2019 results - strong software performance
Amino has announced FY 19 results in line with our estimates. Software and services sales grew strongly during the year (+41% YoY) reflecting the transformation programme announced during 2019 and the 24i acquisition. The transition towards a more software- led business model is also benefitting earnings quality, with improved revenue visibility, margins and cash performance. We make no changes to earnings estimates, but believe re-affirmed dividend expectations, alongside positive management commentary on the outlook give grounds for optimism for FY 20E and beyond. We also include a short comment on the potential Coronavirus impact to the supply chain – there is clearly a challenge, but one which we currently hope can be contained.
27 Feb 20
Execution proves strategy
Finals for November FY19 report performance demonstrating execution of both the transformation programme announced this time last year, and the integration of the July acquisition of 24i Media. The focus on higher-margin software-enabled devices and the growth of both recurring revenue and software as a % of group revenue improves margins, visibility, and earnings quality, while returning forecasts to prospective growth. Typically strong cash generation and positive KPIs drive home the point that financial execution is on track or slightly ahead of expectations (from revenue outperformance and mild consequent revenue upgrade); while operational execution is also laudable with the joint Amino/24i contract win with Dutch MVNO Youfone, increased international diversification, and a consistent pace of R&D to satisfy and exceed client and end user requirements. A successful set of results prove the bullet was bitten bravely and justifiably, and we look forward to further contract wins. Target 215p reiterated, with forecasts benefitting from upgraded revenue (+4% FY20; +3% FY21) accommodating greater opex investment and unchanged EBITDA expectations.
27 Feb 20
24i opens on Broadway
Amino’s 24i subsidiary has launched a new suite of applications and Subscription Video on Demand (“SVoD”) services for US-based video streaming service BroadwayHD. The release contains no financial details as to the value for Amino and we make no changes to forecasts. Nevertheless, we believe BroadwayHD is a useful reference client win. Following the joint Amino/24i Youfone announcement, in our view the BroadwayHD launch demonstrates the momentum in the combined business and highlights the transformational nature of the 24i acquisition.
11 Dec 19
Reassurance on the FY 2019E outcome
In our view, today’s trading update from Amino reassures on the FY 19E financial outcome. Management expects to report trading performance in line with market expectations and strong operating cash flow delivery. The release confirms that 24i has been successfully integrated into the group, and we see the announcement of a contract win for the supply of an endto-end (“E2E”) video solution to Youfone as a further positive – it represents the first joint customer announcement from the “new” Amino group.
09 Dec 19
Four plays for growth
Summary – In this report we outline the investment case for four companies that we believe have transformative growth potential: Bigblu Broadband, Audioboom, ULS and Beeks. We also include the current sector valuation, our recent research, and a profile of all of the companies covered by the 4-strong Tech Research team at finnCap.
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29 Nov 19
The recent launches of a plethora of new OTT TV services, including AppleTV+, Disney+ and HBO Max, together with enduring “cord cutting” in our view demonstrates the ongoing disruption in the PayTV industry. We have long viewed Amino as a beneficiary of structural change in the sector and we therefore revisit its acquisition of 24i in July and the subsequent view of the enlarged group’s combined capabilities seen at September’s International Broadcasting Convention 2019 (“IBC”). The combination of the two businesses means Amino goes to market with a materially enhanced product set and a significantly broader customer base – with new verticals and additional blue-chip names. The 24i acquisition also supercharges Amino’s transition towards a more software-led business model.
29 Nov 19
TikTok plans streaming launch, HP reject Xerox bid, Softbank to create $30bn tech giant
TikTok owner Beijing ByteDance Technology is in talks with big music labels - Universal Music, Sony Music and Warner Music - for global licensing deals to include their songs on its new music subscription service, the Financial Times reported on Sunday. ByteDance is looking to launch its music streaming as soon as next month, initially in emerging markets such as India, Indonesia and Brazil, before a future opening in the United States, the FT reported, citing people familiar with the matter. HP's board of directors said Sunday that they unanimously rejected a proposal from Xerox to acquire the company, because the offer is not in the best interest of shareholders and would undervalue HP. Xerox had offered HP $22 per share in its takeover bid for the company. HP is worth $29 billion and is over three times the size of Xerox, which makes printers and copiers, in terms of market cap. Japan's SoftBank plans to merge internet unit Yahoo Japan with messaging app operator Line Corp to create a $30 billion tech giant, as it bags struggling internet companies to bulk up against rivals like Rakuten Inc. The telco in a statement said Yahoo Japan, which last month changed its name to Z Holdings Corp, will merge with Line, owned by South Korea's Naver Corp, in a deal to be completed in October 2020. The companies aim for a definitive agreement by next month in a transaction that will see SoftBank Corp and Naver form a 50:50 venture that will control Z Holdings, which will in turn operate Yahoo Japan and Line.
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18 Nov 19
Dropbox beats on key metrics, WhatsApp rolls out catalogue feature, Disney downplays Netflix rivalry
Dropbox shares bounced around after the company reported betterthan-expected third-quarter earnings on Thursday, as investors digested the company's improvements on some key metrics but widening GAAP losses from a year ago. Earnings excluding certain items came in at, 13 cents per share, vs. 11 cents per share as expected by analysts, according to Refinitiv.
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08 Nov 19
Roku tanks following net loss, Qualcomm reports positive 5G forecast, Baidu’s video platform outperforms
Roku stock tanked more than 14% in after-hours trading after the company reported a wider net loss in the quarter, as it spent more to attract subscribers to its video streaming platform. Despite the loss, the video streaming company reported 32.3 million active accounts, up from 30.5 million during the previous quarter, and an average revenue per user of $22.58 compared to the previous quarter's metric of $21.06. Roku is targeting international expansion throughout the North and South American markets and expects to launch its first T.V. models in the UK by the end of 2020. Hardware was always a tough market and competition is heightening in our view. Qualcomm said on Wednesday it expected 200 million 5G smartphones to be sold in 2020, including flagship devices launching next fall, a reference Wall Street took as a hint that Apple would offer the faster technology next year. Once 5G networks are widely available sometime next year, Qualcomm, the world's largest supplier of mobile phone chips, and its rivals stand to benefit because the phones will require more chips to gain the speed boost. We’re bullish 5G – and Apple wading in certainly doesn’t hurt market growth in our view. Shares of Chinese internet giant Baidu surged over 4% in after-hours trade following better-than-expected results for the third quarter. Excluding items, EPS came in at 12.61 yuan, beating market expectations, but representing 34% YoY decline. Baidu has faced several headwinds this year including a slowing Chinese economy amid a protracted U.S.-China trade war, increased competition from new search players like TikTok owner ByteDance and increased scrutiny from regulators on the advertising market in the world's second-largest economy. Baidu is righting the ship belatedly after missing the mobile market. We’re waiting to see what happens with its B2B efforts.
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07 Nov 19
Uber targets 2021 profitability, Comcast launches new TV Ads, US-Sino tensions expected to continue
Uber announced earnings Monday that beat analyst estimates on the top and bottom lines for its third quarter of 2019. But the stock fell as much about 5% after the company reported over $1 billion in net losses, topping its $986 million loss during the same quarter last year. The loss includes $401 million in stock-based compensation. Following the results, in an interview with CNBC’s Deirdre Bosa on Monday, Khosrowshahi (CEO) said the company is targeting adjusted EBITDA profitability in 2021. We believe Mobility companies will continue to struggle to convince the capital markets until investors see the model proven.
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05 Nov 19
HBO streaming launch, Mass-migration to challenger banks, Huawei hits record market share
AT&T announced the launch of HBO Max streaming service for May 2020, with a new "Game of Thrones" series at the current HBO price of $15/month. The move surprised analysts and investors attending the Warner Media presentation on Tuesday as it was lower than expected. HBO Max is expected to reach 75 million to 90 million global subscribers by 2025, with about 50 million of these coming from the United States. The success of HBO Max is in many ways a referendum on a strategy to merge content with the means to distribute it. Challenger banks and FinTech firms are expected to have half of all consumers using their payments, card and retail banking accounts in the next three years, according to Capgemini. The group’s World Retail Banking Report highlights how challenger banks are changing the overall banking journey as well as offering customers new services, like quick or early access to funds not covered by traditional loan or card systems. Traditional banks have the right product but are "Lagging behind and giving ground to non-traditional payers in the last-mile customer experience". In our view this should surprise nobody. But the acid test of trust through a future financial crisis is yet to occur. Huawei Technologies lifted its share of China's smartphone market to a record 42%, with third-quarter shipments rising by two-thirds as domestic consumers rallied behind it after US sanctions, data released on Wednesday showed. Huawei strengthened its dominance of the world's biggest smartphone market even as the Chinese company was all but banned by the US in May from doing business with American companies, significantly disrupting its ability to source key parts We are surprised by the strength of recent data supporting Huawei.
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30 Oct 19
Alphabet misses earnings, Spotify equates podcasts to streaming
Google parent company Alphabet reported third-quarter earnings that missed earnings per share expectations but was otherwise in line with what investors expected. Revenues grew 20% YoY but aggressive investments in other bets weighed on profitability. The share price fell 4% overnight as investors digested the relative performance on earnings alongside growing unrest among its staff.
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29 Oct 19
More Netflix originals; Avast hacked; Apple manufacturing in India
Netflix is raising another US$2 billion in debt to fund additional content creation and other expenses, the company announced on Monday. The company routinely raises debt to help fuel its growing library of original TV shows and movies. The streaming giant offered US$2 billion in new debt in April after issuing another round of notes several months earlier. Netflix said it plans to use the proceeds to fund "Content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.". We’re unsurprised and anticipate the competition will also up their game to capture market share – all the better for the localisation market.
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22 Oct 19
FB & Amazon join AR/VR race, Apple plans theatre releases
Facebook and Amazon each discussed computer glasses at launch events this week. Amazon’s approach is to get a lightweight product out now, while Facebook is promising advanced technology in a few years. At an event in San Jose, California, Facebook introduced its plan for augmented reality glasses, where users will be able to pull up a visual display on top of what’s in front of them. Up north in Seattle, Amazon announced Echo Frames, lightweight glasses with the Alexa voice assistant embedded in them.
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30 Sep 19
Micron gives bleak outlook, IoT in smart cities, Amazon unveils smart glasses
Micron Technology forecast first-quarter profit below Wall Street targets, saying it was "Mindful" of economic and trade uncertainty even though there were signs of an uptick in memory chip demand, sending its shares down nearly 6.5%. The long-drawn U.S.-China trade war has impacted chipmakers already reeling under a saturated smartphone market, especially after the Trump administration blocked access to Huawei HWT.UL, the world's largest telecoms equipment maker and Micron's single largest customer
Amino Technologies IQE
27 Sep 19
US lawmakers propose $1bn fund, Alibaba unveils AI chip, Xbox gaming opens to Android
A U.S. House panel unveiled bipartisan legislation this week that would authorize $1 billion for small and rural wireless providers to replace network equipment from companies including Huawei and ZTE that lawmakers say pose a national security risk. The top Democrats and Republicans on the House Energy and Commerce Committee said in a joint statement the bill would protect the "Nation's communications networks from foreign adversaries by helping small and rural wireless providers rootout suspect network equipment and replace it with more secure equipment."
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25 Sep 19
TV’s record what we watch, Comcast announces free streaming box, Huawei forecasts 5G revenue uplift
TVs have joined the ranks of websites, apps and credit cards in the lucrative business of harvesting and sharing user information. Whilst TV records may not contain sensitive search queries or financial data, they are able to store data on user interests, personality, joys and embarrassments, as tens of millions of users have given TV brands permission unknowingly. Many TV makers say tracking what users watch helps provide personalized recommendations. However, there is much belief that TV tracking is mostly about filling in a missing chunk of data which is only useful for advertisers and media companies.
