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Knights Group

Interim trading update – in line with expectations

Knights has released a trading update for the 6m ended 31 October 2019, confirming performance is in line with market expectations. Growth from prior acquisitions (excluding Emms Gilmore Liberson, which was acquired post period-end) was complemented by double digit organic revenue growth. We maintain our PT of 330p, and Neutral recommendation; on current forecasts (yet to be updated for the EGL acquisition) the shares trade on 20x FY20E P/E, which we believe is largely up with events.

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  • 21 Nov 19
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Dart Group

Strong Interim Results – FY upgrades, Buy

Dart Group has reported another strong set of interim results and indicates that the Board now expects current market expectations for FY20 to be significantly exceeded. In our view, the Group’s strategy and focus on customer service and a flexible offering has put it in a position to benefit from the current market conditions following the exit of Thomas Cook and we anticipate the Group will continue to build on this position in the medium term to overcome inherent industry cost challenges. Reiterate buy rating.

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  • 21 Nov 19
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First Property Group

H1 20 interims – on track to meet FY20 earnings; small NAV increase

H1 20 interims reported group revenues of £8.1m (+9.8% y/y LFL) and adj. PBT (excl. FX, and non-recurring items) of £3.1m (vs. our FY20e estimate of £6.2m), positioning the group in good stead to meet our unchanged FY expectations. Adj. NAV rose ~4% to 59.7p from 57.5p at March 2019. The group has declared an interim dividend of 0.45p (ex-div 28 Nov, and in line with our forecasts). Operationally, AUM has decreased ~1% since Mar 19. Elsewhere, occupancy at CH8 in Warsaw now stands at 80% and negotiations have now commenced to re-lease Gdynia. Our headline PBT estimates are unchanged though we make small changes within this, as well as to our cashflow and NAV forecasts (explained below). At a mere 9.2x FY20e P/E, ~4% yield and ~30% NAV discount, we reiterate our Buy rec seeing good upside at current levels.

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  • 21 Nov 19
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Manolete Partners

Interim results – first look

Gross profits up 50%: As with all litigation funders, we focus on the gross profits as this reflects the net gain on investments. Pleasingly, GP was 50% ahead of the comparable period following settlements of cases and, mainly, developments in ongoing matters (fair value uplifts). Whilst realised GP fell from c.£2.2m to c.£1.0m, Management expects increased cash realisations in H2 given the 32 live cases that are in advanced settlement stages. Indeed, Manolete has received an additional £0.8m of settlements since the period close. As at 7 November 2019, ROIC remains at a market leading 159% (last reported 180%), which could be skewed upwards in H2 should these advanced cases settle favourably.

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  • 21 Nov 19
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BGO BOKU EQLS TRU NETW

Plaid pushes into Europe, PayPal buys Honey for US$4bn, Robinhood announces 2020 UK launch

Plaid, the U.S. start-up, whose software helps link fintech apps with people's bank accounts, said on Thursday it was now rolling out its services in Ireland, France and Spain. According to consultancy firm EY's global fintech adoption index, Ireland's level of adoption stands at 71%, Spain's at 56% and France's at 35%. "Ireland is going to continue to grow and generate really fantastic companies," Plaid's chief said. Plaid is one of our top two Fintechs to watch. PayPal is making the biggest acquisition in its two-decade history, announcing on Wednesday that it's buying Honey Science for about $4 billion. Honey, which is best known for providing a service that helps consumers find deals while they shop online, works with 30,000 online retailers and claims to have 17 million monthly users. PayPal said Honey's technology will help it reach consumers as they begin their "Shopping journeys" with personalized offers. In our view, PayPal’s deal may demonstrate a step toward the new normal of leveraging consumer data. Commission-free stock trading app Robinhood has announced plans to officially launch in the UK next year, marking its first market outside the US. The fintech 'unicorn' opened a waiting list for UK customers following yesterday’s announcement, with Rander Rutgers, head of Robinhood UK, telling Yahoo Finance UK that the app would be tailored to the UK market. We believe that the solvency of a number of UK-based legacy brokers will be tested as aggressive subsidisation and lower overheads of FinTechs drives down pricing.

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  • 21 Nov 19
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Macfarlane Group

Resilience Mispriced

Macfarlane Group has released a trading update for the 4 months to 31 October demonstrating the resilience of the Group’s activities and strategy. Assuming the normal seasonal uplift through Q4, the Board expects full year results to be ahead of last year and in line with its expectations. In our view, the current share price does not reflect the relative defensive characteristics of the business and thus we see today’s update as an endorsement of strategy and believe the stock should trade comfortably above current levels. Reiterate buy.

