Avacta (AVCT): Corp | Belvoir Group (BLV): Corp | Byotrol (BYOT): Corp | Chariot Oil & Gas (CHAR): Corp | Destiny Pharma (DEST): Corp | Omega Diagnostics (ODX): Corp | SRT Marine Systems (SRT): Corp | Telit (TCM): Corp
Companies: AVCT BYOT CHAR ODX SRT DEST TCM BLV
Avacta (AVCT): Corp | City of London Group (CIN): Corp | Robinson (RBN): Corp | Telit (TCM): Corp
Companies: AVCT RBN TCM CIN
The actual Interims are slightly improved on July’s update with $166.9m revenue and $56.2m net cash ($166.5m and $55.7m previously indicated) demonstrating a robust trading period despite the impact of pandemic restrictions and uncertainty. The COVID-19 global slowdown caused a 7.4% YoY revenue decline, but an improving gross margin and management’s temporary cost controls have seen adj. EBITDA rise 12% to $18.0m. The company’s ‘Profit in Cash’ metric (adj. EBITDA less capitalised R&D and lease payments) jumped 126% to $5.9m. In fact, cashflow has been very healthy with net cash rising from $48.2m in December to $56.2m, notably boosted by collections from the divested automotive business. One pleasing aspect of the first half was continued growth in higher-margin IoT Services, up 12% YoY despite COVID-19. Easing of restrictions in H2 should see a return to more usual revenue and profit levels, so FY 2020 sales and adj. EBITDA expectations remain unchanged. Looking ahead, a return to revenue growth and continued improvement in profit is anticipated for FY 2021, due to pent-up demand and greater IoT adoption on concerns over potential physical restrictions during future pandemics. Telit remains well positioned to continue to deliver its impressive track record for earnings growth (we expect 9% adj. EBITDA growth this year and then 20% next). Currently on an EV/EBITDA multiple of c.5x, the shares remain deeply undervalued for a stock delivering consistent profits progress with a very solid balance sheet in these very uncertain times.
Companies: Telit Communications S.p.A.
Allergy Therapeutics (AGY): Corp Regulatory update – Phase III birch allergy trial | Elixirr (ELIX): Corp Thriving on change | Telit (TCM): Corp Earnings well protected during COVID slowdown | Tracsis (TRCS): Corp Worst case avoided
Companies: AGY TRCS TCM ELIX
This is a positive trading update for a period impacted by the pandemic restrictions and uncertainty. The COVID-related global slowdown caused an 8% LFL YoY revenue decline to $166.5m in H1, but an improving gross margin and management’s temporary cost controls have protected earnings sufficiently to be ahead of H1 LY (adj. EBITDA of $16.0m). ‘Profit in cash’ (adj. EBITDA less capex and lease payments) is also ahead of the $2.6m seen LY. In fact, cashflow has been very healthy, net cash rising from $48.2m to $55.7m in the period, notably boosted by collections from the divested automotive business. A pleasing aspect of H1 is the continuing growth in higher-margin IoT services, up 12% YoY despite COVID. Easing of restrictions in H2 should see a return to more usual revenue and profit levels, and our FY 2020 earnings growth expectations remain unchanged despite revenue falling YoY – thanks to the cost savings management implemented. Looking further out to next year, a return to revenue growth and continued profit improvement is anticipated for FY 2021, due to pent-up demand and greater IoT adoption on concerns over physical restrictions in future pandemics. At the interim stage, Telit is well positioned to continue to deliver its impressive track record for earnings growth (we expect 9% adj. EBITDA growth this year and 19% next). Currently on an EV/EBITDA multiple of just 3.3x, the shares are deeply undervalued for a stock delivering such consistent profit progress with a very solid balance sheet in these uncertain times.
Avacta (AVTG.L): Corp | Europa Oil & Gas (EOG): Corp | Omega Diagnostics (ODX): Corp | Redcentric (RCN): Corp | Telit (TCM): Corp
Companies: AVCT EOG ODX RCN TCM
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.
Bango (BGO): Corp | Best of the Best (BOTB): Corp | Cambridge Cognition (COG): Corp | PCI Pal (PCIP): Corp | Shoe Zone (SHOE): Corp | Telit (TCM): Corp | Xeros (XSG): Corp
Companies: BOTB COG SHOE TCM PCIP BGO XSG
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.
LiDCO (LID): Corp Increased sales in China due to COVID-19 | Telit (TCM): Corp Resisting the virus and returning the cash
D4T4 Solutions (D4T4): Corp Management confidence in the H2 pipeline is validated | Flowtech Fluidpower (FLO): Corp Year-end trading update: weaker Q4 trading | Gateley (GTLY): Corp High ROCE; strong cash flow while investing for growth | Telit (TCM): Corp FY 2019 beats forecasts and points to a bright future
Companies: D4T4 FLO TCM GTLY
Indian ride-sharing firm Ola says it has started registering drivers in London as it prepares to launch in the U.K. capital. The company, which is backed by Uber investor SoftBank, said it would look to launch its services in the city "In the coming weeks." The announcement comes just a day after Uber was stripped of its London license by the local transport regulator. London is Uber's largest European market, where it counts 45,000 drivers and 3.5 million passengers.
Companies: TRAK SEE TCM TRCS QTX
Uber was stripped of its license to operate in London on Monday by the city’s transport regulator, which cited a “pattern of failures” that “placed passenger safety and security at risk.” TfL had first suspended Uber's license back in 2017, flagging concerns with the company's approach to safety. In its announcement, London's transport authority said it held issue with a change made to Uber's identification systems that allowed unauthorized drivers to upload their photos to other Uber driver accounts. This was a big event in mobility. We expect more pushback as themes of sustainability and consumer protection overtake convenience.
