Kore Potash— advanced stage mineral exploration and development company whose primary asset is its interest in the Sintoukola Project, a potash project located in the Republic of Congo. ) Measured, Indicated and Inferred Mineral Resource of 5,953Mt at an average grade of 22.0% KCl. Offer TBA. Due end March.
Perfomatrix PLC, a global end to end Performance Marketing technology and services company headquartered in the UK, is looking to join AIM in early April 2018, offer TBC
Crusader Resources, an ASX-listed public company incorporated in Australia, which is primarily focused on the exploration and development of gold assets in Brazil. Offer TBC, expected late March.
SimplyBiz, a Financial Services Firm, looking to join AIM raising £30m via placing and £34.6m via a sale of existing ordinary shares at 170p giving a market cap of £130m. Expected 4 April
Bacanora Lithium—Readmission. No new money. Mkt cap £140m. Due 26 March. the new holding company for Bacanora Minerals Ltd
Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area. Vendor placing and new funds to a total of €225m, Target gross proceeds €207m. Expected Mid March
Polarean - Medical drug-device combination company operating in the high resolution medical imaging market. Offer TBC. Due 26 March
Companies: FLYB COG HUW EZH XSG CITY REDX LTHM FRR TPG
Avesoro Resources (ASO): Corp High grade intersections from infill drilling at New Liberty | Cambridge Cognition (COG): Corp FY results – R&D will drive value | Cello (CLL): Corp Core global brand leveraging digital expertise into health | CityFibre (CITY): Corp Third FTTH City - Peterborough | Quixant (QXT): Corp Place your bet on this ecosystem | Sopheon (SPE): Corp Strong momentum continues | Utilitywise (UTW): Corp Focus on the cash flow
Companies: ASO COG CLL CITY QXT SPE UTW
Castleton Technology (CTP): Corp Evergreen options removed | CityFibre (CITY): Corp Second FTTH city | Gooch & Housego (GHH): Corp AGM trading update | Independent Oil & Gas (IOG): Corp Friends with benefits | Inspiration Healthcare (IHC): Buy Trading update
Companies: CTP CITY GHH IOG
CityFibre (CITY): Corp Well ahead in the land grab | Lighthouse Group (LGT): Corp Middle Britain drives accelerating growth | Lok'nStore (LOK): Corp New site secured and financing strengthened | Tristel (TSTL): Corp Interims – small upgrade for 2019
Companies: CITY LGT LOK TSTL
STM* (STM): Reasonableness returns (CORP) | CityFibre* (CITY): Milton Keynes FTTP roll out (CORP)
Companies: STM Group Cityfibre Infrastructure
The fibre optic infrastructure provider for UK towns and second-tier cities has signed its largest ever deal.
Companies: Cityfibre Infrastructure
CIP Merchant Capital—Closed ended investment Company. Sector focus oil & gas, healthcare, pharma, and real estate. Raising £55m. Due late Dec | 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 late Dec. | 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.
Companies: ICON LEG MRL CITY TRT DCTA WHR ARIX MOGP URA
Immupharma (IMM): Last patient completes dosing on Lupuzor (BUY) | Independent Oil & Gas* (IOG): Skipper creditor resolution (CORP) | CityFibre* (CITY): Major contract win (CORP)
Companies: IMM IOG CITY
Iofina* (IOF): H2 production set to exceed guidance & IO#7 update (CORP) | Omega Diagnostics* (ODX): Short-term headwinds (CORP) | Byotrol* (BYOT): Interims – H2 weighted with deal flow (CORP) | Synairgen* (SNG): £5m payment from Pharmaxis (CORP) | Keywords Studios (KWS): Doubling up (BUY) | Altitude Group* (ALT): Taking AiM (CORP) | CityFibre* (CITY): Further demonstration of the model – Aberdeen (CORP)
Companies: IOF ODX BYOT SNG KWS ALT CITY
BCA Marketplace and stevia sweeteners developer Purecircle are the latest former AIM companies to be moving into the FTSE 250 index. The changes take place on 18 December and will take the number of former AIM companies in the FTSE 250 to 20 – although Booker and Paysafe are being taken over.
