The £4.2m sale of the Filtronic Telecoms Antenna Operations (FTAO), coupled with ongoing strong demand for 5G back/cross-haul, mmWave development and a revamped operating and management structure across a more efficient footprint, puts Filtronic in a strong financial and market position going forward. Its strengthened balance sheet underwrites plans to strengthen the sales and marketing and engineering capabilities this year. The continuing business will thus be well positioned to capitalise on the growth opportunities in its high-margin markets like 5G backhaul, critical coms, aerospace & defence; the recent design wins to develop cross-haul technology for major players in 5G mmWave and High-Altitude Pseudo-Satellite (HAPS) point the way ahead, although revenue will be seen in FY 2021. Overall, a strong platform for growth is being built here.
Companies: SDI FTC ACC
Companies: EOG PCIP FTC
Filtronic has announced the expected sale of its Telecoms Antenna Operation for an initial cash consideration of $5.5m (c£4.2m) to Microdata. This compares with a valuation in net assets held for sale of £2.8m at 31 May, and the transaction is expected to close on 2 January 2020, with no closing conditions or regulatory approvals required. This marks an important step forward for Filtronic’s investment case as the company can now concentrate its focus and expand its investment in its core growth markets of 5G/X-Haul, public safety comms, and defence & aerospace. We look forward to seeing the progress of the organic business at H1 results in January, and reiterate our 10.5p TP and FY20 forecasts.
Filtronic (FTC): Corp | iomart (IOM): Corp | STM (STM): Corp
Companies: IOM STM FTC
Essentra (ESNT LN, £1.1bn) | AB Dynamics (ABDP LN, £624m) | Versarien (VRS LN, £155m) | Filtronic (FTC LN, £18m) | Pressure Technologies (PRES LN, £17m)
Companies: ESNT ABDP VRS FTC PRES
Filtronic (FTC): Corp CEO leaves with immediate effect | President Energy (PPC): Corp Group update | Xeros (XSG): Corp Saving the world’s water, one XOrb at a time
Companies: PPC FTC XSG
Highlights of the FY May 2019 results were revealed with the warranty claim settlement last week, however details are now released. As we noted previously, the Telecoms Antennas Operations are being sold following disappointment in the Massive MIMO market and is thus treated as a discontinued business in these accounts, making forecasts incomparable. On a LFL basis (FY 2018 restated), ongoing revenue fell 26% to £15.9m; a combination of FY 2018 benefiting from an exceptional one-off sale, and a strategic withdrawal in OEM filters. This delivered adj. EBITDA of £0.7m (2018: £3.7m). Ongoing operations are performing well, with encouraging order intake on 5G backhaul transceivers and a big increase in planned production capacity to meet demand. Strategically, this is a big year ahead; the settlement of the warranty claim should be followed by the sale completion of the Telecoms Antenna Operations. We reiterate our TP and issue FY 2020 forecasts.
Filtronic (FTC): Corp Warranty issue settled and FY 2019 results out
Anglo African Oil & Gas (AAOG): Corp Proposed fundraise | Filtronic (FTC): Corp FY 2019 in line as critical coms opportunities grow
Companies: Anglo African Oil & Gas Filtronic
Filtronic is a global leader in the design and manufacture of a range of customised RF, microwave and millimetre wave components and subsystems, notably antennas, filters and transceivers. These products are mainly used in wireless telecommunication networks and point-to-point communication systems but also in critical coms (the defence, public safety and aerospace sectors). H1 results met internal projections but were overshadowed by the reduced forecast for new Massive MIMO (mMIMO) antennas, likely leaving a small loss in FY 2019. However, FTC has a solid cash base, is well managed, has a leading-edge product range and most importantly has unrivalled expertise and reputation in the global wireless telecoms equipment industry. This industry is forecast to enjoy rapid growth over the next decade on the back of increasing data demand and the development of 5G to cater to high bandwidth requirements of the IoT. Furthermore, the company is increasingly winning business in the defence market, where its market leading expertise offers greater visibility and defensible higher margins.
