Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine ("South Crofty"), 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.
Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Offer TBC, expected late May.
Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May
Team17 Group -video games label and creative partner for independent developers. Since 2014, delivered a revenue CAGR of 69% (31 December 2015 to 31 December 2017), with revenues of £29.6m and Adjusted EBITDA of £12.9m. Offer TBA
Serinus Energy -international upstream oil and gas exploration and production company. Its principal assets are located in Romania (development phase) and Tunisia (production phase). Raising c.£10m at 15p. Due 18 May. Mkt cap £32.6m
Companies: NYR FO SYM TPOP VLS TENG CAKE DNL MYX
Fundamentum Supported Housing REIT. Raising £150m. Focussed on UK Social Housing assets. Due 2 May
Vivo Energy—retailer and marketer of Shell-branded fuels and lubricants in Africa, Due in May. 100% secondary sell-down of existing Shares by Selling Shareholders, No new Money. Pricing TBA
Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects. Due 12 April.
Odyssean Investment Trust—Raising £100m at £1. Due 1 May. The Company will primarily invest in smaller company equities quoted on markets operated by the London Stock Exchange.
Companies: IPX TPOP FLOW PHE GDR CYAN D4T4 TMG TCN FPM
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.
TruFin—holding company of an operating group comprising three growth-focused FinTech and banking businesses operating in three niche lending markets: supply chain finance, invoice finance and dynamic discounting. Offer raising £70m at 190p with
market cap of £185m, expected 21 Feb
Polarean - The medical drug-device combination companies operating in the high resolution medical imaging market. Offer TBC. Due 22 Feb
Block Energy—a NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC
Companies: ORPH CPT ORR SCLP SDM LID TPOP EPO IDP TENG
Panthera Resources— The Company was established to act as a holding company for Indo Gold Limited, an unlisted Australian registered company. The Company aims to explore and develop gold assets in India and West Africa. Offer TBC, expected 20 Dec 2017
Sumo Group—one of the UK's largest independent developers of AAA-rated video games providing both turnkey and codevelopment solutions, including initial concept and pre-production . Offer TBC. Due late Dec
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
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
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 19 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.
Companies: TMT MTR TPOP BMK ELCO BAGR AVO IMO AFN VDTK
See what's trending this week...
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
Savannah Resources (SAV): Drilling results – Mina do Barroso lithium project (BUY) | Cello (CLL): Platform for growth in large and growing markets (BUY) | 600 Group* (SIXH): AGM statement, small placing (CORP) | The People’s Operator* (TPOP): Interims (CORP)
Companies: SAV CLL SIXH TPOP
Xpediator Plc—Sch 1 from the holding Company for an integrated freight management business operating in the supply chain logistics and fulfilment sector across the UK and Europe with a strong presence in Central and Eastern Europe. Offer details TBC, expected Admission early August 2017. | GetBusy PLC—Sch1 from the holding Company of its subsidiary undertakings, which operates as a document management software business with over 110 full time employees, headquartered in Cambridge, UK and operating across the UK, USA, Australia and New Zealand. Capital to be raised via a rights issues of £3m at 28.3p with anticipated market cap of £13.7m. | Work Group PLC—Sch1 from the Company that proposes to acquire the entire issued share capital of Gordon Dadds Group Limited (GDG). GDG is an acquisitive law firm and a group of other complimentary businesses, including Prolegal, an acquisition vehicle model focused on smaller law firm. Capital to be raised is £20m with anticipated market cap of £40m. | Quiz—Sch 1 from the omni-channel and international own brand in the women's value fast fashion sector. Offer TBA. Expected late July. Last year Quiz posted sales of £87.4m while pre-tax profits grew by 17pc to £5.7m . | Arena Events Group -provider of temporary physical structures, seating, ice rinks, furniture and interiors. Raising £60m. Mkt cap £63m. Expected on the Chef’s birthday, 25th July. | Altus Strategies—African focused natural resource Company. Offer TBC. Expected Mid July. | Harvey Nash Group— Provider of professional recruitment and offshore solutions moving to AIM from Main. No capital to be raised. Mkt Cap c. £57.8m. | Greencoat Renewables - Schedule 1. Targeting a portfolio of operating renewable electricity generation assets, initially investing in wind generation assets in Ireland. Offer TBC. Due Mid July. | I3 Energy –Schedule 1 Update. Independent oil and gas Company with assets and operations in the UK. Issue price of 55p with anticipated market cap of £14.3m, 25 July Admission. | Verditek— Sch 1 update. The Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June.| Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Prospectus yet to be published. | Impact Investment Trust—Exposure to a diversified portfolio of funds providing SMEs across developing economies with the growth capital they need to have a positive impact on the lives of the world's poorer populations. Raising up to $150m at $1.00. | 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. | Kuwait Energy— has not been able to complete its initial public offering as announced in its Intention To Float of 3 May 2017. However, in light of positive feedback from potential investors, the Company remains committed to obtaining a London listing and continues to explore its options. | Supermarket Income REIT– Up to £200m raise to acquire a diversified portfolio of supermarket real estate assets in the UK, providing long-term RPI-linked income. Due 21 July.