Big Tech is working on some form of smart glasses or headset that will change how we view the world around us. If glasses replace common gadgets like our phones or computer screens, it will mean big business to the company that comes out on top. We agree – we are enthused by the take-up of AR/VR over the long-term.
Companies: MVR TEK IMMO TERN TRAK CPX SEE TCM TRCS QTX
Kingswood Holdings (KWG): Corp Huge ambition with resources available to execute | Telit (TCM): Corp YTD trading on track for FY expectations
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Gamma’s trading update for its financial year to the end of December 2020 reflects another strong year for the Group and we adjust our FY 2020E numbers upwards by 2-3% to reflect guidance of an above-consensus outturn for adjusted EBITDA and EPS numbers. Following the sale of Gamma’s Manchester-based fibre business, the period-end cash balance of £54.1m was higher than expected and a touch up over the year - despite the Group spending £48m on acquisitions in the period. Gamma’s European business is now firmly established in Germany, Spain and the Netherlands while the Group retains a strong balance sheet position. The business continues to display resilience in the current operating environment as cancellations and bad debts remain at low levels, and it retains a range of growth opportunities in both the UK and European unified communications (UCaaS) markets.
Companies: Gamma Communications PLC
MTI Wireless Edge Ltd | CAP-XX Ltd
Companies: MTI Wireless Edge Ltd
Calnex Solutions has announced very strong maiden interim results, with H1/21 revenue up 37% to £7.7m and adjusted PBT up 90% to £2.3m. Calnex has firmly established a trusted reputation worldwide, launching multiple first to market telecoms and network testing solutions. The exponential growth of data creation and secular migration of industries to cloud computing along with the long-term transition of the telecoms industry to 5G is driving demand for high value test instrumentation. Given the strength of H1/21 reported today we have upgraded our revenue forecasts for FY21E and FY22E by 10.6% and 12.2% to £15.4m and £16.4m and increased forecast EPS up 24.1%. and 14.3% respectively. Calnex is accelerating its growth investment plans, ahead of our previous expectations, expanding both R&D and sales capacity to capture increased market share within a substantial and growing global market.
Companies: Calnex Solutions Plc
Calnex Solutions is a leading provider of test and measurement hardware and software solutions that enable performance validation and standards conformance of critical infrastructure associated with telecoms and high-speed data networks. 5G network evolution is a significant, long-term driver of growth for the business along with the continued expansion of hyperscale datacentre enterprises and their increasing participation in telecoms infrastructure markets. Calnex has established a trusted reputation worldwide, launching multiple first to market testing solutions. We have initiated coverage with very conservative forecasts given the strong financial track record with historical revenue CAGR of over 27.7% between FY18 and FY20. Calnex is profitable, cash generative and entered FY21E with a record order backlog.
Telefonica announced this morning that its subsidiary Telxius has signed an agreement with American Tower for the sale of its towers division in Europe for €7.7bn.
It’s indeed an impressive price and TEF succumbed logically to the sirens of American Tower to reduce its debt a little more.
We maintain our opinion at Buy on the stock.
Companies: Telefonica SA
The Interims are as announced in the October update; H1 2021 was better than expected considering the lockdown and leaves SRT well positioned to benefit from meeting Systems delivery milestones, receiving major cash payments and signing new contracts in H2. As last year, H1 revenues are just from Transceivers, with no Systems milestones booked in the period. Last year, that was a quirk of timing in project deliveries, but this year Systems deployments were paused due to the pandemic. Despite global lockdowns, the Transceiver business is growing impressively on the back of new products and channels. Meanwhile, Systems recommenced delivery of the Philippines BFAR system and awaits news on three major contracts in the Middle East, expected to be signed and started this H2. Importantly, the group cash position is strong; £8.5m of Systems payments and the £5.3m April refinancing left gross cash of £5.0m at September; vital for working capital to deliver the Philippines project, which continues to make solid progress. Otherwise, investors await the anticipated new Systems contracts currently in negotiation. The fundamental demand drivers for Maritime Domain Awareness (MDA) systems remain undiminished and the validated sales pipeline remains firm at 17 new contract opportunities totalling £550m.
Companies: SRT Marine Systems plc
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.
Companies: AMO IDEA MAI PHD TRMR
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: TIME 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
Disney+ hits 22m mobile users, SoftBank backed firm downsizes IPO, German mobile carrier selects Huawei
Companies: ENET 7DIG MVR ZOO AMO BOOM MIRA MWE
UK to decide Huawei's 5G role, N26 adds 250k US users, GM to invest $2.2bn for EV
Companies: Trakm8 Holdings PLC
Reaffirms FY trading on track; appt of Sales Director
Trading statement for FY20
FY20 results: inline with guidance
Pebble Beach Systems has reported interims to June 2020, reflective of the global challenges posed by COVID-19. Revenue declined 20% to £4.5m (1H19: £5.6m) as prospective customers cautiously delayed large-scale broadcast infrastructure projects in the immediate term. This masked robust performance in SLA contract renewals, increasing to 42% of group revenue from 31% YoY (£1.9m; 1H19: £1.9m), delivering a greater proportion of recurring business during the period. Whilst cognisant of the potential impacts of COVID in H2, the board remains focused on maintaining its market-leading position through ongoing innovation, and optimising the business through leveraging cost efficiencies and de-gearing the debt balance. The group enters H2 with a strong order backlog (£4.1m) and a growing pipeline, underpinned by recurring SLA renewals, leaving the board confident on the outlook for FY20.
Companies: Pebble Beach Systems Group PLC