Alumasc (ALU): Corp Interim results – continued subdued market conditions | ANGLE (AGL): Corp Interims – FDA study 92% recruited | Aukett Swanke (AUK): Corp Final results | Cambridge Cognition (COG): Corp Pharma partnership/new product delivers £0.2m upfront | discoverIE (DSCV): Corp 10% organic growth up from 7% in H1 | eServGlobal (ESG): Corp PayMobile extends service in the Middle East | Filtronic (FTC): Corp Initiation: Critical Coms provide base for 5G upside | Flowtech Fluidpower (FLO): Corp Q4 trading update | Frenkel Topping (FEN): Corp Niche player building good momentum | Morses Club (MCL): Corp Market-leading Morses attracts consolidation prospects | NAHL (NAH): Corp Tick in the box | PPHE Hotel Group (PPH): Corp Significant investment supporting growth | President Energy (PPC): Corp 2018 a transitional year – more to come in 2019
Companies: DSCV ALU AUK COG FLO FEN PPH AGL MCL PPC NAH FTC WJA
Gfinity plc* (GFIN.L, 22.2p/£48.7m) Hashtag United joins Elite Series (02.02.18) | Newmark Security* plc (NWT.L, 1.05p/£4.9m) H1: Progress in Sateon and Workforce Management (30.01.18) | Filtronic plc (FTC.L, 10.1p/£19.8m) Interims: Poor short term revenue visibility mars mid-term growth story (30.01.18)
Companies: GFIN NWT FTC
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.
Wilmcote Holdings plc—Sch1 from the Company established with the objective of creating value for its investors through the acquisition and subsequent development of target businesses in the downstream and specialty chemicals sector. Offer raising £15m at 120p with market cap of £25m. Expected 17 August 2017
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
Companies: DCD EAH GGP GTC FISH AAZ WJG SAV FTC LWRF
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CAP-XX Ltd* (CPX.L, 3.1p/£10.1m) | Gfinity plc* (GFIN.L, 1.675p/£12.0m) | MTI Wireless Edge Ltd* (MWE.L, 38.5p/£33.8m) | Newmark Security plc* (NWT.L, 1.05p/£4.9m) | Mirada plc* (MIRA.L, 95.0p/£8.5m)
Companies: CPX GFIN MWE NWT MIRA
EVR partners with Live Nation for virtual festival
Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.
Companies: OPM ALU ANCR BLV CONN CRC STU GATC HAT LEK MMH MCB MWE NXR NTBR NOG PAF PEG RFX SRC TEF TEG TPT VTU WYN XLM
For the six months to 30 September 2019 (H1 FY20) AdEPT Technology Group reported Revenue +26.4%YoY to £30.8m inclusive of acquisitions, with organic growth of +2.5%YoY. Fixed Line Communications comprised 18.5% (£5.7m), -10.7%YoY, whilst Managed Services grew 39.5%YoY to £25.1m inclusive of the acquisition of Advanced Computer Systems UK Ltd. (ACS) to reach 81.5% of revenue; underlying organic growth was 7.9%YoY. EBITDA (adj.) of £6.1m grew 18.3%YoY; a 19.8% margin. The interim dividend was 5.1p/share (H119: 4.9p) +4%YoY. Period-end senior net debt was £31.5m (FY19: £27.1m) 2.6x EBITDA (FY19: 2.5x), with cash at £4.6m.
Companies: Adept Technology
FY 2019 was, as expected, a strong year for Gamma in financial terms with growth in Adjusted EBITDA of 31% a touch higher than we were expecting. Notably, that was achieved in a period where management has been pursuing its updated strategy which included investing in future growth and spending time assessing and undertaking acquisitions. The Group delivered well on its strategic aims during the year and it has announced further acquisitions in 2020. Gamma retains a strong balance sheet and we expect to see more deals in the future. It saw strong growth in the UK while its Dutch businesses were integrated and DX Groep saw a pick-up in H2. The near term business outlook is somewhat overshadowed by Covid-19 and we exercise a degree of conservatism as we upgrade our estimates to reflect the FY 2019 performance and the recent acquisitions. Nonetheless, the combination of organic and acquired growth produces a 5% upgrade in Adj. EBITDA for the current year which anticipates 15% growth on FY 2019’s strong number.