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19 Sep 19
Roku to enter UK, Details on China’s digital coin, Apple & Chinese labour law
Streaming company Roku, whose software runs one in three smart TVs in the United States, is turning to the British market as competition with Silicon Valley giant Amazon goes international. Chinese manufacturer Hisense will market televisions with Roku TV in the United Kingdom from the fourth quarter, with other European markets to follow, Roku's founder and chief executive Anthony Wood told Reuters in an interview.
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09 Sep 19
Splunk acquires $1bn cloud software firm, US & Asia pour $3.7bn into UK Tech, Hedge funds steer away from Tech
Data analytics software maker Splunk Inc on Wednesday said it would acquire privately held SignalFx, which makes software for the cloud, in a cash and stock deal for about $1.05 billion. Splunk hopes the deal will boost its capabilities by allowing its customers to use SignalFx products to monitor their data centres and applications in real-time.
Amino Technologies IQE
27 Aug 19
Apple plans $6bn content spend, Mastercard looks to hire Crypto team, Japan’s LINE Pay starts WeChat partnership
Apple has committed to spend more than $6 billion on original TV shows and movies for its forthcoming Apple TV+ service, according to a Financial Times report on Monday. Apple previously said to expect its streaming service focusing on original content to launch in the fall, and the report says that Apple is looking to turn its service live in the next two months, before Disney+ launches on November 12.
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20 Aug 19
Baidu earnings expected to fall further, Trump set to decide Huawei outcome, SoftBank employees to invest $20bn in fund
Chinese search giant Baidu is facing stiff competition from newer rivals and has seen over $60 billion of its value wiped off since its peak last year. At its peak in mid-May 2018, Baidu was worth around $99 billion - with its shares priced at $284. Stocks of the search giant have fallen to $96.7 a share with its market cap plunging to $33.8 billion. Baidu is part of China's internet trio - Baidu, Alibaba and Tencent - which have collectively been named "BAT." But it's facing an increasingly tough advertising market and has been falling behind the other two rivals.
Amino Technologies IQE
19 Aug 19
CBS and Viacom reach merger deal, Snap launches new AR Spectacles, Facial recognition in King’s Cross
CBS and Viacom have agreed to merge, ending years of on-and-off talks. The merger highlights a long effort to unite CBS and Viacom as the media companies seek to compete with giants like Disney and Netflix. Viacom CEO Bob Bakish will run the combined company, which will be named ViacomCBS.
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14 Aug 19
China’s CB nears launch of digital currency, Uber falls to all-time low, Huawei debuts own operating system
An official at China's central bank has said the institution is nearing the launch of its digital currency. Speaking at an event in China over the weekend, Mu Changchun, deputy director of the payments unit at the People's Bank of China, said its researchers have been hard at work since last year to complete the systems needed to support the digital yuan offering and that it is "Close to being out." The news was reported by Bloomberg on Monday.
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13 Aug 19
Disney sets date for $13 streaming bundle, Apple to restrict FB’s messaging app features, Snap raises $1bn for AR
Walt Disney announced on Tuesday that it would offer a $13-per-month bundle of its three streaming services starting in November, a move to attract audiences who have embraced digital services such as Netflix. Disney's bundle includes family-friendly digital offering Disney+, sports service ESPN+, and Hulu, which will cater to adults, for a $5-per-month discount. Speculation in reputable trade publication The Information, mirrored in Reuters and 9to5Mac indicated the next iteration of Apple’s mobile operating system, iOS13, will move to limit apps’ access to data while running in the background. The press notes that this will have repercussions to Messenger and WhatsApp, both owned by Facebook Inc, given both depend on the specific features of iOS that allow internet calls – which may force them to redesign their apps. Snap on Tuesday said it will raise $1 billion in short-term debt and plans to invest in more media content, augmented reality features and may also buy other companies. The parent company of the popular disappearing messaging app Snapchat has revived its user growth and stock price after a rough 2018.
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07 Aug 19
Flipkart to add free streaming content, China’s chipmakers lag global rivals, Monzo discovers security flaw
Walmart Inc's Indian unit Flipkart is set to roll out a free video service for all its 160m customers this month as the ecommerce company looks for new ways to increase its user base in smaller towns and cities, it said on Monday.
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06 Aug 19
Japan removes South Korea from ‘white list’, Apple drops after new tariffs, Pentagon puts $10bn cloud contract on hold
Arden Tech SoundBytes: Japan removes South Korea from ‘white list’, Apple drops after new tariffs, Pentagon puts $10bn cloud contract on hold
Amino Technologies IQGeo Group
02 Aug 19
Further moves into software
Amino has announced the signing of a collaboration agreement with mobitv, a US-based streaming TV and video platform, for Amino to deliver mobitv’s MOBITV CONNECT IPTV service on upcycled legacy devices. We believe the agreement delivers a strong addition to the Amino ecosystem and mobitv is an attractive partner. We make no changes to estimates following the announcement. Following the recent 24i acquisition, the mobitv agreement demonstrates further momentum in Amino’s move towards a more software-centric business model in our view. It should also enhance the group’s competitive positioning in legacy-device upcycling.
30 Jul 19
ITV and BBC reveal streaming service, China launches Nasdaq-style tech board, Cloud software company surges 75% on IPO
China launched a new Nasdaq-style tech board - the Science and Technology Innovation Board, or "STAR Market" - on which 25 companies were listed, as the country attempts to address investor concerns like market volatility and lack of governance. ITV and BBC have outlined plans for a new streaming service named BritBox which will cost £5.99 per month. The broadcasters are joining forces to set up the subscription service in the UK as a rival to the likes of Netflix, with the expected launch between October and the end of December. Medallia surged more than 75% in its market debut on Friday, becoming the latest cloud software company to attract public market investors. The San Francisco-based company, which sells software tools to help companies monitor customer satisfaction, was initially priced at $21 per share but broke the $35 per share mark soon after trading began.
Amino Technologies Zoo Digital Group
22 Jul 19
Microsoft surges after strong cloud sales, CrowdStrike beats expectations, Apple to move AirPods production to Vietnam
Microsoft yesterday beat analysts' estimates for fourth-quarter revenue and profit, driven by continued sales increases from its cloud business and sending its shares to all-time highs. Shares of CrowdStrike climbed as much as 7% on Thursday after the cybersecurity company reported earnings for the first time since its IPO. For the quarter, CrowdStrike's loss per share was in line with analysts' estimates and revenue was slightly better than expected. Apple will begin soon trial production of AirPods in Vietnam to circumvent tariff fees imposed on Chinese-produced goods by Trump Administration. By expanding production outside of China, Apple can reduce the expenses caused by tariffs put in place by the Trump Administration.
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19 Jul 19
Acquisition of 24i Media
Amino has acquired 24i Media, industry-leading provider of TV and OTT apps, user experience solutions and services, headquartered in Amsterdam. The €21.4m acquisition (€16m cash, €3.3m in Amino stock and €2.1m deferred consideration conditional on management remaining with the business) will be funded from existing cash resources, retaining a continuing net cash position. 24i contributes to the rapid development of Amino’s strategy for driving high-margin software and recurring revenues, in addition to adding further key elements of provision of an end-to-end TV solution to clients – positioning the group earlier in the engagement during selection of the TV ecosystem. Growing at a strong 25% per annum, 24i lifts Amino forecast revenue by 6% with part-year contribution to November FY19, +22% in FY20 and +28% in FY21 – with EBITDA +1%, +24% and +39%. Combining EBITDA growth with a strong supporting dividend and retaining a healthy balance sheet after an intelligent and timely acquisition, we lift our target price to 215p.
15 Jul 19
Further push into online video – 24i deal
Amino has announced the acquisition of 24i Media, a provider of TV and OTT Apps, user experience and user interface (“UX/UI”) solutions and services. The group is paying total consideration of €21.4m in cash and shares for 87% of the issued share capital, although the subsequent injection of €5m and the AminoTV business into this subsidiary raises Amino’s stake to 92%. This price equates to an EV/Sales of c.4x on an historical basis. The 24i deal will provide Amino with a significantly enhanced geographic footprint and a material extension to AminoTV’s activities. The transaction will also allow Amino to accelerate its strategy of moving towards higher margin, software-led, recurring revenues in a rapidly-changing market.
15 Jul 19
Morning Note – 15 July 2019
Access Intelligence (ACC): Corp Building a reputation – Initiation of coverage | Amino Technologies (AMO): Corp Acquisition of 24i Media | Anglo African Oil & Gas (AAOG): Corp Dispute with SMP | Avesoro Resources (ASO): Corp Mining contract for Youga signed
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15 Jul 19
Small Cap Feast
Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m. Uniphar, a diversified healthcare services business with a workforce of over 2,000, is looking to join AIM. Raising EUR135m with market cap on admission of EUR309.6m, expected 17 July 2019. Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.
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15 Jul 19
Interims: demonstrating execution
Interims to May are in line with the June trading update and unchanged FY expectations. Adjusted PBT of $4.7m (44% of FY19, compared with 1H/FY18 of 34%) was delivered from turnover of $34.6m (50% 1H/FY19 compared with 46% 1H18/FY18). Gross margin of 46% (1H18: 41.6%; 2H18 40.5%) improved as a result of the transformation programme completed in April 2019, focusing on software, services and higher-margin value-added hardware. With $5m annualised savings delivered, adjusted PBT grew 26% even as revenue declined 16%, returning $4.6m free cash flow (1H18: $2.8m) and leading to net cash of $19.3m and comfortably supporting the >8% dividend yield. With execution demonstrated through the initiatives in the period and supported by a steady stream of announcable contract wins, we reiterate our 185p target and look forward to continuing progress.
09 Jul 19
H1 as expected – strategic transition ongoing
Amino has reported H1 FY19 results which appear to be well on track for our full-year estimates and which, more importantly, provide the group with the time and cash to execute on the strategic transition to value-added software on a recurring revenue model, with services and hardware as appropriate. Margins have improved markedly, and cash generation has been strong. We make no material changes to estimates, but see these results as a step in the right direction for the group
09 Jul 19
Samsung reports drop in profits, Netflix announces London Studios, Digital bank Monese partners with PayPal
Samsung said on Friday that profits for the three months that ended June more than halved from a year earlier following continued weakness in the price and demand of memory chips. The world's largest smartphone maker and supplier of memory chips said operating profit was at $5.5bn, which was slightly better than an industry estimate of $5.1bn but was down about 56% from a year earlier. Netflix has announced it's taking a long-term lease on Shepperton Film Studios near London. Its plan is to create a dedicated UK production hub, including 14 sound stages, workshops and office space at the site owned by the Pinewood Group. Digital bank Monese and PayPal have launched a joint service that allows customers to "Seamlessly" manage their accounts. Customers at the London-based bank, which operates across 31 European countries, will be able to add their Monese card to a PayPal digital wallet, allowing them to buy and sell to any of the payments firm's 277 million consumers and merchants around the world.
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05 Jul 19
Australian banks to digitize bank guarantees, US Gov reviewing license requests for Huawei, Broadcom to acquire Symantec
Australia's top three banks said on Thursday they have agreed to partner with IBM and shopping mall owner Scentre Group to test blockchain technology to digitize bank guarantees. The companies are exploring how to move away from paper-based bank guarantees to cut processing time and the risk of fraud, Australia and New Zealand Banking Group, Westpac Banking Corp and Commonwealth Bank of Australia said in a statement. The US government said on Wednesday it was reviewing licence requests from US companies seeking to export products to China's Huawei "Under the highest national security scrutiny" since the company is still blacklisted. In an email to Reuters, the Commerce Department said that as it reviewed applications, it was applying the "Presumption of denial" standard associated with Entity Listed companies, meaning applications are unlikely to be approved. Symantec shares surged more than 20% in extended trading on Tuesday after Bloomberg reported that Broadcom is in advanced talks to acquire the security software vendor. The deal is reported to be worth more than $16bn, implying an EV/Sales multiple of 3.40x (Bloomberg). Agreement on a deal was close but could be delayed until after the July 4 holiday, according to people briefed on the move.
