ANGLE PLC | GLOBAL INVACOM GROUP LTD | MATCHTECH GROUP PLC | METMINCO LTD | MYTRAH ENERGY LTD | PORTMEIRION GROUP PLC | RENEURON GROUP PLC | SERVICEPOWER TECHNOLOGIES
Companies: MNC GINV GATC SVR MYT PMP AGL RENE
Magnolia Petroleum (MAGP.L) | Metal Tiger (MTR.L) | Metminco ( MNC.L) | ReNeuron Group (RENE.L) | Global Invacom Group (GINV.L) | Matchtech Group (MTEC.L) | ServicePower Tech (SVR.L) | Mytrah Energy (MYT) | Portmeirion Group (PMP.L) | ANGLE (AGL.L)
Companies: 0GB2 MNC GINV GATC SVR MYT PMP AGL RENE
Turnarounds are notoriously tricky even at the best of times. Inevitably once one problem is fixed, another crops up – which is what has happened this year at ServicePower. H1 revenues at £6.8m showed impressive growth of 12.8%, after a series of blue chip contract wins. Since then, like many small caps, the going has got progressively tougher – characterised by longer sales cycles as clients have become increasingly nervous due to slower global growth, emerging market instability, terrorism, lacklustre demand in China and falling commodity/oil prices.
Companies: Servicepower Technologies
7DIG Half Yearly Reports, AVG Final Results, BMR Potential, COS Agreement, IKA Patent grant, MGR Half Yearly Report, MXO* Half Yearly Report and Update, OBT Half Yearly Report, OPTI* Completion of Study, ORM Half Yearly Report, PLI* Meeting with US FDA, SVR Interim Results, VLG Interim Results, UNG New Contract Win .
Companies: 7DIG AVG BMR IKA MXO WBI OPTI PLI SVR VLG UNG ORM PMI
Microcap software is a stock-pickers paradise par excellence. Not only is the sector poorly covered by the City, but also the returns can reach nosebleed levels. Here the technology is often niche and difficult to copy – hence creating predictable revenues, healthy margins and positive cashflows. But the really exciting bit comes when growth is added; effectively turbo-charging profits as incremental sales largely drop down to the bottom line.
AFPO Memorandum of Understanding, AAU Quarterly Newsletter, ATQT Directorate Change, COS Participation, FITB* Board Changes and Appointment of CEO, G4M Trading Update, MARL* Exercise of Warrants, Termination and CPR, MDZ* Final Results, MXO* Nigerian Update, OPTI* Half Yearly Report, PEG* Directorate Change and Half yearly Report, PLI* Expansion of Phase II, SVR Award and Patents, STEL Licence Application, ZEG Intention to Move to Official List
Companies: BLCC AAU ATQT G4M MDZ MXO OPTI SVR ZEG STEL MARL BIDS
AVN Financing, BLU Timeline and Results, ECK Contract Wins, FITB Placing, Subscription and Convertible Loan Note, HRN Admission to AIM, MARL Estimate, MMH Interim Results, MXO Mexico Update, NET Contract Win, PLI Q2 Results and Highlights, SVR Contract Win, TRCS Trading Update, UNG Launch, VENN Trading Update
Companies: AVN ECK HRN MMH MXO PLI SVR TRCS UNG ORPH NET MARL BIDS
BOOM Half Yearly Report, COG New Research, CRU Preliminary Results, FEVR Interim Results, HCM Innovation Patent, IVO Investments, JRIC Half Yearly Report, MJW Launch of Naked Wines, MARL* Resource Estimation, MXO* Drilling Commences and Director Dealing, NAK Final Results, PEG* Trading Update, SAR* CHK1 Update, SDI Final Results, SVR Trading Statement, STAF Interim Results, SNX Interim Results
Companies: COG CRU FEVR IVO WINE MXO NAK PEG SAR SDI SVR STAF SNX MARL HCM BOOM
Earnings upgrade cycles are like gold-dust. Get on board early, and the returns, especially for off-the-beaten track stocks like ServicePower, can lead to very rich-pickings for investors.
Ultra-low interest rates and improving corporate balance sheets have helped drive M&A activity to record highs – climbing 47% in 2014 to $3.5 trillion in terms of announced deals, and up another 38% to $2.2 trillion in H1’15 (source: Reuters).