Companies: CITY TRAK bmn BXP TRCS SND
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Clean Invest Africa—Introduction due around 14 Nov. Vehicle established to identify investment opportunities and acquisitions in renewable and clean energy projects/companies or alternative technologies that are used in a socially and environmentally responsible way that will aid the development of the African continent. | City Pub Group - owner and operator of an estate of 34 premium pubs across Southern England. £30m raise. Consistent track record of strong revenue and EBITDA growth, with a three year CAGR from FY14 to FY16 of 34.9% and 44.8% respectively, and an EBITDA margin of 14.7% in FY16. Due Nov. | Boku - Independent direct carrier billing company. Revenues were up 21% to US$10.2 in HYJun17. Q32017, revenues grew to $6.5m, up by 44%. The Company also saw continued growth across all of its key metrics: user numbers, total payment and a positive adjusted EBITDA for the month of September 2017. Due 20 Nov. Offer TBA. | Ten Lifestyle Hldgs. Technology-enabled lifestyle and travel platform providing trusted concierge services to the world's wealthy. Net revenue increased from £20m in the year ended 31 August 2015 to £33m in the year ended 31 August 2017, a compound annual growth rate of 29%. Offer and date TBA. | 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. | OG Graphite, brownfield development-stage graphite company focused on the reactivation of its wholly-owned Kearney natural flake graphite mine and mill located 280 km north of Toronto, Canada. Offer TBA, expected mid November. | Shefa Yamin minerals company focused on the exploration for precious stones in Northern Israel. Net Proceeds will be used to advance the Company's mining project. Offer TBA. | Aviva Investors Secure Income REIT - Targeting £200m raise. Will invest in a diversified portfolio of high quality, long-lease commercial real estate assets located within the UK and leased to predominantly investment grade tenants. Due Dec. | Cabot Credit Management -one of the largest credit management services providers in Europe and the market leader in the UK and Ireland with total 120-Month ERC of £2.2bn. Raising c.£195m. Offer TBA. Due November. | M7 Multi-Let REIT—Intends to raise up to £300m at 100p. Aims to acquire and hold a portfolio of UK regional light industrial and regional office assets diversified by geography, asset type and tenants that is expected to generate stable income returns and, where appropriate, offer the potential to leverage and enhance returns through active asset management initiatives. Due 30 Nov. | En+, international vertically integrated aluminium and power producer with core assets located in Russia. Priced at $14 per GDR.
$1.5bn offer of which $0.5bn primary to pay down debt. Dual listing in Moscow. Unconditional dealings 8 Nov. | TMF Group, which provides tax, admin and legal support services, reported to be seeking London IPO to raise c. £200m.
Companies: AURA ITM ONC SPE CITY GRL BAR HSM RTHM ROSE
CityFibre has announced a long-term strategic partnership with Vodafone which will provide the foundation to deliver full fibre connectivity to 20% of UK households. The minimum 10-year agreement will see initial deployment to 1 million homes by 2021, worth £500m over the first 20 years of the network life, with the right to extend to 5 million homes (20% of the UK) by 2025. Vodafone has made a minimum guaranteed spend commitment, in exchange for initial exclusivity, having demonstrated a willingness to lead fibre markets in Ireland and Germany thus far, and now too in the UK. After the exclusive access period, it will be incumbent on any major UK service provider to have a partnership with CityFibre to gain access to the only independent pure fibre network in 50 cities across the UK. This is the execution of a consistent and very clear strategic direction, which will now deliver to a grateful UK starved of appropriate bandwidth.
CityFibre* (CITY): The dawn of a new UK (CORP) | Blancco Technology Group* (BLTG): Please sir, I want some more (SELL)
Companies: Cityfibre Infrastructure Blancco Technology Group
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.
Companies: 7DIG ALT AMO 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 SYME WJA
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Gamma is acquiring around 80% of HFO Holding AG (HFO), one of the leading SIP Trunk providers in Germany, for an initial consideration of €20.4m in cash with an option to purchase the remaining shares over the next three years. In line with its stated strategy, Gamma can invest and use its commercial strength and expertise to accelerate HFO’s growth and replicate the Group’s success in the UK by developing a market leading position in Germany. Noting net debt of €2.9m when the deal closed, the implied historical EV/EBITDA multiple of about 10x compares with Gamma’s equivalent of 18.7x. We estimate that the deal will be 4% earnings enhancing in the first full year of ownership and our estimate upgrades reflect that. The European markets for cloud telephony in which Gamma is now represented will ultimately overtake the UK in size, providing Gamma with significant future growth potential. We view this acquisition as another significant step in Gamma’s strategic aim to expand into Europe via exposure to another lucrative market opportunity.
Companies: Gamma Communications
The Coronavirus pandemic is a human tragedy of vast proportions – as well as the terrible human toll, COVID-19 has led to economies across the globe going into physical lockdown and financial freefall. Entire populations are adapting to the “stay at home” edict, to safeguard the vulnerable – and some of these changes will lead to long-lasting or perhaps permanent changes in the way we live or work. This note describes some of our client companies whose business models are well adapted to these changes, or who might see a change in long-term structural demand.
Companies: AMO BGO FDM GAMA KAPE LOOP TERN ZOO
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
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
Gamma’s AGM statement contains a sensible degree of caution around the impact of COVID-19 on the economic backdrop, mixed with its continuing growth story. The group is seeing strong demand for Cloud PBX and UCaaS (Unified Communications as a Service) products in the UK but notes some slowdown in new orders and a lengthening of sales cycles. The business model has successfully moved to home working and, with a high (93%) proportion of recurring revenue, the outlook remains bright. We take a prudent view in reducing our revenue estimates although the impact on EBITDA is more muted. The Group has a strong balance sheet, is cash generative and retains its previously announced dividend payment.
