The group has announced a ‘win-win’ agreement with ATMS (a Bridgestone subsidiary), having signed an exclusive worldwide licence agreement for the use of iTrack IP for 10 years, giving TRT regular quarterly royalties. iTrack’s operating business was also transferred to ATMS. Bridgestone provides iTrack with a pre-eminent route to market, which greatly enhances iTrack’s ability to expand substantially coverage in the mining sector far beyond the level TRT could realistically achieve. David Ford and Graham Storey transfer with iTrack to become ATMS management along with the rest of the iTrack team, thus substantially reducing overheads. Nigel Rogers becomes Exec Chair of TRT, which generates royalty income and continues to develop its SAWSense and Translogik products. The trading update points to trading in line, with little COVID effect.
Companies: Transense Technologies
Transense Technologies (TRT): Corp
Tracsis (TRCS): Corp Positive trading update | Transense Technologies (TRT): Corp Interim results: Important commercial signals
Companies: Transense Technologies Tracsis
Interim results highlight that commercial traction continues to gain pace, with a 50% growth in iTrack subscriptions. The exclusive relationship with Bridgestone recently reaffirmed, and the resultant potential customer trials running at a high level, have however produced higher near-term customer support costs. Boardroom changes highlight the increased focus on iTrack operational developments and strategic opportunities. We have adjusted forecasts to reflect a longer sales cycle and higher customer support costs.
Byotrol (BYOT): Corp Interims underpin FY 2020 outlook | PCI Pal (PCIP): Corp US contract win highlights ongoing momentum | Trackwise Designs (TWD): Corp H2 challenges remain, but IHT is a huge opportunity | Transense Technologies (TRT): Corp AGM trading update
Companies: BYOT TRT PCIP TWD
Armadale Capital (ACP): Corp Mahenge Liandu project update | Circassia (CIR): Corp Initiation report: interims clarify misperceptions | eve Sleep (EVE): Corp Inline H1; KPIs show good progress, with much still to do | Hardide (HDD): Corp Encouraging year-end trading update | Independent Oil & Gas (IOG): Corp Herculean interims | Pelatro (PTRO): Corp Focus on recurring revenue intensifies H2 weighting | Savannah Resources (SAV): Corp Interim results | Surface Transforms (SCE): Corp Breaking into a new OEM | Transense Technologies (TRT): Corp Full-year results start to show strong commercial traction
Companies: ACP HDD IOG SAV SCE TRT PTRO EVE CIR
Full-year results were slightly ahead of expectations, with a strong improvement in numbers, albeit from a small base, but crucially boosted by a pivotal acceleration in commercial traction. iTrack II has following an initial order from Bridgestone signed a significant Joint Collaboration Agreement. In the same year the SAW sensor has taken a major step forward with the GE engine being selected by the US Army for the future replacement of engines on its fleets of Apache and Black Hawk helicopters. No change to forecasts.
The company has announced a Joint Collaboration Agreement with Bridgestone. Bridgestone is one of the world’s largest tyre manufacturers and the largest supplier of tyres to the mining OTR market and follows extensive product testing of the iTrack II system. This is a highly significant agreement and a milestone in the company’s commercialisation as Bridgestone will act as sales agent for TRT in the mining large-haul market. We see this as a huge boost to Transense, both in terms of a technical endorsement but also once sales start to accrue. We make no change to our forecasts as yet until we understand the rate of sales build up. This provides much greater confidence in the commercial success of the company. Investors should recognise just how momentous this agreement is. We reiterate our upside potential, with a 140p price target.
Independent Oil & Gas (IOG): Corp Capital structure update | Iofina (IOF): Corp IofinaEX goes global | Savannah Resources (SAV): Corp Successful glass and ceramics test programme | Transense Technologies (TRT): Corp Major contract with Bridgestone
Companies: IOG IOF SAV TRT
Bluejay Mining* (JAY LN) – Dr. Bo Møller Stensgaard appointed as Executive Director | Caledonia Mining (CMCL LN) – Guidance adjustment and positive news on Zimbabwe’s fiscal discipline | Horizonte Minerals (HZM LN) – Initial resource estimate for Serra do Tapa | Savannah Resources* (SAV LN) –Tests demonstrate potential glass and ceramic feedstock from Mina do Barroso | Transense Technologies (TRT LN) - Joint Collaboration Agreement with Bridgestone
Companies: JAY CMCL HZM SAV TRT
The group’s post year-end trading update is extremely encouraging, showing strong commercial traction, with 2H sales growth greater than expected resulting in revenue being about £0.2m, (or 10.8%) better than our forecast and resulting in EBITDA and post-tax earnings better than expected. It’s very pleasing to see good momentum in subscriptions revenues, which provides a strong ongoing and predictable base to future revenues. We continue to see strong upside to the shares – the market cap at just £7.3m offers potentially an order of magnitude on the upside with further commercial traction and new OEM orders anticipated.
