Hybridan Small Cap Feast - 24 April 24

24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Morning Note – 24 April 2024

Filtronic - LEO liftoff: SpaceX strategic agreement and $20m order

Just 15 months after winning its first order in the Low Earth Orbit (LEO) satellite communications market, Filtronic has announced a 5-year strategic partnership with SpaceX which includes an initial $19.7m (£15.8m) E-band amplifier production order for delivery in FY25. As a result, we upgrade our FY24/FY25 forecasts and lift our target price to 57.4p (was 37.5p), equivalent to 74% upside. Although this is the first time SpaceX’s Starlink has been named as a Filtronic customer, this is now the

Hybridan Small Cap Feast: 2 April 2024

2nd April 2024 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objecti

Filtronic - H1/24 Riding the EM-waves across land, sea and space

Filtronic has reported results in-line with management expectations for H1/24, and now expects to perform ahead of our forecasts for FY24E and FY25E in terms of revenue and profit. We are raising our revenue forecasts for FY24E and FY25E by 14.6% and 6.2% respectively, and our EBITDA forecasts by 85.2% and 28.0% respectively. The increase in expectation is driven by a strong recent acceleration in order flow, including a £7.8m order announced today. In this report we present a detailed review of

Hybridan Small Cap Feast - 06 Feb 24

6th February 2024 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obje

Filtronic - Backlog supports strong growth from H224

Filtronic’s recent investment and focus on high-performance radio frequency (RF) design and manufacturing is starting to pay off, with recent new customer wins, development contracts and volume production orders boosting the order backlog. H124 results do not reflect this recent success: revenue was essentially flat and investment in sales and engineering reduced EBITDA. However, the strong backlog gives management confidence that revenue and profit will exceed consensus estimates for FY24 and F

Morning Note – 6 February 2024

Filtronic - New customer win in defence market

Filtronic has signed a contract with QinetiQ to supply a radio frequency (RF) sub-system for use in an upgraded radar system. This is Filtronic’s first contract with QinetiQ, a target customer in the aerospace and defence sector. Following on from the £4.5m contract signed with a UK prime defence contractor in December, Filtronic is showing good progress in this market. Combined with growing demand from the space sector, we believe the company is successfully diversifying its business on both a

Hybridan Small Cap Feast - 15 Jan 24

15th January 2024 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obje

Morning Note – 15 January 2024

Filtronic - $6.0m win further strengthens space credentials

Filtronic’s strong end to 2023 has continued, with the announcement of a $6m (£4.8m) contract to supply Solid State Power Amplifiers (SSPAs) to a leading supplier of low orbit Earth (LEO) satellite equipment. The contract provides evidence of Filtronic’s capability and growing standing within the space market, in our view. Meanwhile, the company’s £4.5m defence win, announced yesterday, demonstrates continued progress in the business’s traditional defence and telecoms verticals. We are not cha

Morning Note – 20 December 2023

CyanConnode (CYAN LN) - FY24 update: revenue materially ahead

CyanConnode exceeded FY24 revenue expectations and has high visibility into FY25, supported by strong deliveries and a growing backlog respectively.

Hybridan Research: Sector Review: Artificial intelligence in UK cybersecurity: the human uplift 17/04/2024

Artificial intelligence (AI) is a double-edged sword in cybersecurity. Whilst new AI models, architectures, and innovations are emerging to protect the security posture of organisations, attackers are also benefiting from deepfakes, sophisticated phishing, and automation of malicious codes. To ensure the impact of AI on cybersecurity to be a net-positive, we need to pit good AI against bad AI. Point solutions enhanced with machine learning: Global cybersecurity has been built with point soluti

SRT Marine Systems - FY24 update: revenue forecasts pushed out for new June YE

SRT Marine Systems has reported a change of year end from 12-months to March 2024 to 15-months to June 2024, with revenue forecasts extended by three months for both new year ends, and an encouraging operational update. The company is concerned that government related paperwork on two existing CG projects (SEA and ME) may not be completed in time for a March invoice and risks falling into the next quarter. In one jurisdiction where there a number of new project prospects, the company must meet s

Morning Note – 21 December 2023

Calnex Solutions - FY24 trading update – marking time

Calnex has released a pre-close trading update for the year to March 2024, indicating that revenue would be £16.3m, c£0.7m below our forecast, partly due to the timing of orders at the end of the period. Group trading has been impacted by the well-documented, continuing challenges in the Telecoms sector which have seen delayed project timings leading to corresponding delays in customer spending. Administrative costs are being controlled and are focussed on maintaining R&D. Calnex remains confide