C21 Contract Win, ABDP Interim Results, AFHP Acquisition, AVCT Interim Results, CDOG Final Results, CRE Trading Update and Acquisition, ECK Trading Update, FDBK Trading Update, FITB* Partnership, MARL* Trading Update, MSG* Trading Update, MPAY Preliminary Results, MXO* Update, PTSG Final Results, SVR Contract Wins, THAL New Contracts
Companies: C21 ABDP AFHP CRE ECK FDBK MPAY MXO PTSG SVR THAL MARL AVCT BIDS CTEA
Research Tree provides access to ongoing research coverage, media content and regulatory news on Servicepower Technologies.
We currently have 22 research reports from 3
The H1 results are as announced in the October update; COVID delayed several new contracts until earlier this month, leaving H1 revenue at £5.1m. However, management remained comfortable with a FY sales forecast of £21.7m on the basis of a strong pipeline and the substantial tranche of annually renewed revenue billed each H2. Reassuringly, the new contracts have now been signed for both the Celebrus Customer Data Management (CDM) solution and the Celebrus Customer Data Platform (CDP), and they cover a range of verticals from financial services to automotive manufacture and ecommerce provision. With significant net cash, D4t4 is in a strong position for long-term sustainable growth on the back of rapidly growing global demand for CDP/CDM. It remains confident on prospects in new geographies (N America and APAC) and new use markets (fraud, risk analysis and healthcare) plus a high level of recurring revenue. Our forecasts and target price remain unchanged save for a tweak to cashflow and raised dividend expectation. We reiterate our 310p target price.
Companies: D4t4 Solutions plc
Interims, in line with the October trading update and unchanged forecasts, follow a second (November) purchase order from the new US Department of State contract, highlighting momentum. The 5Cs that form management’s measure of strategic development have all generated positives: colleagues, with employee NPS rising, and no furloughs or paycuts; new & renewing customers, high-profile names and sectors; a broadening channel including generating new clients; code increasing with the addition of FIDO and increased reach through MyID Enterprise/ MyID Professional; and cash of £8.1m with £4.8m debt all in the form of in-the-money December 2021 convertibles. Strong 1H performance and cashflow derisks full-year expectations. Target raised to 125p (100p).
Companies: Intercede Group plc
IQE has announced that the strong performance in H120, which resulted in record first-half revenue, has continued into the second half. It has updated FY20 revenue guidance from at least £165m to over £170m, with adjusted EBIT guidance remaining at the mid-single-digit million level. We have updated our FY20 and FY21 forecasts accordingly, giving adjusted PBT upgrades of 34% and 10% for FY20 and FY21 respectively.
Companies: IQE 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
Eckoh’s fast growing US SecPay business and robust UK business model have minimised the impact of lockdowns with u/l H1 revs down just 3% yoy and profits flat. ECK reintroduces FY21 guidance, expecting H2 revenues comparable to H1 and FY21 AOP comparable to FY20. US SecPay is now a meaningful >30% group revs, growing 80% in H1 and with larger customers now re-engaging. We expect growth to continue in FY21 and beyond; the opportunity is multiples of current sales (FY21E $13m- +60% yoy). We similarly expect the cash cow UK business to continue to recover and return to c. 5% secular organic growth over time. It is especially continued success with US SecPay that is likely to lead to group FCF exceeding that of £5-6m achieved in FY20/19 over time and a FCF yield well above 5%. That’s attractive.
Companies: Eckoh plc
H1 Results: Ready to reinvest
Companies: First Property Group plc (FPO:LON)First Property Group plc (GXZ:BER)
After a challenging 2H21 for the events and traffic data business, Tracsis has delivered FY results to July in line with the reassuring August trading update. With £48m (FY19: £49.2m) revenue, the group has quantified an estimated £10m set back to COVID-affected activities within the Traffic & Data Services (T&DS) Division, implying underlying outperformance compared with expectations for the higher-margin Rail Technology & Services (RT&S) Division. Forecasts describe prospects: continuing growth in FY21 and FY22 for RT&S, with two major contracts identified in latter stage of negotiation; and a still hampered FY21 for events and traffic surveys within T&DS – but forecasts for FY22 show a return to an ex-COVID environment, regaining the original growth path. With £17.9m of cash (no debt) and delivering multiple fundamental elements of the UK rail ecosystem, Tracsis has weathered the storm better than expected, with organic and acquired growth prospects as strong as ever. Target 900p reiterated.