Companies: HZD HOTC TILS DPP TPOP TOU VLG RENE
Tristel* (TSTL): Trading update drives upgrades (CORP) | Cello (CLL): On track and investing for growth (BUY) | The People’s Operator* (TPOP): Board changes (CORP) | Tax Systems* (TAX): Trading update: on track (CORP)
Companies: TSTL CLL TPOP TAX
finnCap reduced its TP to 20p, saying it looked forward to progress and further cost control, expecting profitability in the H218
Companies: The People's Operator
The People’s Operator* (TPOP): Prelims (CORP) | Frontier Developments* (FDEV): FY trading update and release of forecasts (CORP) | Firestone Diamonds (FDI): Operations and financial update (BUY)
Companies: TPOP FDEV FDI
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.
Companies: 7DIG AMO 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 SYME WJA
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*.
Companies: 7DIG AMO 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 SYME WJA
Interims have delivered LBITDA of £3.8m from revenue of £1.7m, and net cash of £3.1m. A strategic drive towards proactive churn to ensure significant improvement in the quality of the customer base, alongside a drive to cost cutting which management expect will reduce the monthly burn rate to £115k by January, is forecast to result in materially unchanged FY LBITDA expectations from revised revenue forecasts. With a debt facility established and funding commitment from key shareholders, TPO's US growth aspirations have the opportunity to deliver the path to profit and positive cash flow. Target 50p (60p).
Premaitha Health* (NIPT): FY 2016 results (CORP) | Zambeef* (ZAM): Positive year-end trading update (CORP) | Iofina* (IOF): Continuing to deliver on production targets (CORP) | Independent Oil & Gas* (IOG): Interim results and Skipper update (CORP) | The People’s Operator* (TPOP): Interims to June 2016 (CORP)
Companies: YGEN ZAM IOF IOG TPOP
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Trading statement for FY20
Companies: Trakm8 Holdings Plc
FY20 results: inline with guidance
CAP-XX Ltd* (CPX.L, 4.5p/£19.9m) | Gfinity plc* (GFIN.L, 3.8p/£28.9m) | MTI Wireless Edge Ltd* (MWE.L, 44p/£38.7m) | Newmark Security plc* (NWT.L, 1.175p/£5.5m)
Companies: CPX GFIN MWE NWT
Coverage of the equity securities of the following companies has been discontinued. Investors should no longer rely upon our previously published reports, valuation theses or estimates.
Companies: Ace Liberty & Stone Toople Plc
Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.