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04 Jul 19
Huawei granted temporary reprieve, Self-driving cars have 2 big challenges, Applied Material bets on memory chips
Huawei was granted a temporary reprieve as part of a broader accord between the Trump administration and the Chinese central government at a much-anticipated meeting between the countries’ leaders. The autonomous vehicle industry has two big challenges it needs to overcome before self-driving cars become widespread - technology and business models that can make money, according to Michelle Avary, head of autonomous mobility at the World Economic Forum. US chip gear maker Applied Materials on Monday agreed to buy Japanese peer Kokusai Electric for $2.2 billion from KKR & Co Inc, as it bets on rising demand for memory chips used in data centres, 5G phones and AI-powered devices.
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02 Jul 19
FY 19E on track
Amino’s trading update for the six months ending May 2019 confirms that the group is currently on track to deliver its expectations for FY 19E. The business is traditionally seasonally-weighted towards the second half, so with H1 19 revenues of approximately $35m and a closing net cash position of $19.3m, we believe our FY 19E forecasts of $70.7m and $23.6m respectively to be achievable. We leave estimates unchanged following the release, but believe the commercial progress delivered during H1 and the successful completion of the transformation programme give further grounds for optimism in the outlook.
06 Jun 19
Morning Note – 6 June 2019
Amino Technologies (AMO): Corp Positive interim trading update | eServGlobal (ESG): Corp HS drawdown begins as its A2A business grows | Ideagen (IDEA): Corp Capital Markets Day | PPHE Hotel Group (PPH): Corp Into the FTSE 250 | SCISYS (SSY): Corp Positive start to 2019 highlights the value in the stock
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06 Jun 19
Small Cap Feast
Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Alumasc Group plc, the prem ium building products, system s and solutions group, has announced its intention to m ove from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019
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06 Jun 19
Software-driven contract win in Bolivia
Amino has announced a contract win with Entel Bolivia for the deployment of AminoVU Set-Top Boxes (“STBs”) running AminoOS software across Entel’s fibre-based network. The deployment is described as “major”, but the release contains no further detail as to the contract size and potential value. We therefore leave forecasts unchanged following this positive news, but note that Entel is the largest communications provider in Bolivia, with a fibre network covering almost 100% of the country.
30 May 19
Small Cap Feast
Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. 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
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30 May 19
Innovative contract win in the Netherlands
Amino has announced its first deployment of AminoTV on a multitenant platform, with multi-Service Operators (“MSOs”) Delta and Caiway in the Netherlands. We see a number of positive messages in the announcement. In our view the contract demonstrates the flexibility and scalability of the AminoTV platform. It also evidences the group’s ability to leverage existing client relationships and deliver transformational IPTV migrations for customers. Deployment has already commenced and we note that Caiway and Delta have a sizeable customer base. With no immediate detail on the contract size and potential value to Amino, we leave estimates unchanged following the announcement.
21 May 19
Morning Note – 21 May 2019
Amino Technologies (AMO): Corp First multi-tenant deployment of AminoTV | NAHL (NAH): Corp Continued good strategic progress | Savannah Resources (SAV): Corp 2018 annual results | Shoe Zone (SHOE): Corp H1 in line; strong strategic progress continues apace
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21 May 19
Small Cap Feast
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, is looking to join AIM late March, offer TBC.
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12 Mar 19
De-risking and driving margins
Prelims are in line with the December update, reiterating strong cash generation taking net cash to $20.3m. The market was appraised of the effect of adverse conditions in certain regions in October, on top of US tariffs and pressure on the bill of materials across the sector. The board has opted to make the strategic move away from clients demanding a lower-margin solution for commoditised hardware, towards recurring revenue from clients understanding the value derived from the embedded software and solution opportunities from the broader Amino product set. Focus is unchanged – delivering Cloud TV Everywhere, Operator Ready Android TV, and Upcycling of legacy devices – and while the transition reduces low-margin revenue, it allows focus on recurring SaaS opportunities (software revenue grew 19%), improvement in gross margin to 50% by FY21 (FY18: 41%), and $5m of further opex savings. We review forecasts in line with guidance: revenue managed down 21% (vs FY18) but adjusted EBIT 10%, while maintenance of the covered dividend demonstrates board confidence in sustainable cash flow. We adjust our target price to 185p (260p) supported by a target 4% div yield during transition, with near-term adjustment leading to greater visibility and earnings quality.
05 Feb 19
2018 results in line, transformation announced
Amino has announced FY 2018 results in line with our revised estimates. Cash performance remained solid and was accompanied by a 10% YoY increase in DPS. Management has also re-affirmed its intention to maintain the dividend at the current level until FY2020E. With market conditions remaining challenging, Amino has announced a three-pronged transformation program focussing on increased software and services sales, reducing exposure to commodity hardware and delivering annualised $5m operating cost savings. We make revisions to estimates following the announcement which reflect the organisational resizing.
05 Feb 19
LIBERUM: Amino Technologies* - 6% yield and strategic attractions
The year-end trading update shows cash flow ahead of forecasts and a maintained earnings outlook as Management work through the macro challenges. While, Amino will need to deliver on profit forecasts over the next 12 months, the valuation is backed by an increasing software mix, 6% yield, and clear strategic attractions in a consolidating sector.
06 Dec 18
Reassuring trading update
In our view, today’s trading update from Amino reassures on the FY 18E financial outcome. Revenue and adjusted PBT are expected to be in line with market expectations, and cash generation remains strong. Furthermore, the 10% FY 18E dividend growth target has been reiterated. We make no changes to forecasts following the announcement and await detailed commentary on FY 18E business performance in the full-year results announcement scheduled for 5 February 2019.
06 Dec 18
LIBERUM: Amino Technologies* - Macro driven reduction in FY18/19 forecasts
A trading update today highlights macro driven delays in customer orders, particularly in emerging markets, as well as the continued margin pressure from sustained high component costs. We have reduced our FY18 and FY19 profit forecasts by around 30% which leaves the shares on a P/E of around 20x.
08 Oct 18
Macro headwinds intensifying
Amino has announced that macroeconomic headwinds affecting the business have intensified, and the company expects higher than anticipated component prices in H2 2018E. Management have adjusted their expectations for FY 2018E profits, with adjusted PBT expected to be c$11.5m. We take the company’s cue and reduce our forecasts accordingly. On a more positive note, cash performance remains strong, and management has confirmed its intention to increase the FY 2018E dividend by no less than 10%, with this level of dividend to be maintained to FY 2020E.
08 Oct 18
Up, Up and Away in the Netherlands
Amino has announced that it is to deliver a major “upcycling” programme for T-Mobile Netherlands. The deal will also include a deployment of Amino Aria HEVC-enabled (4k) devices and the client is also installing the AminoOS Service Assurance Platform. Over the past three years, Amino has made strong progress on standalone software sales. Today’s release confirms the group’s fourth major contract win in upcycling. The release does not disclose the contract size and potential value to Amino and we make no revisions to forecasts. Nevertheless, we believe the contract will deliver a material capital expenditure saving for T-Mobile Netherlands (running into the €Ms) via upcycling existing hardware in the field rather than undertaking a new deployment. Payback is therefore near-instant, while upcycling offers significant improvement in hardware RoI and the potential to deliver new services over existing infrastructure.
03 Oct 18
Morning Note – 3 October 2018
Amino Technologies (AMO): Corp Delivering on upcycling potential | Avingtrans (AVG): Corp A tasty slice of PIE – results slightly above forecast | Mporium Group (MPM): Corp Making an impact | PCI Pal (PCIP): Corp Large contract win underpins growth forecasts | SRT Marine Systems (SRT): Corp H1 prepares for major Systems delivery in H2
AMO AVG SRT PCIP MPM
03 Oct 18
IBC demonstrates the value of Amino’s Technology solutions
We recently attended the International Broadcasting Convention (“IBC”) in Amsterdam and identified three key themes from the event: 1) the increasing demand for end-to-end solutions in IP/Cloud TV delivery 2) Operator Ready Android TV is gaining increasing traction as the video delivery platform software stack of choice and 3) the notion of “Upcycling” legacy IPTV devices is receiving increasing industry attention. Amino’s solutions directly address each of the three segments, and we continue to believe the business is well placed to capture emerging growth opportunities in each.
25 Sep 18
LIBERUM: Amino Technologies - Initiation - Building next generation TV services
Disruptive commercial and technology challenges facing Amino’s telco and cable operator customers mean they have to reshape and, in some cases, recreate their pay-TV services. This needs investment in new software and cloud models and will require support from specialist solutions providers like Amino.
17 Jul 18
FY 18E expectations confirmed
Amino has announced H1 18 results consistent with the June-18 trading update and confirming management’s unchanged FY 18E expectations. As previously signalled, H1 18 financials were impacted by the phasing of orders by a major customer, and management expect the business to return to a more normal seasonality for the full year. Over 75% of expected FY 18E revenues were secured by the end of June-18, together with an order book up 40% YoY and management’s ongoing focus on supply chain optimisation, we see grounds for optimism in the second half outcome. We therefore make no changes to forecasts following the announcement aside from reflecting the adoption of US Dollar reporting by the Group.
17 Jul 18
Interims for the period to May 2018 delivered EBITDA of $6.8m from $41.2m turnover. Contracted revenue represents 77% (FY17: c75%) of the FY18 target and sales orders 40% ahead of last year, leaving forecasts unchanged. Gross margin of 42.1% (1H17: 44.4%) reflected expected market-wide pressure described at prelims in January; however, cost control reduced opex 3% (vs 1H17), including partial benefit from the completed rationalisation of R&D centres (3 to 2), resulting in annualised savings of $1.4m. Cash generation was typically strong (pre exceptionals), lifting cash to $15m and leading to unchanged FY expectations of $23.5m demonstrating balance sheet strength. Abort fees on M&A deals shows management is strategically active; the dividend is 10% ahead of last year; and momentum is strong, with the order book healthy. Amino continues to demonstrate that it is a software-focused solutions provider delivering TV to customers for clients, anytime, anywhere and on any device. We reiterate our 275p target and look forward to further contract win newsflow.
17 Jul 18
Morning Note – 17 July 2018
Amino Technologies (AMO): Corp Delivering TV-as-a-service | Destiny Pharma (DEST): Corp Research collaboration – biofilms | Flowtech Fluidpower (FLO): Corp HY trading update confirms strong H1 growth | Ideagen (IDEA): Corp Low risk in delivering compliance | Independent Oil & Gas (IOG): Corp Thames pipeline integrity update | Iofina (IOF): Corp H1 2018 update
AMO FLO IDEA IOG IOF DEST
17 Jul 18
Amino Technologies (AMO LN) Solid interims – outlook maintained | City of London Investment Group (CLIG LN) Earnings preview in line, FuM performance aided stronger sterling | Clinigen Group (CLIN LN) In line FY trading update & product acquisition | EMIS Group (EMIS LN) In line H1 update | Gateley (GTLY LN) FY results – continuing progress | NCC Group (NCC LN) Full year in-line, good cash generation | Scapa Group (SCPA LN) Q1 trading in line with expectations | SDL (SDL LN) Acquisition accelerates premium solutions strategy | Springfield Properties (SPR LN) Strong conclusion to FY18, Dawn integration on track
AMO CLIG CLIN EMIS GTLY NCC SCPA SDL SPR
17 Jul 18
Small Cap Breakfast
CentralNic-Schedule 1 from the business operating in proprietary retail platforms selling domain names and associated web presence services including hosting and email on a subscription basis, has acquired KeyDrive S.A which constitutes a RTO. Raising £24m at 52p, combined market cap of £88.7m Trackwise—established business that manufactures specialist products using printed circuit technology. Offer TBA. Due Late July Ovoca Gold (to be renamed Ovoca Bio PLC) - RTO of IVIX, a Russian company developing a drug candidate for the treatment of female sexual dysfunctions. No monies to be raised, market cap of £8.5m, due 30 July Nucleus Financial—independent wrap platform provider . FYDec17 revs £40.36m and PBT of £5.1m. Offer TBA. Due late July. Kropz PLC-Intention to float by the emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa
AMO BVC NCC HNT KMK SOM FLX IOG EMIS
17 Jul 18
H1 18 impacted by seasonality, FY guidance maintained
In our view Amino’s trading update, while highlighting the expected return to normal seasonal phasing, also has positive implications for profitability. Against a backdrop of higher input prices, particularly in the memory market, and lower yoy H1 revenue, full-year 2018 guidance is unchanged. To us this signals management’s confidence in the outlook for margins. Revenue visibility improved during H1 18, and the order book remains strong, although reported revenues were lower. The group continues to make progress in high-margin software sales. We leave earnings estimates unchanged following the announcement.