Companies: Tracsis plc
Earnings in H1A were better than flat and H2E has got off to a good start. Margins are up and so too is recurring revenue as proportion of total business. First half order deferrals are now materialising and renewals are positive. Free cash generation was strong and the outlook is positive. We see no fundamental reason for the recent share price underperformance and we reiterate our Buy recommendation.
Companies: Shearwater Group plc
Sensyne Health (SENS.L): Research agreement with Hampshire Hospitals NHS Foundation Trust | RenalytixAI (RENX.L): First Quarter results for 2021
Companies: Sensyne Health Plc (SENS:LON)Renalytix AI Plc (RENX:LON)
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
Following Fonix successfully raising £45m through an oversubscribed IPO on 12 October, we initiate our coverage with a target price of 150p. The investment case is focused upon Fonix leveraging its proprietary, cloud-based platform to expand with existing clients and win new clients within a robust UK phone-paid services market. The structural strength of Fonix’s platform is demonstrated by Fonix experiencing no churn from major customers in the past six years, which reflects that Fonix benefits from strategic integration and strong relationships with its clients. Fonix’s FY20 gross profit and EBITDA grew by +22% and +36% respectively, and we conservatively forecast +11-12% EBITDA and EPS growth in FY21 and FY22. On 12m forward EV/EBITDA of 10x and an EFCF yield of 7%, Fonix looks considerably undervalued compared to AIM payment and finnCap Tech 40 peers that are trading on 12m fwd EV/EBITDA of 17-20x with 7-17% EBITDA growth, and EFCF yields of 1-3%. We base our 150p target price on 15x FY22 EV/EBITDA or a 5% FY22 EFCF yield, and look forward to Fonix’s trading update in early 2021.
Companies: Fonix Mobile PLC
Nanoco has secured just under £1m grant funding for a life sciences project to develop a heavy metal-free quantum dot testing kit to detect COVID-19. The project will last 18 months and represents a potential third segment for generating future revenues in addition to established activities in sensing and display applications. We make minor adjustments to our estimates, although there is no impact on EBITDA or cash flow.
Companies: Nanoco Group PLC
ACT announces today that it has received a PO for the first large scale deployment of its HXM offering for a leading global energy supplier, and this on a c. 3 months sales cycle. We believe this has the potential to grow into a multi-million contract over time and validates ACT’s decision to change its go-to-market model back in Jan 2020. Perhaps even more significantly ACT reports that channel partners have established a pipeline of >4m addressable employee seats just since August. Our best estimate is that this pipeline could be worth high single digit tens of millions of recurring dollars p.a . For a company capitalised at £37m that is very material. This is a company/story worth getting to know.
Companies: Actual Experience plc
The Panoply has reported very robust interim results and we upgrade our FY21 PBT/EPS estimates by +5%/+10%. Revenues leapt +58% to £21.2m with LFL growth of +18% (Q1 +10%, Q2 +26%). EBITDA more than doubled to £2.9m, with LFL growth of +37%. Cash conversion was strong and the group has declared a maiden interim dividend of 0.2p. The group had a strong sales backlog of £17.5m at 1st October and we are pleased to note that it is increasingly winning large, multi-disciplinary contracts notably Bloomberg Philanthropies, Land Registry and Planning Inspectorate. These contracts would have beyond the capabilities of the individual businesses before they joined The Panoply and therefore in our view securing these £4m+ contracts vindicates the group strategy. We raise our PBT forecast by +5% to £4.9m (£4.7m). On a maximum deferred consideration basis, EPS is 5.1p (4.8p) while assuming shares are issued at 150p rather than our previous assumption of 120p gives EPS of 6.4p (5.8p). We have re-run our sensitivity analysis using the current share price of 200p and this indicates PF EPS of 10p could be delivered in 2023. We raise our target price to 220p (was 180p) and retain our Buy recommendation.
Companies: Panoply Holdings Plc
Immotion is a leading UK-based Virtual Reality (VR) experience provider. The group yesterday announced a successful £1.2m fundraise at 4p, a 5.3% premium to the previous day's closing price, to support the strength of demand being experienced for its new ‘Let's Explore Oceans' in-home VR entertainment offering.
Companies: Immotion Group Plc