost pressures

Pendragon’s H1 pre-close trading update shows a strong trading performance, with sales and gross profit growth more than offsetting underlying cost inflation and interest rate rises.

Pendragon (PDG LN) - Strong first quarter trading

Pendragon has released a trading update for the quarter to 31 March 2023 showing performance well ahead of Q1 2022. The Group has had a strong start to the year, with underlying PBT up 23.0% to £23.0m (Q1 2022: £18.7m).

Zeus: Automotive Retail sector analysis - April 2023

This report provides an updated view on the key themes facing the motor retail sector in 2023. On page 4 we discuss the conclusions of our July 2022 research and compare them to what happened in H2 2022. It is clear that many of the same themes (supply shortages, high inflation, sector consolidation, etc.) still apply – here we discuss how these themes have evolved.

Pennant International - Software launch underpins revenue shift, material prospects despite tricky timeframes

This morning's update from PEN highlights major developments on the software front, where the latest version of its successful GenS product, which supports the maintenance of key assets, was launched as flagged at the end of April, to be followed by the integrated solution in Q4 – encouraging developments given the high gross margins available to PEN in these product areas. The company provides software / integrated product support solutions to an extensive client list of OEM's and governments,

LIBERUM: Cerillion: Another half, another contract win

Allenby Capital: EnSilica plc - Update

EnSilica has released a trading statement for the 12m period ending 31 May 2024. The Company expects to report revenues for the period of approximately £25m (Allenby forecast £22.9m), equivalent to year-on-year (“YoY”) growth of 22.1%. Whilst a change in sales mix against expectations has resulted in lower EBITDA margins, hence EBITDA is expected to be £1.8m against our forecast £2.5m, a lower than expected D&A charge and higher tax credit has resulted in the Post Tax Profit expectation of £1.9m

LIBERUM: TruFin: Milestone moment

Executing

FY24 EBITDA sprints ahead

itim Group - Full year results illustrate positive momentum as profit focus bears fruit

itim is a disruptive SaaS and services platform that enables store-based retailers to implement a proven Omni-channel solution. This morning, the group has reported full year results to 31 December 2023, in line with February's trading update and with significant progress in product development and notable contract wins post-year end. Revenue in the year increased 15%, primarily driven by a 54% increase in service revenue, as itim looked to shift its focus from subscription growth to paid-for se

LIBERUM: CEO Video: Louis Hall, Cerillion:

Intelligent Ultrasound Group - FY23: A year of important progress

Intelligent Ultrasound has reported its results for the 12 months to December 2023. In line with the January trading update, the company has reported group revenues of £11.2m, up 11% reported or c36% adjusting for one-off sales in FY22. Importantly, the company generated £2.0m from its Clinical AI product portfolio versus £0.7m in FY22 and we note GE HealthCare has expanded the range of Voluson ultrasound machines that include SonoLyst, powered by Intelligent Ultrasound’s ScanNav software. The c

NCC Group (NCC LN) - Initiation: Transformation

We initiate coverage of NCC Group, a well-respected provider of cyber security and software escrow solutions. In FY23, the company experienced a significant market pullback that revealed operational deficiencies. The company appointed a new CEO, who introduced a turnaround strategy in January 2023. We believe the ongoing improvements are transformational and consensus expectations underestimate NCC’s revenue growth and margin potential. In addition, shares trade below historic multiples and thos

1Spatial - Investing in the transformational SaaS opportunity

1Spatial’s FY24 results reflected robust momentum for the enterprise business and continued improvement in the revenue mix, with investment in growth suppressing margin and cash generation. This investment phase will continue in FY25 to lay the foundation for transformational growth from 1Streetworks and in the US in the coming years. Our scenario analysis indicates the upside from successful execution is significant, with further wins for 1Streetworks and in the US being the key catalysts for m

Made Tech Group PLC

Made Tech is a leading provider of digital, data, and technology services to the UK public sector. The Group was founded in 2008 by Rory MacDonald (CEO), who remains its main shareholder with 28% of the equity, and IPO’d in 2021. The Group is entirely exposed to the UK public sector and we believe this represents a large structural growth opportunity as the shift to digital services is likely to accelerate. Moreover, we believe Made Tech will continue to benefit from the transition away from UK

itim (ITIM) - Five year contract renewal with Majestic Wine

Following the announcement of in-line full year results last week and a string of recent contract wins, today's news marks a further positive development for itim, with the announcement of a contract renewal with one of the group's flagship customers. With positive progress on new contracts adding incrementally to recurring revenues and actions being taken on costs, we view itim as well placed to deliver throughout the remainder of 2024 and beyond, with real potential for outperformance should

Morning Note – 10 May 2024

CLIQ Digital - Increased churn weakens FY24 outlook

CLIQ Digital delivered a disappointing start to FY24 in Q124, as its membership base fell following a change in refund programmes from credit card providers, making it easier for subscribers to cancel. Revenues fell 12%, while marketing expenses, a key growth driver for CLIQ, dropped 9% as management sought to protect its gross margin. The adjusted EBITDA margin fell to 7%, driven by the decline in sales. Management has initiated its Fit for Future transformation strategy to drive operational ef