Companies: Gamma Communications
FY 2019 saw a strong financial and operational performance. The management team is working hard to optimise its sales strategy and pursue further cost reductions. The results of its efforts are already visible in much improved financials: growth in all the ongoing businesses and in all regions; and stronger margins from better revenue mix and streamlining. The sale of Automotive in February 2019 focused Telit on Industrial IoT, removed a heavy R&D burden and left the group very well-funded. Cash is to be partially returned to shareholders depending on the developing Covid-19 situation. Even in an uncertain times, the year leaves Telit very well placed with tremendous upside to build LT value through numerous opportunities as a global leader in the growing IoT market.
Companies: Telit Communications
Accelerated book build, board change and JSOP
Telit has moved to preserve its profit levels during the COVID-19 pandemic. The widespread lockdown of unknown duration is likely to slow some of its YoY revenue growth, and we trim our FY 2020 revenue expectations, although we do still continue to expect LFL growth (excluding the two months of Automotive in FY 2019). Despite its significant cash reserves from the disposal, management is prudently adopting a cost-reduction plan to ensure the company’s earnings are maintained at the targeted level. Notably this involves a temporary 15% salary reduction for senior management and a reduction in all areas of discretionary spending, including opex and capex. Strategic plans (such as long-term product development and the movement of production outside China) will be unaffected. We are pleased to hear the supply chain remains steady with minimal disruption in module production as the lockdown across Asia is partially lifted. At this stage, we leave FY 2021 forecasts unchanged, given a strong market position.
SigmaRoc's shares have fallen 34% in the last two months as the market underestimates the group's financial strength and infrastructure exposure. The group can withstand eight months without revenues, but this is academic as activity across the group is even now enough to generate positive cash flows.
Panoro Energy (PEN NO)C: Initiating coverage | 88 Energy (88E LN/AU): Acquisition in Alaska | BP (BP LN): Transaction in Alaska with Hilcorp renegotiated | Columbus Energy Resources (CERP LN): Oil discovery in Trinidad | Premier Oil (PMO LN) and Rockhopper Exploration (RKH LN): Sea Lion farm out (Falklands) exclusivity period extended | BP (BP LN): 1Q20 results | Equinor (EQNR NO): Dry hole in Norway | Getech (GTC LN): Business update | Hurricane Energy (HUR LN): Business update in the UK North Sea |IGas Energy (IGAS LN): Shutting some production in the UK | Lundin Energy (LUP SS): 1Q20 results | OKEA (OKEA NO): 1Q20 update in Norway | OMV (OMV AG): 1Q results | Premier Oil (PMO LN): Court approves schemes of arrangement | Royal Dutch Shell (RDSA/B LN): 1Q20 results and dividend reduction | RockRose Energy (RRE LN): Operational update in the UK | UK Oil & Gas (UKOG LN): £1.275 mm equity raise | Caspian Sunrise (CASP LN): Operating update in Kazakhstan | Exillon Energy (EXI LN): February and March production in Russia | Nostrum Oil & Gas (NOG LN): 1Q20 update in Kazakhstan | PetroNeft (PTR LN): Operations update | Genel Energy (GENL LN): Update in Kurdistan – While negotiations are ongoing the KRG will not exercise the notice of an intention to terminate the Bina Bawi PSC | ShaMaran Petroleum (SNM CN): Business update in Kurdistan | Tethys Oil (TETY SS): Production reduction in Oman | Total (FP FP): Dry hole in Lebanon | Aminex (AEX LN) and Solo Oil (SOLO LN): Licence extension in Tanzania | Far Limited (FAR AU): Update in Senegal | Lekoil (LEK LN): Final payment with Nigerian partner rescheduled | Orca Exploration (ORC.A/B CN): FY19 results | Savannah Energy (SAVE LN): Financial and operating update in Nigeria | San Leon Energy (SLE LN): Special dividend | Seplat Petroleum (SEPL LN): 1Q20 results
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Quite a good Q4 supported by improving commercial momentum in Europe. The annual EBITDA grew eventually by 2.6% yoy reflecting the cost programme’s success.
The €0.09 dividend is maintained.
Vodafone is more highly indebted after its deal with Liberty-Global, but its dividend (cut last year) seems now more in harmony with its balance sheet. Besides, the monetisation of its infrastructure is continuing. Given therefore the slight growth Vodafone should offer in the coming years, we maintain our Buy recommendation on the stock.
Companies: Vodafone Group
Major new exclusive concert series launched; Buy
NextVR acquired by Apple for speculated US$100m