Amino Technologies (AMO): Corp 24i Media collaboration | Gateley (GLTY): Corp Delivering additional value | Transense Technologies (TRT): Corp Better than expected year-end update
Companies: AMO TRT GTLY
Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.
Companies: BXP MCM KAPE TRT NWF AMS KRS FJET PYC
Three substantial contracts in recent weeks shows accelerating commercial momentum and positioning the company on the brink of profitability with rising subscription-based revenues. The company has raised £2.555m via a placing, with greater balance sheet strength providing new customers greater confidence and allowing for additional working capital for growth. The current market cap is no where close to representing the company’s current prospects, even after the recent positive reaction to the announcements
Anglo Asian Mining (AAZ LN) BUY – 96p (from 108p) – Earnings update | Glencore (GLEN LN) – Glencore claim record EBITDA on strong copper mine performance | Landore Resources (LND LN) – BAM Gold Preliminary Economic Assessment | Pan African Resources (PAF LN) – Earnings climb as operations refocus on profitable ounces | Transense Technologies plc (TRT LN) – 2nd mining contract announced this week for mining heavy truck tracking & tyre pressure monitoring
Companies: AAZ GLEN LND PAF TRT
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A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
Companies: AGY ARBB ARIX BUR CMH CLIG DNL HAYD NSF PCA PIN PXC PHP RE/ RECI SCE SHED VTA
The ongoing pandemic only serves to underline business models that are robust, and those that aren’t. This morning’s trading update from UPGS puts them firmly in the winners’ category. As the company approaches the final weeks of FY2020, it not only reports “better than expected progress” against an uncertain business backdrop, but also that revenue and key profit measures for the year should be ahead of current market expectations. Furthermore, online as a portion of total business should record a fourth consecutive increase, providing additional flexibility and strength in the case of a second wave.
Companies: Up Global Sourcing
Photo-Me was trading in line with expectations until COVID-19 hit in the final months of FY 2020. FY 2020 sales declined by -5.6% to £215.4m including £22.7m sales lost due to COVID-19 as consumer activity was impacted significantly. The Board believes that activity levels could take a long time to return to pre-COVID-19 levels; a thorough review of the business is underway and restructuring programmes are being implemented to better align operations to the current trading conditions. Net cash at April 2020 was £7.9m, comprising gross cash of £66.5m and drawn debt facilities of £58.5m. A €30m additional credit facility was received in May and June.
Companies: Photo-Me International
Today’s year end update confirms that FY20 has concluded in line with current market expectations, with no surprises just three weeks on from the last update. As we have heard recently from other listed housebuilders, demand appears to be coming back strongly (net daily reservations now at 80% of pre-COVID levels) and build activity is steadily improving (currently at 60% of pre-COVID levels and expected to reach 80% by September). The most striking feature of Gleeson’s update is the ambition to resume previous site opening plans (25 new sites targeted for FY21) and, thereby, to fulfil the strategic plan of completing 2,000 homes p.a. in FY22.
Companies: MJ Gleeson
Walker Greenbank has a tangible strategic impetus under its new management team with a clear business model migration plan. While COVID-19 related market effects are affecting near-term trading – and the decision not to pay an FY20 final dividend – they are also presenting opportunities. Our estimates remain suspended for now ahead of the AGM on 29 July when an update on trading and the financial position can be expected.