06 Jun 18
Amino Technologies (AMO LN) Full year expectations unchanged | Findel (FDL LN) Year of progress and delivery to instill confidence | Instem (INS LN) Contract win for Samarind RMS | Microsaic Systems (MSYS LN) Clear path to commercial success | Summit Therapeutics (SUMM LN) Q1 results: Phase II DMD trial on track for Q3 data release
AMO STU INS MSYS SUMM
06 Jun 18
Small Cap Breakfast
Anexo -specialist integrated credit hire and legal services group. Offer TBA. Due 19 June. i-nexus—develops and provides strategy execution software to assist global enterprises in effective execution of their strategic plans and initiatives looking to jon AIM. Offer TBC, expected 19 June Yellow Cake will use its expertise to generate value through the ownership of physical U3O8 (Uranium) together with a range of activities and opportunities connected with owning physical U3O8. Acquiring supply contract for up to $170m. Offer TBA. Tekmar— technology provider of protection systems for subsea cable, umbilical and flexible pipes and offshore engineering services—Offshore wind farms and Oil & Gas. Revenue of £21.9m and Adjusted EBITDA of £4.9m Offer TBA Knights Group— UK regional legal and professional services businesses. FYApr18 rev £34.9 million and adjusted operating profit was £6.8 million excluding Turner Parkinson (acquiring on IPO). Offer TBA Aquis Exchange—a founder-led, pan-European Multilateral Trading Facility and exchange and regulatory technology developer and service provider is looking to join AIM. Offer TBC, expected 20 June. TransGlobe Energy Corporation—an independent international upstream oil and gas company with headquarters in Calgary, Canada is looking to join AIM. No Capital to be raised, market cap of £131m. Expected 29 June Block Energy— UK based oil exploration and production company whose main country of operation is the Republic of Georgia. Raising £5m at 4p. Mkt cap £10.3m. Due 11 June. Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June. Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Raising €75m at €1. Due 8 June
AMO MIN EMH APGN HVN POLX SAA INS ELCO MSI
06 Jun 18
Small Cap Breakfast
Stratmin Global Resources RTO of Signature Gold a specialist Australian gold exploration company focused on the exploration and development of large-scale Intrusion Related Gold System. Offer TBA. Due 4 June. Will leave AIM under rule 41.
AMO ZOE VRP NKTN NTOG ALS BIRD XPD CNS SRES
04 Jun 18
Strong performance from quality – 11 focus stocks
We have refreshed our quality style screen for the second time and report on style performance since the last refresh in October. Performance has been very strong, outperforming the small-cap index by c.1600bps (weighted basis) and c.1000bps (unweighted). There has been volatility with the market and this style has yet to be tested in a concerted down market, but in a flat or rising market quality appears to be a successful investment style in small-caps. We have highlighted 11 focus stocks in the new screen and will report back again on performance when we next refresh the screen in about 5-6 months’ time.
AMO LIO GHT CHH ZYT DOTD GTLY RIV FCRM TAM PMI
24 May 18
Amino Technologies (AMO LN) Contract win with T-2 in Slovenia | ITE Group (ITE LN) Acquisition & Rights Issue | Lookers (LOOK LN) Continued outperformance with growing confidence in forecasts | Northgate (NTG LN) In line year end update; VOH growing, but margins still under pressure | Zytronic (ZYT LN) Financial sector holds back progress elsewhere
AMO HYVE LOOK NTG ZYT
15 May 18
An evolving story with multiple growth drivers
Amino’s full year results earlier this week showed continued progress, with high quality software and services revenue continuing to increase within the mix. FY’18 has started positively, with two new contract wins post the period end and a strong order backlog and pipeline. We continue to believe that the group’s evolving product portfolio is well aligned with industry trends and the increasing level of recurring revenue should drive a re-rating over time. With multiple medium term growth drivers, and significant balance sheet strength to augment organic growth with earnings enhancing acquisitions, we retain our Buy recommendation and 243p target price.
08 Feb 18
Finals in line, FY’18 outlook positive
Amino’s FY’17 results were well flagged at the December trading update, with revenue and profit in line and year end cash well ahead of previous expectations. Group revenue was flat at £75.3m however the expected mix change masked 27% constant currency growth in recurring software revenue. Adjusted EBITDA of £15.4m is c.5% ahead of expectations, reflecting strong gross margins and good supply chain management. This was offset by a higher amortisation charge, resulting in adjusted PBT in line with expectations at £11.2m (+10% y-o-y). FY’18 has started positively, with two new contract wins post the period end and a strong order backlog and pipeline. We continue to believe that the group’s evolving product portfolio is well aligned with industry trends and the increasing level of recurring revenue should drive a re-rating over time. With significant balance sheet strength to augment organic growth with earnings enhancing acquisitions, we retain our Buy recommendation and 243p target price.
06 Feb 18
In line 2017 results
Amino has reported FY 17A results in line with both market expectations and our own forecasts. Margin performance was particularly strong, reflecting an improvement in the product mix and tight cost control. The group made good operational progress across the business and, in our view, is well placed to exploit additional growth opportunities beyond the traditional IPTV hardware business. We leave FY 18E earnings estimates unchanged following the release and continue to believe the maintained progressive dividend policy (+10% y/y) demonstrates management’s confidence in the outlook.
06 Feb 18
Prelims show upscaling potential
Prelims are in line with the strong cash generative performance indicated in the trading update, with EBITDA a comfortable +5% ahead (+14% EBITDA growth despite flat revenue performance) and adjusted PBT +3%. While revenue at constant currency retreated 7% due to product mix changes which largely derived from territorial product preferences, gross margin expansion included strong supply chain management despite strong headwinds derived from component pricing movement. Cash remained strong at £13m even after the expected unwind of 1H17 £5m working capital inflow, and the company retains a robust balance sheet offering comfortable capacity for 10% dividend growth, growing R&D, and acquisition potential. As the product set evolves to offer an increase in recurring revenue through upscaling customers (network operators) to software and service assurance, Amino remains in a very strong position to be the enabler for delivery of the end to end platform for TV in the cloud, anywhere and on any device, for new and existing customers. Target 275p (260p), with revenue growth prospects completing the investment case.
06 Feb 18
Amino Technologies (AMO LN) Finals in line, FY’18 outlook positive | Mattioli Woods (MTW LN) Sustained positive performance in H1, confirming recent update | Tribal Group (TRB LN) Microsoft collaboration | Walker Greenbank (WGB LN) In line update exposes oversold valuation on 40% discount to prior avg
AMO MTW TRB WGB
06 Feb 18
Reference contract signed in the Netherlands
Amino has announced the deployment of an end-to-end multiscreen entertainment service with Dutch multi-service (cable TV) operator Delta. The release is light on detail as to the contract size and potential value to Amino, although management confirm the deal will not have a material incremental impact on current-year revenues. We therefore make no revisions to forecasts following the announcement, but believe the contract represents another strong endorsement of the MOVE TV platform. It also demonstrates Amino’s capability to leverage existing customer relationships and also its ability to assist customers migrate existing cableTV subscriber bases to IP-based multiscreen service delivery.
11 Jan 18
Amino Technologies (AMO LN) End-to-end contract win with DELTA | Burford Capital (BUR LN) Burford ups the pace again and signals another bond issue | Future (FUTR LN) Capital Markets Day | Liontrust Asset Management (LIO LN) Impressive net inflows, increased target price | Senior (SNR LN) Positive end to year - tax benefit | Sigma Capital Group (SGM LN) FY17 in line, upgraded FY18e, increased bandwidth | The PRS REIT (PRSR LN) Equity fully committed, close to securing debt Zotefoams (ZTF LN) Positive year end update, expect to remain at BUY
AMO BUR BUR FUTR LIO SNR SGM ZTF
10 Jan 18
Small Cap Breakfast
Cradle Arc—holding company of a group of companies focused on the exploration and development of precious and base metals projects in Africa. Offer raising £2.4m with market cap of £20.13m. Expected late Jan 2018 Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £75m market cap. FYMar18E rev £241.5m and £7.19m PBT. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
AMO SGM QUIZ FRR NKTN VERS WATR EMAN 9537
10 Jan 18
Solid trading and share buybacks planned
Amino has released a positive update on trading for the year to 30th November 2017. Management disclosed that trading remained solid in the second half of FY17E, with adjusted pre-tax profit expected to be in line with market expectations and an “excellent” pipeline. In our view, the prospect of material share buybacks (announced on Friday) sends a positive signal on the outlook for profits and cash generation, and we leave earnings estimates unchanged.
05 Dec 17
N+1 Singer - Amino Technologies - FY’17 in line with cash well ahead of expectations
Amino’s brief full year trading update confirms continued progress, with gross profit and adj. PBT in line with expectations and cash significantly ahead. A change in product mix has resulted in flat revenue year on year however, with a very strong pipeline and growing traction for its software products, we believe the group is well placed going into FY’18. The shares trade on Nov’18 ex cash PER of just 11.6x, which we believe is very attractive for a business which is well aligned with industry trends and has an improving revenue profile. With further earnings accretion likely through utilisation of the strong balance sheet we leave our Buy recommendation and 243p target price unchanged.
05 Dec 17
Small Cap Breakfast
Pelatro—provider of proprietary software solutions to enterprise-level customers for various aspects of precision marketing for use in B2C applications. Offer TBC, expected 19 December 2017 Fusion Antibodies—Belfast based contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications. Offer TBA. Due Mid Dec. Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m. Due 19 Dec. Bushveld Minerals—RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine. Range Resources— oil and gas company listed on the ASX plans to admit to AIM on 13 Dec with market cap of £17.4m. Also acquiring Range Resources Drilling Services Limited, an oil services business based in Trinidad & Tobago with extensive drilling capabilities. Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity. Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec. Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT Belluscura— Provider of premium medical devices at value prices to address part of the global unmet need for affordable, premium quality medical devices. Raising £7.5m to £10m. Offer TBA. Due early Dec Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native invideo advertising . 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 6 Dec. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
AMO DWHT PGR PCIP MPM SAT CER ALSP HZD
05 Dec 17
The Joy of Techs
This quarter we use finnCap’s Slide Rule to provide both top-down and bottom-up analysis of the UK’s Technology and Telecoms sectors. Our findings are very reassuring: the Tech sector scores the best (across all sectors) when considering Growth and Quality – Taptica*, Frontier Developments* and dotDigital* in particular stand out on these metrics. Given these attractive characteristics and growth prospects, the Tech sector is unsurprisingly one of the most expensive – currently trading at 17.2x FY1 EV/EBIT and 23.8x FY1 P/E, versus 15.0x and 18.5x respectively for the wider market. Despite valuations appearing high, we believe there are value opportunities. For example, Proactis* features in finnCap’s QVGM+ portfolio (ranked 17/462) – the company offers attractive organic and inorganic growth, with earnings forecast to grow by 26% CAGR over the next two years, but despite this, only trades on 15x FY1 earnings and offers 8% FCF yield in FY2.
