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AVCT SCE AGL TRCS ORPH
Morning Note – 28 September 2020


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  • 28 Sep 20
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Avacta Group Plc
Avacta - Interim results – new forecast, new target price

Interim results to 30 June reflected a step-up in research activity post-June fundraise as it seeks to take its first pre|CISION targeted chemotherapy into clinical trials in early 2021. With period-end cash of £54.5m, Avacta has a cash runway into 2023, providing the necessary working capital to deliver a rapid SARS-CoV2 antigen test, take AVA6000 into the clinic, as well as its first Affimer immunotherapy and the next pre|CISION pro-drug into the clinic. Avacta is aiming to have validated its rapid SARS-CoV-2 antigen test in Q4 2020, the exact timing of which is dependent on pilot batch product from BBI Solutions. However, it is increasingly clear that there is a need for mass screening tests to isolate and remove infectious people, with Avacta’s test at the forefront. We have made changes to FY 2020 forecasts, introduce FY 2021 forecasts and a target price of 310p with a range of 211-796p.

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  • 28 Sep 20
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Surface Transforms Plc
Surface Transforms - H1 2020 results: impressive progress

SCE has announced interim results for the six-month period ending June 2020. Considering these results cover a period when much of the world was experiencing a great deal of upheaval due to COVID, in our view they show impressive progress. The big news, or course, has been the recent game-changing contract win from OEM 8 on 14/9/2020. Having significantly upgraded our forecasts and target price then, we make no further changes today.

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  • 28 Sep 20
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Byotrol Plc Eleco Plc
Morning Note – 24 September 2020

Byotrol (BYOT): Corp FY 2020 results – positive outlook drives upgrades | Eleco (ELCO): Corp New name and management but recurring revenue

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  • 24 Sep 20
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Eleco Plc
New name and management but recurring revenue

As flagged in the July trading update, the Eleco group (formerly Elecosoft) has delivered impressive first half financials in the face of the global pandemic. However, the results are somewhat overshadowed by the retirement of Executive Chairman, John Ketteley, after 23 years in the role. The COO, Jonathan Hunter, takes over as CEO and the Deputy Chairman, Serena Lang, steps up to Chairman. Both are very experienced and offer safe hands to guide Eleco forward through the unprecedented conditions of COVID-19. In the early stages of the pandemic, the group demonstrated its resilience as H1 revenue slipped just 4% YoY with 57% revenue being recurring. Moreover, benefiting from reduced cost of travel and marketing, H1 adj. PBT rose 12% YoY to £2.2m. The profit uplift was matched by strong cashflow, improving net cash from £1.1m at YE to a very healthy £4.4m at the end of June. Forecasts remain under review due to uncertainty in the COVID-19 environment, but Eleco continues to be well positioned – not just to weather the storm of pandemic, but to deliver a strong financial performance across the full year.

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  • 24 Sep 20
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Byotrol Plc
FY 2020 results – positive outlook drives upgrades

Byotrol’s FY 2020 full-year results are inconsequential, given the dramatic and positive impact that the COVID-19 pandemic has had to product sales since the year-end. However, year-end cash was £0.1m above forecast at £1.7m and when combined with positive cashflow since year-end, Byotrol is well-resourced to finance its ongoing operations and steady growth. With the order-book remaining strong (c.£1.1m at 31 August), despite summer lull, and demand likely to persist for some time, given the emerging second wave of coronavirus, we upgrade EBITDA to reflect lower costs and higher licensing income. If, as we suspect, the demand curve has shifted sustainably to the right, this leaves room for further upgrades. Consequently, we raise our target price to 11p, at which level the stock would trade on EV/Sales and EV/EBITDA of 4.1x and 26.9x, respectively. Future revenues and milestones from licensing deals will be largely additive.