Companies: Walker Greenbank
Portmeirion has provided an AGM trading update this morning effectively covering 20 weeks of H1. Online commentary is upbeat and export demand has sufficiently picked up for management to partially reopen the ceramics factory. Unsurprisingly the core retail demand in UK/USA remains subdued but we should stress Q2 (Apr-June) accounts for c25% of sales – 60% of sales and 80% of profits are made in H2. Investors should also take huge comfort around the balance sheet. Pro-active actions to minimise cash outflow means a significantly low cash burn of <£1m for the whole of Q2, whilst liquidity headroom of c£15m on our estimates is highly reassuring in the current climate. Management remain committed to reinstating the dividend once deemed prudent to do so. N+1 Singer currently has no formal forecasts in the market and will initiate coverage in due course. The stock has recovered from its 240p low in March and trades on a historic P/E of 7x and 4.5x EV/EBITDA with a >10% FCF yield and a NAV of 452p. Fundamentally the legacy brand portfolio is an attractive cash-cow with broad international appeal and significant brand equity. We feel this provides the foundation to support an exciting NPD/online/Wax Lyrical led strategy recently unveiled by the new CEO. The share price at the current depressed level presents an attractive entry point for investors looking for deep value, asset backed plays on a mid-term basis.
Companies: Portmeirion Group
Full year results slightly ahead; improving trend in trading since April
Walker Greenbank is a higher end interior furnishings business with well-established global brand names and manufacturing facilities in the UK. The Group has this morning released full year results to 31 January 2020, slightly ahead of our forecasts at the PBT and EPS levels. During the year, and against what was already a challenging wider market backdrop, brands such as Morris & Co as well as the group's core licensing revenue stream largely offset wider weakness in the UK and US markets. As would be expected, trading since year-end has been extremely difficult, with product sales c.35% down in the first five months of the current financial year. Encouragingly, product sales in the last four weeks are reported to have been 31% below the comparative period, reflecting a steadily improving trend since the beginning of April. At this stage we leave our forecasts under review but it is encouraging to see the more recent improvement in trading patterns, whilst internal actions and the refocused strategy continue to improve the outlook for the group.
We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.
Companies: BCA CLIN CLG CBP DNLM EAH STU FCRM FUTR GTLY INS GLE NICL SDL SPR TRI
Red Dwarf, the very British sci-fi comedy franchise, ran for 11 seasons – most recently in 2017; and The Promised Land is a feature-length TV movie – out this year. Yes, the programme is an acquired taste. Strangely, too, many episodes are impacted by a virus or three (physiological, not main-frame).
Companies: WJG BKG CSP CRST MCS INL BDEV RDW GLE SPR TW/ PSN VTY GLV CRN ABBY BWY
UPGS released an unscheduled trading statement this morning which confirms better than expected numbers for FY2020 sales revenue, profitability, and net debt. A more encouraging outcome than previously envisaged when the company reported its interim results on 30th April.
Whether we know it or not, advanced materials are a core component in the everyday life of the everyday person. They are the key material in items we often disregard, such as printer inks and lotions, to objects which defy the laws of gravity like the Airbus A380 and London’s Shard. Furthermore, these materials are not only essential to many objects and structures, but, due to their superior qualities, are the key to the advancement of many industries. One such example is the use of carbon fibre which offers five to ten times more rigidness, stiffness, and strength than its aluminium counterpart. As a result of these impressive qualities, motorsport and athletics have improved ten-fold since their mainstream use and new records are broken every year.
Companies: AGM AUTG BIOM BOY CAR CKT EMH EXO GRPH HAYD IKA ITX CRPR MGAM NANO OXIG SYN SCE SYM VCT ZEN HDD
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
Churchill China has had another strong trading period and this is articulated in today’s H1 trading update. The business continued to sustain good export momentum, led by Europe, whilst UK Hospitality also moved forward despite Brexit uncertainty. We are lifting our 3 year EPS forecasts by 3.5%-4.0% this morning and see the risk on the upside as the year progresses. The shares currently trade on a 2019 P/E of 20x falling to 18x. On a 12m view we see fair value >1850p (22.5x FY20 P/E). Overall, today’s news further reinforces Churchill’s ongoing value creation and growth attributes. Non holders should take a close look at this high quality small-cap stock operating in an attractive global market with secular growth features.
Companies: Churchill China
Games Workshop’s (GAW) interim results are ahead of expectations. The highest rates of revenue growth were achieved in the channels with the highest operating margins, ie Trade (40% margin) and Online (64% margin). This has produced a strong improvement in free cash flow generation and ROCE has improved from 96% to 111%. We upgrade our forecasts for FY20 and FY21 by a further 3% following the 9% upgrade in November. Our DCF-based valuation increases by 11% to 5,748p.
Companies: Games Workshop Group
COVID-19 update: div. suspended, expect downturn in orders
Companies: Headlam Group