Companies: ABBY AMS ANX ARS ATYM AVON BLVN PIER BUR CGS CAML CDM CSRT TIDE CYAN JET2 DEMG ELM EMR FPO FDEV GTLY GENL GHH GRI GEEC GKP HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KAPE KEYS KWS KCT KGH LAM LIT LOK MACF MANO MOD OXIG PCA PANR APP SRE PHC PMO RBW RMM RBGP REDD RSW RNO ROR SUS SCPA SEN SHG SOLG SOM SUMO TM17 INCE TWD TRAK TRI VNET VTC ZOO ZTF
Disney+ hits 22m mobile users, SoftBank backed firm downsizes IPO, German mobile carrier selects Huawei
Companies: ENET 7DIG MVR ZOO ZOO AMO BOOM MIRA MWE
Bigblu Broadband (BBB) has reported a strong set of FY19 results that demonstrate strong organic growth, and are in line to ahead of the previous consensus estimates. This establishes a strong foundation for BBB’s future growth, and we expect that BBB will see revenue, EBITDA, and EPS growth in FY20 and FY21 despite the uncertainty caused by Coronavirus. This reflects that BBB has a robust and resilient investment case, which we explain in depth in this report. We consequently believe that BBB is undervalued on 12m fwd multiples of 5x EV/EBITDA and 7x adj P/E, and initiate with a TP of 155p or 15x FY21 adj EPS.
Companies: Bigblu Broadband Plc
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 Plc
Gamma’s performance continues to speak for itself. The positive trading update for H1 20 reflects a similar tone to that of its recent AGM statement, containing an acknowledgement of the current operating environment while reporting a good performance for the six months. A high rate of recurring revenue, ‘minimal’ contract cancellations and no increase in bad debts remain key features. It was a busy first half with continued demand (albeit COVID-19 affected in Q2) for Cloud PBX and UCaaS (Unified Communications as a Service) products in the UK. Acquisitions in Spain and the UK were swiftly followed by the HFO deal in Germany in early July and the purchase of GnTel in the Netherlands last week. Management expects that EBITDA and EPS will be ahead of consensus for the year. We note the strong momentum in the business but, as we are at the upper end of the consensus range, we leave our estimates unchanged at present.
A poor Q2 performance for Telefonica although this had been expected given, in particular, the double penalty linked to the South American currency weakness vs the Euro (in particular the Brazilain Real) during the pandemic.
For 2020 Telefónica nonetheless remains on track to deliver a slightly negative to flat EBITDA-capex yoy in organic terms but… at constant currency. The key point thus remains that the 2020 dividend is confirmed at €0.40.
Companies: Telefónica SA
Good H1 performance from the provider of communications and radio frequency solutions given the global backdrop with revenue growth in all three divisions (Antenna, Mottech and Distribution) and overall growth of 3% to $19.6m. Operating profit increased significantly (+28% to $1.9m) with EBIT margin +190bps, reflecting operating leverage and cost savings. Strong cash conversion resulted in net cash of $7.6m (H1 FY19: $5.0m), post April’s final dividend payment ($1.8m). MTI’s diversified business (sector and geography) has provided some protection against COVID-19 as different countries have entered/emerged from lockdown as evidenced by recent Mottech contract wins in China. Management’s confidence in the outlook is underpinned by order book strength and MTI is currently on track to meet our FY20 profitability expectations. Forecasts and 46p/share fair value, equivalent to 13x FY21 EPS, remain unchanged.
Companies: MTI Wireless Edge Ltd.
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
Today’s results for YE March 2020, are somewhat historic having been flagged by the trading update back in April. However, they do reflect the impact that COVID-19 has had on international business, as well as actions SRT has taken to secure its future. Lockdowns put a hold on existing and new system projects, causing a delay in both revenues and expected contract signings during the final months of FY 2020 through H1 2021. Also, we highlight that SRT has prudently impaired an existing long-standing contract for a monitoring system in the Middle East to clear the decks for a new larger contract that includes both monitoring system and transceivers. Existing Systems contracts are again under way, with £8.5m received on deliveries, and negotiations have restarted on the expected new contracts. Meanwhile, the Transceivers business grew by 24% in the FY 2020, and surprisingly, is reported to be trading marginally ahead of last year in FY 2021 to date despite COVID restrictions.
Companies: SRT Marine Systems Plc
Gamma has delivered this morning another strong set of results for H1 to June. Despite the COVID-19 challenges, the business has grown organically, and the acquisition programme is delivering well on its promise of European expansion. The group is positioned well to build revenues on and around Microsoft Teams, which is clearly benefiting from the work-from-home trend. We raise our profit estimates for all three forecast years as a sign of confidence in ongoing growth and look forward to further strong performance (and potentially even further M&A) into H2 and beyond.