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  • 24 Sep 20
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Morning Note – 24 September 2020

Byotrol (BYOT): Corp FY 2020 results – positive outlook drives upgrades | Eleco (ELCO): Corp New name and management but recurring revenue

Byotrol Plc Eleco Plc

  • 24 Sep 20
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Morning Note – 23 September 2020

Allergy Therapeutics (AGY): Corp FY 2020 – record pre-R&D EBIT | Amino Technologies (AMO): Corp Argentinian software contract win | ANGLE (AGL): Corp Peer reviewed publication, using Parsortix in MBC | Bigblu Broadband (BBB): Corp Quickline secures up to £6.1m of subsidy in Lincolnshire | Hardide (HDD): Corp Trading in line with a stronger Q1 expected | Trackwise Designs (TWD): Corp Interim results, new contracts boost confidence | Xeros (XSG): Corp Commercial progress tracking in line with expectations

AGY AMO HDD AGL XSG TWD BBB

  • 23 Sep 20
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Morning Note – 22 September 2020

Cambridge Cognition (COG): Corp | Frenkel Topping (FEN): Corp | Ideagen (IDEA): Corp | Iofina (IOF): Corp | K3 Capital (K3C): Corp | NAHL (NAH): Corp | President Energy (PPC): Corp | Tremor (TRMR): Corp | Trifast (TRI): Corp

COG FEN IDEA IOF K3C TRMR TRI PPC NAH

  • 22 Sep 20
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Take that to the bank

Excellent news for Iofina, which has announced the long-awaited refinancing of its debt, entering into a new loan agreement with a regional US bank. The new facility provides debt capital of up to US$18m, which will be used to pay off the US$15.5m of existing debt and provide additional working capital. The interest rate on the new debt is significantly lower than the previous facility and our expectation. Moreover, conclusion of the refinancing removes an overhang on the shares and frees management up to focus on delivering further growth from its core iodine and iodine derivatives business. We are raising our DCF-based price target 3% to 33p to reflect Iofina’s lower cost of capital resulting from the refinancing.

Iofina Plc

  • 22 Sep 20
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H1 ahead, strong Q3 update, upgraded FY20 forecasts

Tremor has announced H1 results ahead of expectations from the AGM trading update on 18 June, with revenue of $136.5m (previous range $131-135m) and EBITDA of $1.8m (previous range -$3m to -$6m). This reflects that since the trading update, Tremor has capitalised upon a rebound in advertising spend through the success of initiatives it launched in 2019, and the successful integration of Unruly, which is attracting new clients to Tremor’s platform and enabling the cross-selling of Tremor’s solutions into Unruly’s tier 1 client base. This has driven Tremor’s expected Q3 revenue to $97.5-103.5m ($66m in Q2), with Q3 adjusted EBITDA of c$11m (H1 $1.8m), and c$49m of Q3 revenue from key initiatives from $25m in Q2. This strong momentum leads us to upgrade our FY20 revenue by +9% to $330m from $304m, and upgrade our FY20 EBITDA to $25.0m from $15.9m. As visibility has also improved for FY21, we retire the previous FY21 forecasts that were our FY20 forecasts from before COVID-19 ($424m revenue and $75m EBITDA), and our new FY21 forecasts of $420m of revenue and $55m of EBITDA reflect the new gross margin mix of Tremor’s new initiatives with less fully-managed services. These forecasts demonstrate FY21 organic revenue growth of +27% and +120% at EBITDA, and as we explain in more depth from p9, this reflects Tremor’s differentiated platform capitalising on the growth in Connected TV (CTV) and digital video advertising. Overall, this means Tremor looks substantially undervalued on 9x FY20 EV/EBITDA or 4x NTM, and a NTM EFCF yield of 6% with FY20 net cash of $71m; vs peers on 15-17x EV/EBITDA with NTM EBITDA growth of 11-40% and EFCF yields of 1-4%.

Tremor International Ltd.

  • 22 Sep 20
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Morning Note – 18 September 2020

Crimson Tide (TIDE): Corp Growing long-term subscription revenues | Gemfields (GEM): Corp 1H20 results | Trackwise Designs (TWD): Corp Production contract with EV manufacturer

GML TWD TIDE

  • 18 Sep 20
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