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  • 20 Nov 19
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BGO BOKU EQLS TRU NETW

Plaid pushes into Europe, PayPal buys Honey for US$4bn, Robinhood announces 2020 UK launch

Plaid, the U.S. start-up, whose software helps link fintech apps with people's bank accounts, said on Thursday it was now rolling out its services in Ireland, France and Spain. According to consultancy firm EY's global fintech adoption index, Ireland's level of adoption stands at 71%, Spain's at 56% and France's at 35%. "Ireland is going to continue to grow and generate really fantastic companies," Plaid's chief said. Plaid is one of our top two Fintechs to watch. PayPal is making the biggest acquisition in its two-decade history, announcing on Wednesday that it's buying Honey Science for about $4 billion. Honey, which is best known for providing a service that helps consumers find deals while they shop online, works with 30,000 online retailers and claims to have 17 million monthly users. PayPal said Honey's technology will help it reach consumers as they begin their "Shopping journeys" with personalized offers. In our view, PayPal’s deal may demonstrate a step toward the new normal of leveraging consumer data. Commission-free stock trading app Robinhood has announced plans to officially launch in the UK next year, marking its first market outside the US. The fintech 'unicorn' opened a waiting list for UK customers following yesterday’s announcement, with Rander Rutgers, head of Robinhood UK, telling Yahoo Finance UK that the app would be tailored to the UK market. We believe that the solvency of a number of UK-based legacy brokers will be tested as aggressive subsidisation and lower overheads of FinTechs drives down pricing.

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  • 21 Nov 19
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MRO SXS ELM TTG RSW OXIG GHH SCPA TRI DIA

Ford enters electric car race, Melrose sees good aerospace growth, Spectris reports lower LFL sales in North America & China

Melrose (MRO LN, £10.8bn) | Trifast (TRI LN, £201m) | Spectris (SXS LN, £3.0bn) | Elementis (ELM LN, £994m) | TT Electronics (TTG LN, £401m) | Renishaw (RSW LN, £2.8bn) | Oxford Instruments (OXIG LN, £904m) | Gooch & Housego (GHH LN, £295m) | Scapa (SCPA LN, £358m) | Trifast# (TRI LN, £201m) | Dialight (DIA LN, £88m)

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  • 19 Nov 19
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DPLM IQE ESL PRES CMH

US industrial production misses in Oct, Diploma expects “moderately lower u/l growth,” IQE issues warning but “cautiously optimistic” on 2020

Diploma (DPLM LN, £1.9bn) FY19 results (30/09) – u/l rev growth 5% y/y vs. +7% y/y in FY18; adj. operating margin +30bps y/y from stronger GM and cost controls; adj. PBT +14% y/y; DPS +14% y/y; outlook expects “moderately lower underlying growth” from political & economic uncertainty to be offset by strong acquisition contributions | IQE (IQE LN, £609m) FY19 trading update revises down rev guidance by ~7% (mid-point), expecting “mid-single digit adj. operating loss”; expects seasonally weak Q1 2020 but “cautiously optimistic about a return to growth” | Eddie Stobart (ESL LN, £269m) may receive £75m rescue package from former boss Andrew Tinkler, adding an alternative to last week’s Dbay offer (source: FT.com) | Pressure Technologies (PRES LN, £19m) confirms commencement of trial relating to prosecution by HSE following fatal accident in June 2015 | Chamberlin (CMH LN, £2m) H1 20 interims (30/09) reports 26% y/y fall in revenues; op. loss pre-restructuring increased from £0.4m to £1.0m; expect better H2 due to higher volumes from existing automotive customers; new contracts and higher selling prices but anticipate small loss for FY20

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  • 18 Nov 19
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7DIG EVRH ZOO AMO MIRA

TikTok plans streaming launch, HP reject Xerox bid, Softbank to create $30bn tech giant

TikTok owner Beijing ByteDance Technology is in talks with big music labels - Universal Music, Sony Music and Warner Music - for global licensing deals to include their songs on its new music subscription service, the Financial Times reported on Sunday. ByteDance is looking to launch its music streaming as soon as next month, initially in emerging markets such as India, Indonesia and Brazil, before a future opening in the United States, the FT reported, citing people familiar with the matter. HP's board of directors said Sunday that they unanimously rejected a proposal from Xerox to acquire the company, because the offer is not in the best interest of shareholders and would undervalue HP. Xerox had offered HP $22 per share in its takeover bid for the company. HP is worth $29 billion and is over three times the size of Xerox, which makes printers and copiers, in terms of market cap. Japan's SoftBank plans to merge internet unit Yahoo Japan with messaging app operator Line Corp to create a $30 billion tech giant, as it bags struggling internet companies to bulk up against rivals like Rakuten Inc. The telco in a statement said Yahoo Japan, which last month changed its name to Z Holdings Corp, will merge with Line, owned by South Korea's Naver Corp, in a deal to be completed in October 2020. The companies aim for a definitive agreement by next month in a transaction that will see SoftBank Corp and Naver form a 50:50 venture that will control Z Holdings, which will in turn operate Yahoo Japan and Line.

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  • 18 Nov 19
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EVRH TEK IMMO TERN TRAK CPX SEE TCM TCM TRCS QTX

Smartglasses are coming; Chinese auto startup raises US$400m

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.

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  • 13 Nov 19
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7DIG ZOO AMO ESYS KNOS MIRA

Dropbox beats on key metrics, WhatsApp rolls out catalogue feature, Disney downplays Netflix rivalry

Dropbox shares bounced around after the company reported betterthan-expected third-quarter earnings on Thursday, as investors digested the company's improvements on some key metrics but widening GAAP losses from a year ago. Earnings excluding certain items came in at, 13 cents per share, vs. 11 cents per share as expected by analysts, according to Refinitiv.

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  • 08 Nov 19
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