AMO 7DIG ALT ARTA BOTB BLTG CTP CITY D4T4 DTC DOTD ELCO FDEV GBG IDEA IDOX IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET PHD QTX QXT RCN 932 SEE SIM SPE SRT STR TRMR TAX TEP TPOP TRAK UNG VIP ZOO CYAN ONEV SSY ABAL WJA
09 Nov 17
Encouraging contract win in Germany
Amino has announced a contract win for a hardware and software deployment with Deutsche Glasfaser (“DG”), the largest independent fibre-to-the-home (“FTTH”) network operator in Germany. The release is light on detail as to the contract size and potential value to Amino, and we make no revisions to forecasts. However, in our view, the deal further validates the strength of the Amino devices and software offerings, and enhances market positioning in the sizeable German IPTV market.
18 Sep 17
N+1 Singer - Morning Song 18-09-2017
Amino Technologies (AMO LN) German contract win | City of London Investment Group (CLIG LN) In line with Q4 update: earnings grow, small increase in dividend | Ergomed (ERGO LN) Strong H1 growth; PeproStat™ Phase IIb data expected in October | Itaconix (ITX LN) A period of meaningful commercial progress | Retail Recovering sector indicators for 2018 likely to trigger outperformance
AMO CLIG STU HFD BWNG ERGO ITX
18 Sep 17
Stride Gaming (STR): Changing pace (BUY) | Lombard Risk Management* (LRM): Strategic alliance with Euroclear (CORP) | Wentworth Resources (WRL): Payments received (BUY) | Petra Diamonds (PDL): Annual results (BUY) | Amino Technologies* (AMO): German contract win (CORP) | MP Evans (MPE): Excellent interim results (BUY)
AMO STR LRM WRL PDL MPE
18 Sep 17
Small Cap Breakfast
Springfield Properties—Scottish housebuilder. Intention to float. Offer TBA “Our turnover exceeded £100 million for the first time this year and now we employ around 500 people. This IPO is the next step in our growth.” | Warehouse REIT - The Company will invest in a diversified portfolio of UK warehouse assets located in urban areas. The Company is targeting a dividend yield of 5.5p equivalent to a yield of 5.5 percent. for the year ending 31 March 2019. Issue price 100p. Offer TBA. Due 20 Sep | OnTheMarket—Intention to float on AIM to raise c. £50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m. | People’s Investment Trust—Objective of sustainable wealth creation. Also to list on the Social Stock Exchange. Targeting £125m raise on 17 Oct. No performance fees or executive bonuses in order to focus on long term rather than short term performance. | Charter Court Financial Services Group—Intention to float. Specialist lender serving the UK residential mortgage market. The net mortgage loan book stood at £4.4 billion as at 30 June 2017 growing at a compound annual growth rate of 92 percent since 31 December 2014. Part vendor sale and £20m primary raise. | ContourGlobal LP—Report on Bloomberg that the thermal energy power generator is considering a London listing. | Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Offer raising £200m at 100p. The Company has decided to extend the closing date for the Placing, Offer for Subscription and Intermediaries Offer to 1 August 2017. The Company may bring forward this closing date at any time. Admission 15 September 2017
AMO ALM CNS STX ACSO PANR TXP NAUT ONC RBD
14 Sep 17
Blancco Technology (BLTG): Cash or growth – choose one (SELL) | Abzena (ABZA): Trading update (U/R) | Nautilus Marine Services* (NAUT): 2017 interim results (CORP) | Shield Therapeutics (STX): Interim CFO appointed (BUY) | Hurricane Energy (HUR): Operational update (BUY) | Amino Technologies* (AMO): New contract win – Finland (CORP) | Alliance Pharma (APH): Interims highlight strong free cashflow (BUY)
AMO BLTG ABZA NAUT STX HUR APH
14 Sep 17
TMT UPDATE - 17.07.17 (FBT.L, CALL.L, CCT.L, AMO.L, FLX.L)
Forbidden Technologies plc (FBT.L, 5.75p/£10.4m) North American pilot opens multiple potential opportunities (12.07.17) | CloudCall plc (CALL.L, 120p/£24m) H1 trading update: accelerating growth and positive KPIs (12.07.17) | Amino Technologies plc (AMO.L, 193p/£138m) Interims: Enable provides interim upgrade and new sales route (11.07.17) | Falanx plc (FLX.L, 7p/£8.8m) Prelims: Increased push into cyber security (10.07.17) |
AMO BIRD CALL CCT FLX
17 Jul 17
N+1 Singer - Amino Technologies - Strong momentum at attractive valuation
Amino’s H1’17 results on Tuesday showed continued momentum in both device sales and recurring software revenue, leaving the group very well placed to achieve our full year expectations. Trading in the first half benefitted from a healthy FX tailwind but we were encouraged to see double digit underlying constant currency growth in both key revenue segments. Net cash at May’17 of £13.1m benefitted from a large working capital inflow, which we expect to reverse in H2, however the group still has plenty of firepower for further earnings enhancing acquisitions. We leave our full year forecasts essentially unchanged but see scope for outperformance in the second half. We retain our 243p target price and Buy recommendation.
13 Jul 17
N+1 Singer - Amino Technologies - Strong underlying device sales in H1’17, further boosted by FX
Amino’s strong H1’17 performance was largely flagged at the trading update in June, however we are encouraged by the detail, showing 11% underlying device revenue growth (versus 4% underlying growth for the group as a whole). Group reported revenue was up 21% y-o-y to £39.9m, with Adj. PBT up 64% to £6.9m. A large working capital inflow resulted in net cash at May ’17 of £13.1m, well ahead of our £9.1m forecast, however we expect this to reverse in H2. Amino continues to align its customer offering with the industry-wide shift to IP and cloud-based TV service delivery, leaving it well placed to help operators make the transition. We do not expect to make any major changes to our full year forecasts at this stage but believe the group is very well placed to meet our expectations. We retain our 243p target price and Buy recommendation.
11 Jul 17
Strong H1 2017 delivery
Amino has reported H1 17A results ahead of management’s expectations, and a closing net cash position (£13.1m) confirmed as having more than doubled over FY 16A. Key metrics saw impressive growth, with turnover and adjusted EBITDA up 21% and 70% respectively. IP device sales were strong, particularly in the Americas. In software, the group continues to report positive momentum. We leave earnings estimates unchanged at this stage and believe the maintained progressive dividend policy (+10% y/y) continues to demonstrate management’s confidence in the outlook.
11 Jul 17
Gross margin strength
Interims highlight strong gross margins with the benefit of revenue mix effects. A very strong first half has delivered £6.9m adjusted PBT (+64% vs 1H16 and representing 63% of FY expectations) from revenue of £39.9m (representing 51% of FY expectations). As revealed at the trading update, very strong cash generation from unusually beneficial working capital movement led to period end cash of £13.1m (FY16: £6.2m). Despite 21% organic revenue growth and a strong order book, timing of large orders in 2H remains elusive to predict but with evident 1H margin expansion from previous expectations we trim FY revenue growth forecasts 5% with no effect on full-year gross profit, EBITDA and cash. The stock remains cheap, cash generative, and growing, with a dividend yield above 3.5%. Target 260p reiterated, with likely upward pressure on forecasts and target price as the revenue mix evolves in improving scale and profitability.
11 Jul 17
STM* (STM): Regulation changes…demand doesn’t (CORP) | Mortice* (MORT): Forecast upgrade and target price increase (CORP) | OptiBiotix* (OPTI): A sweet opportunity (CORP) | Amino Technologies* (AMO): Gross margin strength (CORP) | Altitude (ALT): Senior management appointment (CORP)
AMO STM MORT OPTI ALT
11 Jul 17
Solid H1 2017, on track for the full year
Amino has this morning published a positive trading update for the six months to 31 May 2017. Trading in the first half “was at record levels” and this was accompanied with strong margins and an impressive cash generation – the net cash position improved by £6.9m versus the closing FY 2016A figure. Although changes in the product mix are expected to impact margins in the second half, we note management commentary that the business is on track to meet their FY 2017E expectations. We therefore leave forecasts unchanged following the announcement.
06 Jun 17
N+1 Singer - Amino Technologies - Another strong period
Amino has released a good trading update for the six months to May’17. The group carried strong momentum into the period, having delivered four upgrades in a row in FY’16. This strong momentum has been maintained, with revenue expected to be c.£40m in H1’17 (48% of our FY expectations, versus a traditional 45:55 weighting). Net cash is significantly ahead of our expectations at £13.1m (N+1se: £9.1m). We expect the strong performance to continue into H2’17, but with new products expected to lower margins in the short term, we prudently leave our forecasts unchanged at this time. The shares trade on a Dec’17 PER of 14.9x and yield 3.2%. We believe this remains attractive for a highly cash generative business which is very well placed to meet the changing demands of its end markets. We increase our target price to 243p (from 215p) and retain our Buy recommendation.
06 Jun 17
N+1 Singer - Morning Song 06-06-2017
Amino Technologies (AMO LN) Another strong period | Carclo (CAR LN) Positive trading; improvement in pension and reserves | FreeAgent (FREE LN) Debut prelims strong; executing growth strategy | Gooch & Housego (GHH LN) Good H1 growth with strong prospects | IDOX (IDOX LN) Solid H1; focused strategy driving execution | Oxford Metrics (OMG LN) Benefits of new strategy beginning to show | Vp (VP/ LN) Strong momentum drives FY18 upgrades | WYG (WYG LN) Positive cashflow surprise, FY18 guidance reiterated
AMO CAR VP/ GHH IDOX OMG WYG
06 Jun 17
Small Cap Breakfast
Touchstone Exploration— Oil exploration and production company active in the Republic of Trinidad and Tobago. Interests of approximately 90,000 gross acres. Production c. 1,300 boepd. Raising £1.45m. Expected mkt cap £7.5m. Due 26 June. I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission. Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission in Early June Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June. DP Eurasia—Intention to float from the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia. £20m primary raise plus a partial vendor sale. Film Finances—Sky News reports that ‘movie financing company with credits including the Hollywood hits La La Land and Nocturnal Animals is plotting a blockbuster premiere on the London stock market that will value it at several hundred million pounds.’ Expected ‘during the summer’. AIB—Intention to float from AIB, Ireland's leading retail and commercial bank . The Minister for Finance intends to sell approximately 25% of the Ordinary Shares of AIB. Prospectus and announcement of the price range due in mid-June 2017. Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. Flying Brands (FBDU.L)—Prospectus approved by FCA. RTO of Stone Checker Software, supplier of technology solutions in the field of kidney stone analysis and prevention. Has raised £550k at 3p. Subject to GM on 15 Jun. Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe
AMO MXCT PREM GUS PYC VP/ FREE CPS MERC ICON
06 Jun 17
Gooch & Housego^ (GHH): Interim results – in line with FY expectations (HOLD) | Carclo (CAR): FY results slightly ahead of expectations (BUY) | GB Group (GBG): International and acquired growth drive GB on (BUY) | Joules Group (JOUL): Trading update beats expectations (BUY) | Acal (ACL): Strong H2 backed by cash flow, strategy delivering (BUY) | Amino Technologies* (AMO): Strong trading update (CORP) | KCOM* (KCOM): Prelims on track – stronger second half (CORP) | Fulcrum (FCRM): Converting a large market opportunity (BUY) | Idox (IDOX): Interims demonstrate expansion potential (BUY)
AMO GHH CAR GBG JOUL DSCV KCOM FCRM IDOX
06 Jun 17
The Joy of Techs
Enterprise-focused niche applications of tech illustrate how, while trends appear to be fluctuating away from the current poster children of fintech and the Internet of Things, in fact these developments are refining appropriate application of existing technologies.