BATM+ (BVC, House Stock at 18p) - New client Edgility contract

Thunderclap in British telecoms

FY23 revenues and EBITDA were in line with expectations. The major news was that BT plans to shed more than 40% of staff. At the end of the decade the EBITDA could reach £11bn with the massive restructuring announced and capex could return to €3.5bn per year. EBITDA less capex could be multiplied by 2.5 and therefore also the dividend. This could value BT at 385 pence at that time. We maintain our opinion at Add on the stock.

A fairly safe long term buy and hold

A decent Q1 performance despite the expected headwinds from cost-of-living pressure and cost inflation. The group is clearly a fairly safe long-term buy and hold. BT plans to shed more than 40% of staff by the end of the decade. In parallel it is further accelerating its FTTP deployment with high capex. But at the end of this phase EBITDA-capex could be multiplied by 2.5. Speculation could also again reignite as Drahi’s empire (owning 24.5% of BT) is being shaken by corruption cases.

Increasingly aggressive on the TV side

Q4 revenues were only up by 1.3% yoy (excluding the inclusion of EE for two months). A better performance than might be thought at first sight given the 8% decline recorded by the wholesale division (due to the benefit of ladder pricing revenue recognised last year). BT’s Fixed consumer revenues, 25% of BT’s business (excluding EE and Openreach) corresponding to BT’s own retail business, were up by 8% yoy with a 20% increase in broadband and TV revenue. Openreach revenue (28% of BT’s revenue not

Q1 in line with expectations

Q1 16 revenues declined by 2.6% yoy (excluding the contact centre business SNT Deutschland which was sold in Q1). Once again growing Consumer revenues were offset by the impact of the ongoing decline in size of the business market and lower revenues at iBasis. The EBITDA decreased by 4.5% yoy but this is due to temporarily higher IT-related costs in network and operations in the run-up to IT rationalisation. Note also an impairment charge related to iBasis for €45m. KPN intends to pay a regul

A mixed release

Q4 2015 revenues declined by 5.9% yoy (adjusted with a tax settlement benefit of €44m in Q4 2014). Growing Consumer revenues were offset by the impact of the ongoing decline of the business market size and lower revenues at iBasis. The EBITDA decreased however by only 0.7% yoy in Q4 2015 (without the tax settlement benefit in Q4 2014). These results are quite disappointing compared to the previous Q3 where revenues were down by only 2.6% yoy (vs -3.5% in H1) thanks to 3.7% growth on the co

A good newsflow

Q3 revenues and EBITDA were up by 3% yoy. Quite a good set of results for the new telco king of England (following the completion of EE’s acquisition). BT Fixed consumer revenues (25% of BT’s business not including Openreach sales corresponding to BT’s own retail business) were up by 11% yoy with a 23% increase in broadband and TV revenue. Openreach revenue (28% of BT’s revenue not including EE) was up by 3% yoy with record net fibre broadband additions of 494k, 32% higher than last year. There

Consolidating its market shares on the consumer side

Although Q1 revenues had decreased by 2.6% yoy while the EBITDA had declined slightly more by 4.5%, it was the opposite in Q2 with revenues down more than expected by 4.3% yoy but a better EBITDA down by only 1.7%. Once again, growing Consumer revenues were offset by the impact of the ongoing decline in the size of the business market. So, as in the two previous quarters, a mixed release.

Q1 in line but pressures are mounting for a separation of Openreach

BT group has released its Q1 numbers. But note, in parallel, another key point: two days ago Ofcom announced a half-step towards a separation between BT and Openreach (BT’s division which operates the fibre network). Q1 revenues were only up by 0.4% yoy (excluding EE). Like in the previous quarter, it is a better performance than might be thought at first sight given the 6% decline recorded by the wholesale division (due to the benefit of ladder pricing revenue recognised last year). BT’s Fixed

Rationalisation of the network is paying off

Quite a good Q3 for KPN: even if revenues, down by 3% yoy, are still suffering from the decline in the business market size (consumer revenues grew by 1.5% yoy), the EBITDA was good (growing by 3.4% yoy as it was down by 4.5% in Q1 and by 1.7% in Q2) driven by customer base growth and the positive impact of cost savings.