Oil posted the biggest weekly plunge since 2008, capping its most dramatic week in recent memory as major producers prepare to drench the market with supply just as the coronavirus crushes demand. But prices jumped following the close, after President Donald Trump said the U.S. would fill the nation's strategic reserve. Losses for the week totalled 23% after the collapse of talks between members of the OPEC+ group triggered the biggest crash in a generation. Instead of reaching a deal to cut output to mitigate the fallout from the virus, producers led by Saudi Arabia and Russia embarked on a war for market share and pledged to pump more.
Companies: TGL TXP VLU EGY GTE CNE DGOC ENQ SQZ UKOG TRIN TLW PHAR
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.
Companies: Telit Communications
Pebble Beach Systems is a leading developer and provider of playout automation and IP-based solutions to over 150 customers across the global broadcast industry. Its portfolio of proprietary software solutions is central to the playout of uninterrupted broadcast, for both live and pre-recorded content, and importantly enables broadcasters to automate and streamline multi-channel playout. Via its cloud-based solutions, the company also supports broadcasters and operators as they transition from traditional hardware-based infrastructure to IP-based systems, for a more flexible playout environment. As the industry enters a pivotal decade for the transition to IP, Pebble Beach Systems is well positioned to benefit from the increased traction across the market. FY19 results show adjusted PBT growth of 89%, EBITDA growth (LFL, pre IFRS16) of 47% and revenue growth of 22%, with net debt continuing its descent, now down to £8.4m (FY18: £9.4m). While COVID-19 introduces uncertainty over growth, and we do not yet offer forecasts, the group’s existing customer base is benefiting from Pebble Beach’s automation and remote support as end-user demand for TV booms. We look forward to the post crisis environment to establish forecasts and map the continuation of the evident momentum demonstrated in FY19.
Companies: Pebble Beach Systems Group
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
Companies: 88E AEX PEN BP/ CASP CERP EQNR EXI FAR TTA HUR GENL GTC IGAS LEK LUPE NOG OKEA OMV ORC.B PMO PTR RKH RDSA RRE SAVE SLE SEPL SNM TETY SOLO UKOG
The Board has finally decided to suspend its final dividend for 2019/20 and all dividends for 2020/21. This move is structural and not really linked to the Covid19 crisis in that it is to invest in FTTP and 5G, and to fund a major new 5-year modernisation programme.
These announcements are a first buy signal although the recovery will take time and the group must now stabilize its revenues which will not be easy given the Covid19 pandemic context.
Companies: BT Group
Wentworth Resources (WEN LN)c; £0.40 Price Target: Initiation of coverage - Wentworth Resources is one of the very few small cap E&P names whose profile should be appealing to ESG focused investors. Wentworth is solely focused on producing natural gas, the cleanest fossil fuel (and the preferred transition fuel to renewable energy). Gas is used instead of coal to support the rapidly growing electricity demand in Tanzania where Wentworth is one of only two established gas producers. The company is headed by Katherine Roe, one of the few female CEOs in the sector. With gas sold at a fixed price, the business is profitable irrespective of the oil price. Wentworth is member of a very small group of E&P juniors that offers a dividend yield (almost 8% for 2020, one of the highest in the sector). The dividend distribution could grow. FY20 WI production is estimated at ~21 mmcf/d. With ~150 bcf of WI 2P reserves and 230 bcf of WI 3P reserves, production is expected to grow by ~50-100% as power capacity is added. While the production plateau is very long, the shares trade at EV/DACF multiples of only 2.0x in 2020 and 1.0x in 2021. The current share price is 45% below our Core NAV (NPV15% on the 2P reserves). Maintaining 27 mmcf/d WI production until licence expiry recovers the 1P reserves and requires hardly any capex. The shares are worth £0.26-0.33 under these assumptions (NPV10%-NPV15%). (1) Adding a compressor should boost WI production to 35 mmcf/d in 2024 and adds £0.06-0.08 per share. (2) Extending the licence duration beyond 2031 would allow the drilling of a sixth well to increase WI production to 42 mmcf/d, convert 80 bcf of possible reserves into the 2P category and boost our valuation to £0.64 per share (~3.8x current levels). (iii) Wentworth estimates 0.6 tcf of WI prospective resources on the licences. At US$1/boe, this has an additional unrisked value of £0.40 per share. Our target price of £0.40 per share represents >2x the current share price.
Diversified Gas & Oil (DGOC LN): Borrowing base update | Jadestone Energy (JSE LN): Acquisition in Indonesia and arbitration in Vietnam | Premier Oil (PMO LN): Not acquiring the additional 25% WI in Tolmount | Reabold Resources (RBD LN)/ADX Energy (ADX AU): Well test results in Romania | Royal Dutch Shell (RDSA/B LN): 2Q20 update | UK Oil & Gas (UKOG LN): Planning consent rejected in the UK | PetroNeft Resources (PTR LN): Update in Russia | Energean (ENOG LN): Update on acquisition of Edison E&P | Sound Energy (SOU LN)C: LNG head of terms in Morocco | Solo Oil (SOLO LN): US$5 mm Equity facility
Companies: PMO RDSA RDSB WRL UKOG