AMO 7DIG ARTA BVC BOTB CTP CITY D4T4 DTC DOTD ELCO FDSA FDEV GBG IDEA IDOX IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET PHD QTX QXT RCN 932 SEE SIM SPE TAX TEP TPOP TRAK UNG VIP ZOO ONEV SSY ABAL WJA
27 Mar 17
N+1 Singer - Amino Technologies - Strong results drive further upgrades
Amino has released a strong set of results for the year to Nov’16. Group revenue grew 80% (+7% on an organic, constant currency basis) to £75.2m with adj. PBT up 96% to £10.2m. These results are 2% and 5% ahead of our recently upgraded forecasts at the revenue and adj. PBT level respectively. The group has also split out software and services revenue for the first time (12% of total revenue), highlighting the mix change which is occurring within the business. Strong cash generation resulted in net cash at the year end of £6.2m. The group made a number of strategic improvements in the year and has now fully embraced the transition to the cloud, leaving it very well placed to benefit from current market trends. Amino goes into FY’17 with strong momentum and enhanced visibility, giving us confidence of continued strong execution from here. Buy.
07 Feb 17
2016 financials demonstrate strong execution
With the outcome in line with our forecasts, the key message from Amino’s FY 2016 results is one of strong execution. The company is gaining solid commercial traction from the expanded product portfolio and re-focused sales and marketing activities. The outlook statement provides positive commentary on the sales pipeline and order book, and the re-iteration of the existing progressive dividend policy for the current financial year is a further indication of management’s confidence.
07 Feb 17
Scale, breadth, and growth
The benefits of Amino's 2015 acquisition of Entone are clear to view – Amino’s scale is providing the benefits of client and territorial diversification; increased breadth product and services opens demonstrably successful opportunities with yet further clients; and the combination drives revenue, profit, and cash. While transformation is an overused word in the growth company environment, this time it is appropriate and has been delivered. With a 6% uplift to adjusted diluted EPS and 3% upgrade to FY17 EBITDA and adj PBT from +7% upgrade to revenue forecasts, we lift our target price to 220p (200p).
07 Feb 17
Small Cap Breakfast
Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management Eco (Atlantic) Oil & Gas—Schedule One Update. Now expects admission ‘early February’. Ramsdens Holdings –Schedule One from the financial services provider and retailer, operating in the core business segments of foreign currency exchange, pawnbroking loans, precious metals buying and selling and retailing of second hand and new jewellery. Expected admission to AIM 15 Feb raising circa £15.6m. Expected mkt cap £26.5m.
AMO XLM MDXG BHRD ENTU RGM WGB ASA HRN
07 Feb 17
Europa Oil & Gas* (EOG): Wressle planning resubmission (CORP) | Premaitha Health* (NIPT): New customer wins in Southern Europe (CORP) | Amino Technologies* (AMO): Scale, breadth, and growth (CORP) | Hurricane Energy (HUR): Lancaster technical analysis (BUY) | Connect (CNCT): Disposal strengthens balance sheet and reduces risk (BUY) | Mattioli Woods (MTW): Acquisition and results (BUY) | RM Group (RM.) Prelims and acquisition (BUY)
AMO EOG YGEN HUR CNCT MTW 932
07 Feb 17
The Slide Rule
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
AMO APF FDEV FCRM IDEA MAI PAF PHD SCS TRMR
12 Jan 17
Amino has this morning published a positive trading update, with figures for the year to November 2016 slightly ahead of our forecasts. We upgrade our 2016 estimates modestly, to reflect confirmation of this expected strength and upbeat comments on order backlog. Having recently upgraded our 2017 estimates, we choose to leave these unchanged for now, but will revisit them in February 2017 alongside full FY16 results.
08 Dec 16
N+1 Singer - Amino Technologies - Trading update confirms strong full year results
Amino has released a short trading update for the year to November 2016. The company announced in October that trading had been strong, driven by record August orders and favourable FX movements. The full year performance is now expected to be slightly ahead of revised expectations, with strong cash generation resulting in £6.2m of net cash at the year end. The strategic improvements made in the year have resulted in greater visibility for the business, and a solid order backlog gives us confidence of further strong performance in FY’17 and beyond. Amino has embraced the transition to the cloud and is now well placed to benefit from current market trends. Today’s announcement is the third upgrade this year, leaving the group trading on an FY’17 PER of just 13.6x with a 4% dividend yield. We increase our target price to 191p. Buy.
08 Dec 16
Abzena (ABZA): Interim results indicate happy customers (BUY) | Horizonte Minerals* (HZM): Fund raise completed (CORP) | SacOil* (SAC): Half-year trading statement (CORP) | Revolution Bars (RBG): New openings (BUY) | Amino Technologies* (AMO): Multi operator FUSION roll out (CORP)
AMO ABZA HZM SAC RBG
30 Nov 16
Joy of Techs
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
AMO 7DIG ARTA BVC BOTB CTP CITY D4T4 DTC DOTD EGS ELCO FDSA FDEV GBG IDEA IDOX IMG IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET PHD QTX QXT RCN 932 SEE SIM SPE TAX TEP TPOP TRAK UNG VIP WAND ZOO ARC ONEV SSY ABAL WJA
21 Nov 16
Positioned for further success
Amino is a material player in the global market for hybrid-IP and cloud-based TV solutions. This note is published to coincide with an investor education event, and focusses on three things – the summary investment case, the level of Total Shareholder Return delivered over 5 years, and an overview of Amino’s geographic and product presence, set within the context of an evolving and dynamic marketplace.
31 Oct 16
Positive trading update, forecasts increased
Amino has released a positive update on trading for the ten months ending September 2016. The business is benefitting from the twin effects of strong order intake, and favourable currency movements. Management believe the 2016E outcome will exceed current market expectations at the adjusted EBITDA and PBT levels. Following the release, we make upward revisions to forecasts. 2016E revenue and EBITDA increase by 5.1% and 7.7% respectively, 2017E by 4.7% and 6.8% respectively.
10 Oct 16
Significant customer win
Amino has announced a software licensing contract with PCCW media in Hong Kong to provide Amino’s Enable TV device software. Amino’s software will be used to help deliver 4K Ultra High Definition (UHD) experience via PCCW's Now TV brand, through a "Now One" 4K UHD set-top box, delivering advanced features over competing manufacturers’ set-top boxes. While forecasts are unchanged, PCCW is a further tier-one service provider, with a high profile and reputation for innovation: the contract is significant to Amino’s developing prospects and momentum. Target 175p reiterated.
16 Aug 16
Gaining traction in software
Amino has announced a contract win with Hong Kong-based PCCW for deployment of the Enable TV software onto PCCW’s Now One set-top boxes. The release is light on detail as to the contract size and potential value. We note, however, that PCCW is the largest IPTV operator in Hong Kong with over 1.3m subscribers. Following the Cincinnati Bell deal announced in February 2016, the deal validates the strength of the Amino software platform and demonstrates the company is gaining further traction in stand-alone software deployment.
16 Aug 16
N+1 Singer - Morning Song 16-08-2016
Amino Technologies (AMO LN) Software licencing contract win | Earthport (EPO LN) Strong momentum going into FY’17 | H&T Group (HAT LN) Interims in-line, potential earnings catalyst if gold price sustained | John Menzies (MNZS LN) Aviation recovering; currency tailwind drives upgrades | PROACTIS Holdings (PHD LN) Includes a video summary Supplier strategy looks set to transform top line | Sinclair Pharma (SPH LN) Forecast update due to change in financial year-end: remains a Buy | Ten Alps (TAL LN) Loss making publishing business to close
AMO SPH MNZS HAT EPO PHD
16 Aug 16
Australian fintech company ThinkSmart Ltd intends to switch its quotation from ASX to AIM. This is the culmination of a strategic review started nearly a year ago. Henderson is subscribing for £5m-worth of shares at 25p (A$0.44) each in a pre-flotation placing at a premium to the ASX market price, which will give the fund manager 17% of the enlarged share capital. ThinkSmart requires regulatory approvals and a ruling from the Australian Taxation Office in order to go ahead with the transfer of quotation. Shareholders will also have to agree to the move. The introduction to AIM is expected to happen in early November, following a tender offer for up to 10 million shares. The cash raised from Henderson will be used to develop the business but it will also help to finance the tender offer, which will be at an indicative share price range of A$0.38 to A$0.55. ThinkSmart provides digital, paperless and retail point of sale finance services via its SmartCheck technology. Dixons Carphone Group subsidiary Dixons Retail is a major customer and the relationship goes back 13 years. Together they have developed a leasefinance package called Upgrade Anytime, which enables customers to upgrade to the latest computer and consumer electronics equipment. A contract has recently been won with the Carphone Warehouse subsidiary. Although ThinkSmart is based in Western Australia it also has an office in Manchester.
AMO STR AGL MTFB VCP GHE
15 Aug 16
The Joy of Techs
Mobile money has been slow to deliver but investors need to stay engaged as there are plenty of reasons as there are plenty of reasons for success. Mobile penetration and network coverage are growing inexorably and where communication leads, transactions follow, as e-commerce has proven. Banking and payments lead the way but it will embrace other financial services too, from insurance to cross-border remittance. Slowly but surely, mobile money is coming of age.
AMO 7DIG AN ARTA BVC BOTB CTP CITY D4T4 DTC DOTD EGS ELCO FDSA FDEV GBG IDEA IDOX IMG IGP IOM KBT KCOM KWS LRM MAI NASA NET PHD QTX QXT RCN 932 SEE SIM SPE TAX TEP TPOP TRAK UNG VIP WAND ZOO ARC ONEV SSY ABAL WJA
15 Aug 16
Opti Biotix Health * (OPTI.L) | Hutchison China Medi (HCM.L) | FairFX Group (FFX.L) | Amino Technologies (AMO.L) | Provexis (PXS.L) | APC Technology Group (APC.L) | Ithaca Energy (IAE.L) | Defenx (DFX.L) | Avingtrans (AVG.L) | Flowtech Fluidpower (FLO.L)
AMO OPTI EQLS PXS APC IAE DFX PXS AVG FLO HCM
02 Aug 16
Robust interims, strong cash flow
Interims demonstrate a return to profitable revenue development, with EBITDA of £5.2m delivered from revenue of £33m, including the benefit of the August Entone acquisition. In line with the robust trading update of 6 June, strong cash performance lifted net cash at £3.1m, better than expected, and comfortably supporting the 1.39p interim dividend, in line with unchanged full-year dividend forecast which generates a 5.4% yield to November 2016. With some UK costs but mostly US$ or € revenue, current FX rates may benefit 2H16, with the territorially diverse customer base supporting continuing optimism. Forecasts are amended to accommodate evolving trends in lower total R&D, and lower tax. Target 175p reiterated.
11 Jul 16
Fulcrum (FCRM): Market opportunity more than doubled (BUY) | Frenkel Topping* (FEN): Attractive niche financial adviser and investment manager (CORP) | Amino Technologies* (AMO): Robust interims, strong cash flow (CORP) | Surface Transforms* (SCE): Technology development agreement (CORP) | Scientific Digital Imaging* (SDI): DoH guidance update (CORP) | Sound Energy (SOU): Tendrara update
AMO FCRM FEN SCE SDI SOU
11 Jul 16
New look Amino delivering
Amino’s positive trading update for the six months to May ’16 gives us confidence that the group is back on track after the sales execution issues experienced at the back end of FY’15. Revenue and adjusted PBT are in-line with expectations, with strong cash generation resulting in net cash of £3.1m at the end of the period. The acquisitions of Entone and Booxmedia have been successfully completed with synergies achieved in excess of original expectations. The newly restructured sales team is performing well and the group has an encouraging order backlog going into the traditionally stronger second half. We are not making any changes to our forecasts at this stage but believe our full year expectations are well underpinned. Trading on 5.3x FY’16 EV/EBITDA with a 6% yield the shares are attractive. Buy.
06 Jun 16
Avingtrans^: Cash proceeds offer huge opportunities (BUY) | Somero Enterprises*: Encouraging trading update (CORP) | Support Group: Analyst interview | Premaitha Health*: Analyst interview (CORP) | Amino Technologies*: Robust trading update (CORP) | Hardide*: Interim results (CORP)
AMO AVG SOM YGEN HDD
06 Jun 16
Appointment of new CFO
Amino has appointed Mark Carlisle as Chief Financial Officer. Mark joins the group from Crossrider Plc, where he is currently CFO, and has previous experience as CFO of Ffastfill Plc and Financial Controller at Kewill Group Plc. Julian Sanders will continue as interim CFO until Mark joins the group on 22nd August. We see the appointment of a full time CFO as a positive as Amino looks to put the disappointment of 2015 behind it. Post the recent acquisitions of Entone and Booxmedia, the group has a coherent strategy in place to succeed in the evolving IPTV/OTT market. The shares look attractive trading on just 5.3x FY’16 EV/EBITDA and yielding 6.0%. Buy.
31 May 16
The Joy of Techs
This quarter's topic: Feasting on Red Tape. 2016 harbours every chance of being a stultifying year, given the imminent local and London mayoral elections, the looming hurdle of Brexit, the summer doldrums, the bizarre potential outcome of the US presidential election and then the home strait to Christmas. Excuses for inactivity abound with regard to spending IT capex budgets.
AMO 7DIG AN ARTA BVC CTP CITY DTC DOTD EGS ELCO FDSA FDEV GBG IDEA IDOX IGP IOM D4T4 KBT KCOM KWS MAI NASA NET PHD QTX QXT RCN 932 SEE SIM SPE TEP TPOP TRAK UNG WAND ZOO ARC ONEV SSY
04 May 16
Contract extension with Vodafone Netherlands
Amino has announced that it has extended its collaboration with Vodafone Netherlands for the continued rollout of enhanced IPTV devices for Vodafone’s fibre and DSL-based services across the Netherlands. We do not expect to make any changes to our forecasts on the back of this extension but see it as further proof of Amino’s strong market position post the recent acquisitions of Booxmedia and Entone. The shares trade on a Nov’16 PER of 11.2x and EV/EBITDA of 5.7x, which we see as highly attractive given the strong market drivers and Amino’s alignment with industry trends. We leave our target price at 141p. Buy
18 Apr 16
Major shareholder easyGroup has requisitioned a general meeting at Africafocused airline fastjet to unseat chief executive Ed Winter, who previously announced he would leave, but after a handover period following the appointment of his successor. easyGroup also wants to remove Krista Bates from the board because of concerns about fastjet’s cost base and its cash outflow. easyJet founder Sir Stelios Haji-Ioannou was employed as a consultant in 2011 to help to set up the airline. He was given an initial 5% stake and the right to subscribe for a further 10% of the company. On top of that he got a royalty of 0.5% of revenues for the use of fastjet.com over a ten-year period but this was terminated in return for the issue of £1.51m-worth of shares at the equivalent of 160p each, and an agreement to subscribe for £1m in a placing at the same price. Even after further share issues, he owns 12.6% of fastjet through easyGroup following a recent share purchase. fastjet has been successful in raising money but the share price has fallen sharply over the past three years from the equivalent of £28 after two share consolidations to 67.25p. Sir Stelios accuses Winter of burning through £80m of cash in three years and believes that the company will run out of cash later this year.
AMO MTFB WHI GHE AGQ SAT DOTD
11 Mar 16
Back on track and well placed to succeed
Amino’s FY’15 final results last week were in-line with our revised forecasts with revenue and adj. PBT growing 15% and 19% respectively. Integration of the Entone and Booxmedia acquisitions has been completed and the two combined generated £16.6m of revenue in the year. The previously announced H2 sales shortfall in the core Amino businesses resulted in a c.30% organic revenue decline. The causes of this decline have been swiftly addressed and, post the recent acquisitions, we believe the group has the key strategic pieces in place to take advantage of the shifting trends in the digital entertainment marketplace. We leave our FY’16 and FY’17 forecasts essentially unchanged and introduce FY’18 forecasts for the first time, showing 8% EPS growth. We retain our 141p target price. Buy.
25 Feb 16
Prelims – back on track
Amino prelims summarise an eventful year leading to improved depth of management, greater scale of global opportunities, divisional clarity and a renewed product set. While the post acquisition experience was not without issues, the resulting outcome, and performance in line with expectations established in October, retains strong potential for growth, while cash generation significantly exceeded even original expectations. The Entone acquisition has been substantially integrated. Our target of 175p represents an unchallenging 9x November FY16 EV/EBITDA and, with notable examples of success in Hybrid IPTV (Cincinnati Bell) and Cloud Services (RTL and DELTA, announced in 2H15), momentum is evidently restored.
15 Feb 16
FY’15 in-line; well set for FY’16
Amino has released its final results for the year to November 2015. Revenue and adj. EBITDA of £41.7m (N+1Se: £41.3m) and £7.4m (N+1Se:£7.5m) respectively showed good growth following the acquisitions of Entone and Booxmedia. Adj. PBT came in ahead of our expectations at £5.0m (N+1Se: 4.3m). Integration of both acquisitions has been substantially completed, the management team has been strengthened and the sales team has been restructured, leaving the group well placed going into FY’16. Separately the group has announced that it has started the migration of Cincinnati Bell’s legacy IPTV devices to Amino’s Enable TV software platform, highlighting the strength of the group’s offering post the Entone acquisition. The group has also announced that Julia Hubbard has resigned as CFO. Julian Sanders was already in place as interim CFO and the group will begin the process of recruiting a permanent CFO. With the group now back on track, trading on just 6.0x FY’16 EV/EBITDA and yielding 5.3% the shares look attractive. Buy.
15 Feb 16
Amino Technologies (AMO LN) FY’15 in-line; well set for FY’16 | Eckoh (ECK LN) Eckoh and West collaborate on new 4-year global contract with existing customer | Informa (INF LN) Attractive medium term quality yield play | Renold (RNO LN) FY16 guidance cut on weak & volatile demand | Safestay (SSTY LN) Successful FY15e check-in and positive momentum going into FY16e
AMO ECK INF RNO SSTY
15 Feb 16
The Joy of Techs
This quarter’s topic: Automotive Technology. With the Mobile World Congress approaching at the end of this month and likely to feature so many automotive applications to the extent it should perhaps be renamed the Mobile World of Cars, we examine the growing impact of technology in the automotive industry, from telematics to connected cars and autonomous vehicles.
AMO 7DIG AN ARTA BVC CITY CNS DTC DOTD EGS ELCO FDSA FDEV GBG IDEA IDOX IGP IOM D4T4 KBT KCOM KWS MAI NASA NET PHD QTX QXT RCN 932 SEE SIM SPE TEP TPOP TRAK UNG WAND ZOO ARC CTP SSY
03 Feb 16
Politics will exert considerable influence on markets in 2016 with November’s US presidential election, the UK in/out referendum expected over the summer and the escalating tensions in the Middle East. In each situation, the outcome is not assured and this is likely to drive volatility. There is also scope for other surprises. As widely expected, the US Federal Reserve increased rates in December but the Fed’s rate forecasts (a full percentage point increase p.a. to 3.25% at the end of 2018) are more hawkish than market expectations (about 50bps higher for 2016 and 100bps for 2018). Were the Fed to raise rates per its forecasts, either the US and world economies are more buoyant than many believe or the Fed could imperil the recovery through tightening too quickly. The outlook for the US economy is reasonable with the lower oil price and increased employment benefiting consumer spending. The Eurozone countries will also enjoy the lower oil price as importers and growth is anticipated across many member states. The outlook for China and the countries that rely on exporting commodities to China is more mixed, however. Growth in China seems assured but many believe it will fall short of the official target of 6.5%. The first data points of 2016, the official PMI and Caixin China Manufacturing PMI, both came in below consensus and pointed to a further contraction in manufacturing. The news resulted in sharp falls in Chinese indices, triggering the market ‘circuit breakers’ that were created last September, and weakness in other global markets. India looks set to be the best performing large economy in 2016 up 7.8%, a slight improvement on 2015, another oil price beneficiary. The recessions in the other two BRICs countries (Russia and Brazil) look set to continue. Shifting from macro to micro, 2016 should prove the defining year for many AIM-listed resources companies and we expect the shake out that occurred in 2015 will continue as many micro-caps are unable to secure additional funding. Beyond resources, the outlook is more benign with a stable economic backdrop, further M&A activity and fund inflows looking for better returns.
AMO ORR ADT AXM AMP BOD CHL CLON ARK DCP EVG FISH FRM NAUT HDT KRS LTHM MRS MDZ MCC MTFB OCT PET PREM QRT RLH RDI SAV STAR SRES TAVI TECH VAL WRES SALV MARL THR URA ANR URU
06 Jan 16
Starting to rebuild - Buy
Amino’s FY’15 year end trading update was reassuring, with swift action taken to address the causes of October’s profit warning. We are satisfied that the warning was due to poor sales execution rather than structural market issues or any fault in the strategic rationale for the Entone acquisition. With the sales team now restructured, and Entone fully integrated, we believe the group can deliver good organic growth in FY’16, albeit from a lower base. We reinstated forecasts yesterday showing c.6% organic revenue growth in FY’16, which we believe is conservative. We set a new target price of 141p (14.6x FY’16 PER, 4.3% yield) and return to our Buy stance.
04 Dec 15
AMINO TECHNOLOGIES (AMO LN) Starting to rebuild - Buy | CVS GROUP PLC (CVSG LN) Strategically positive corporate news strengthens growth thesis | IOMART GROUP (IOM LN) Underpinned, with upside from further acquisitions | JD SPORTS FASHION PLC (JD/ LN) Continued strong trading drives 3.8% FY’16 upgrade | SIGMA CAPITAL GROUP PLC (SGM LN) Development of PRS begins ahead of schedule
AMO CVSG IOM SGM JD/
04 Dec 15
Trading update reassures
Amino’s trading update is reassuring, showing revenue and PBT in line with revised expectations post the disappointing October update. The group’s cash position is strong with net cash of £2.1m at the year-end, which is ahead of our original expectations. The Booxmedia and Entone acquisitions have been quickly integrated, leaving the combined group with a strong product set and a significantly strengthened customer base. The sales team has been restructured to provide better focus in all key regions and will now be led by Steve McKay (previously CEO of Entone). We believe that Amino can grow strongly from here however the impact of the FY’15 sales shortfall means that growth will be coming from a lower base. We reset our forecasts this morning showing c.6% organic growth in FY’16 which we believe is conservative. With the shares yielding 5.6%, we reinstate our Buy recommendation and set a target price of 141p.
03 Dec 15
Trading in line
Following the cautious trading statement in October, Amino’s update provides encouragement in a number of areas. Management has confirmed that the business is performing in line with revised market expectations. Detail of actions taken to address sales execution issues previously flagged will be widely welcomed. Finally, integration of the recent Entone and Booxmedia acquisitions is progressing well and the re-iteration of the progressive dividend growth policy is a further positive.
03 Dec 15
Northland Capital Morning Report
Starcom (STAR.L) – CORP: Major supply agreement | Sunrise Resources (SRES.L) – SPECULATIVE BUY*: County Line update | Amino Technologies (AMO.L) – BUY: Trading update | DiamondCorp (DCP.L): Corporate update | Churchill Mining (CHL.L) – SPECUALTIVE BUY*: ICSID Arbitration update | Bilby (BILB.L): Trading update
AMO STAR SRES DCP CHL BILB
03 Dec 15
AMINO TECHNOLOGIES (AMO LN) Trading update reassures | BARR(A.G.) (BAG LN) Q3 in-line but trading environment remains tough | BBA AVIATION PLC Reshaped Group; Aftermarket Caution | CONSORT MEDICAL PLC (CSRT LN) Interims on track | SUMMIT THERAPEUTICS PLC (SUMM LN) First research milestone achieved in strategic alliance | WYG PLC (WYG LN)Interims in line, substantial growth in order book
AMO BAG CSRT SUMM WYG BBA
03 Dec 15
Northland Capital Morning Report
Divergence looks set to dominate the final month of 2015 and set the tone for 2016. The European Central Bank is widely expected to extend its QE economic stimulus programme and could reduce its overnight deposit rate further in an attempt to boost inflation, and more stimulus could come from Japan and China. Meanwhile the Federal Reserve is now expected to lift rates from historic lows. Higher US rates will impact not only the cost of capital in the US but also emerging markets where growth remains much weaker and leverage high. The move by the ECB is unlikely to have a major impact, however, as it is an extension rather than a new tool and the headlines continue to be dominated by politics rather than financial markets (Isis, the refugee/migrant crisis, tensions between Russia and Turkey etc). The respective moves are likely to further weaken the euro in 2016. The UK sits somewhere in the middle. November’s Autumn Statement saw the Chancellor drop his tax credit reduction plans and benefit from a surprise £27bn improvement in the Office for Budget Responsibility’s five year public finances forecast, based on higher tax revenue and lower debt interest. The general shift away from austerity, the protection of tax credits and increased minimum wage should ensure further economic growth.
AMO LTHM EVG TECH ADT QRT AMP AGQ BOD CHL CLON ARK DCP KRS FISH FRM NAUT HDT MRS MDZ MCC MTFB OCT PET PREM RLH RDI SAV STAR ORR SRES TAVI VAL WRES SALV MARL THR URA URU
02 Dec 15
Cautious trading statement
Amino has recently released a cautious trading statement. Both revenue and cost synergies from the recent Entone and Booxmedia acquisitions are ahead of plan, with integration going well. However, a second-half revenue shortfall in the traditional Amino business will impact FY15 financial performance. In light of the announcement, and the recent Entone acquisition, we introduce new forecasts, and note the company’s re-iterated commitment to a progressive dividend policy.
06 Nov 15
Sales shortfall in core Amino business
Amino has released an unscheduled trading update indicating poor sales execution in the core Amino business in the second half of the year. The full year PBT outcome is now expected to be in-line with that achieved in FY’14, indicating a c.24% downgrade versus our forecasts. Net cash balances are expected to be in-line with expectations and the group has confirmed its commitment to a progressive dividend policy. Revenue and synergies from the recent Entone and Booxmedia acquisitions are tracking ahead of plan. This outcome is clearly disappointing, especially coming off the strong momentum indicated at the interim results. We place our forecasts and recommendation under review but expect to retain our positive fundamental view.
27 Oct 15
Amino Technologies (AMO LN) Sales shortfall in core Amino business | Clinigen Group (CLIN LN) AGM statement | Dialight (DIA LN) Strategic review results and weak trading update | MartinCo (MCO LN) Capital markets event reaffirms our positive view | Minds + Machines Group (MMX LN) Q3 update shows further progress
AMO CLIN DIA TPFG MMX
27 Oct 15
Attractive acquisition not fully priced in
Amino’s interim results in July highlighted a good first half, with strong performance in North America the key driver of growth in both revenue and EBITDA. On a standalone basis the group is in a strong position going into H2 but the recent acquisition of Entone for a total consideration of $73.0m is now the main catalyst. We believe the acquisition is a good operational fit and is highly accretive in all forecast years (+33% to FY’16). The combined group is sitting on an attractive multiple of just 13.3x FY’16 PER with a yield of 3.8% and we believe the November trading update could provide a further catalyst for the stock. Our recently upgraded target price is 202p (16.8x FY’16 PER, in-line with the peer group) and we stick with our Buy stance.
01 Oct 15
Northland Capital Morning Report
Arian Silver Corporation (AGQ.L) – CORP: Company update | Clontarf Energy (CLON.L) – CORP: Interims | Premier African Minerals (PREM.L) – SPECULATIVE BUY*: Issue of equity | Rockwell Diamonds (RDI.TSX) – CORP: Q116 sales and production results | Amino Technologies (AMO.L) – BUY*: Contract win | Keywords Studios (KWS.L) – Interims | Savannah Resources (SAV.L): Oman update
AMO AGQ CLON PREM KWS SAV
22 Sep 15
Shares attractive after highly accretive deal
Amino’s recent interim results highlighted a good first half, with strong performance in North America the key driver of growth in both revenue and EBITDA. On a standalone basis the group is in a strong position going into H2 but the acquisition of Entone for a total consideration of $73.0m is now the main catalyst. We believe the acquisition is a good operational fit and is highly accretive in all forecast years (+33% to FY’16). The combined group is sitting on an attractive multiple of just 13.4x FY’16 PER with an FY’15 yield of 3.4%, despite the recent share price increase. We upgrade our target price to 202p (from 148p) and stick with our Buy recommendation.
17 Aug 15
Interims & acquisition: Transformational deal
The proposed $73m acquisition of Entone and associated £21m fundraising represents a significant step for Amino Technologies. Entone, a provider of broadcast hybrid TV and connected home products, broadens Amino’s product set, substantially expands its North American footprint and consolidates a direct competitor. There is obvious execution risk associated with such a large transaction and the acquisition has emptied Amino’s cash reserves but we would argue that the opportunity outweighs this risk. There is scope for Amino to accelerate its revenue growth but also bring to bear its strong operational efficiency to the Entone business and thereby drive margins. The proposed acquisition is significantly earnings’ accretive in FY16. We maintain our BUY rating and upgrade our price target to 210p on the basis of revised forecasts.
03 Aug 15
Interims, placing and acquisition
Solid interims lead to unchanged full-year expectations prior to the proposed $73m acquisition of Entone. Pre-acquisition 2H expectations merit delivery of 56% of full-year revenue, but strong 1H gross margins mean only 34% of adjusted PBT and EPS are outstanding to pre-acquisition forecasts. Subject to General Meeting approval, the acquisition of Entone (adding complementary technology and consolidating a highly effective competitor), accompanied by £1m of synergies in the first year of ownership, will lift FY16 revenue by 73%, adjusted PBT by 105% and diluted EPS 25%, even after the associated £21m placing at 130p. Subject to the GM approval of the acquisition, we lift our target price to 205p.
22 Jul 15
Synairgen*: AstraZeneca commences AZD9412 Phase II trial in severe asthma (CORP) | The Mission Marketing Group*: Trading update (CORP) | Ideagen*: Prelims (CORP) | Amino Technologies*: Interims, placing and acquisition (CORP) | Staffline: EPS up 45% – strong momentum continues (BUY) | Gemfields*: Initial ruby resource – Montepuez mine (CORP) | Weatherly International*: Q4 operating results (CORP) | Fenner: Trading update (HOLD) | Sound Oil: Initiation of coverage – analyst interview (BUY)
AMO SNG IDEA STAF GEM WTI FENR TMG
22 Jul 15
Strong interims and transformative acquisition
Amino has released a strong set of interim results for the six months to May’15. As flagged at the trading update in June, the return to growth seen in H2’14 has continued into H1’15. The group delivered revenue of £17.9m and EBITDA of £3.9m, y-o-y growth of 9% and 34% respectively. The strong profit performance was driven by a 590 bps increase in the gross margin due to improved product mix. Post the Booxmedia acquisition, net cash balances at the half year were £17.3m. The outlook is positive and we expect continued organic growth in the seasonally stronger second half however today’s results will be overshadowed by the proposed $73.0m acquisition of Entone and associated £21m placing. Entone, a provider of hybrid TV and connected home solutions and direct competitor, looks to be a good strategic fit and significantly enhances Amino’s presence in the crucial North American market. Entone had revenues of $46.7m and EBITDA of $5.1m for the 11 months to May’15 and is expected to be significantly earnings enhancing in the first full year of ownership (FY’16).
21 Jul 15
AMINO TECHNOLOGIES (AMO LN) Strong interims and transformative acquisition | AUGEAN (AUG LN) Strong H1 performance, in line with expectations | CARADOR INCOME FUND PLC (CIFU LN) NAV -0.4% in June, 2.5c dividend declared as expected | CELLO GROUP (CLL LN) On track | CRODA INTERNATIONAL PLC (CRDA LN) Confident interims confirm on track for a return to growth | MOBILE STREAMS (MOS LN) FY’15 profits and cash in-line | RENOLD (RNO LN) Q1 trading a little disappointing | SCAPA GROUP PLC (SCPA LN) Trading in line; Swiss facility to close | VICTREX (VCT LN) Solid performance despite Invibio underperformance, small acquisition
AMO AUG CLL MOS RNO SCPA VCT CRDA CIFU
21 Jul 15
In-line interims, forecasts increased
Amino has announced interim results in line with management’s expectations. Key metrics demonstrated impressive growth, with revenue up 84% YoY and adjusted PBT up 40%, reflecting the firsttime consolidation of Entone and Booxmedia. Cash generation was strong, with a £3.1m closing net cash position. The group reported solid operational progress during the first half and a record order book gives confidence in the outlook for the second half. We make upward revisions to estimates.
12 Jul 15
Positive trading update
Amino has issued a trading update for the six months ending May 2016. Overall, management believe trading was in line with market expectations, with a strong performance from Latin America, solid traction in North America and good momentum in Europe. Amino reported record order intake during the period and a solid £3.1m closing net cash position. Lastly, a 10% increase in the dividend is a further statement of confidence in the outlook.
08 Jun 15
Return to growth continues
Amino has released a positive trading update for the six months to May ’15. The group returned to revenue growth in H2’14 and this positive momentum has continued with Amino expecting to report interim results showing y-o-y growth in both revenue and PBT. We had been expecting a slight decline in H1 with strong growth in H2 delivering full year revenue growth. We do not expect to change our full year revenue or PBT forecasts at this stage of the year but a strong H1 leaves the group well placed to achieve our full year forecasts. Cash generation remains strong, supporting a 3.9% dividend yield. Our 12 month target price remains 148p, Buy.
04 Jun 15
Positive trading update
Amino’s trading update for the first half of 2014/15 contains a number of positive messages. The period saw growth in both turnover and PBT, with strong momentum in both core geographies and new markets. Cash generation was solid, with a £2.3m improvement in the underlying cash position over H1 2013/14. Management anticipates that FY2014/15 results will be in line with market expectations, and has maintained the existing progressive dividend policy with the pre-announcement of a 10% increase in the interim dividend.
04 Jun 15
Booxmedia acquisition: TV Everywhere
Amino has announced the acquisition of Booxmedia, a Finnish provider of end-to-end CloudTV solutions, combining mobile and home viewing. Although small in group terms, the acquisition is strategically sensible in our view, bringing significant incremental capabilities in the fast-growing mobile TV segment. Following the acquisition we leave forecasts unchanged, but believe the deal significantly enhances the outlook for longer-term growth.
20 May 15
Amino has reported FY14 results confirming the positive momentum flagged in the December-14 trading statement. In addition to the welcome return of material revenue growth (H2 +26%), the company reported solid EBITDA margin progression (+1.7pp YoY) and a £1.3m improvement in net cash (now £20.8m or 40p per share). A 45% upward re-basing of the dividend was accompanied by a reiteration of the 10% dividend growth policy. Overall a strong set of results, giving further confidence in the group’s future growth prospects.
02 Feb 15