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Flowtech Fluidpower
Business update

Flowtech has released an update post its Q1 detailing the impact from COVID-19 and the actions the Board has taken. Trading over the first three months of FY20 was in line with guidance provided in the February update. However, the impact of COVID-19 in the final few weeks indicate that trading in the early part of Q2 will be impacted. Currently revenue is 30% below expectations with the potential for a further deterioration. The statement indicates that the business is relatively resilient and that a sustained 35% fall in revenue would leave the business breakeven, on the assumption that Government support in the UK, Netherlands and the Republic of Ireland is utilised. Balance sheet liquidity is c. £9.4m on £25.0m facilities recently extended to June 2021. In addition, and in line with what many companies have announced, the final dividend for FY19, ZC estimate 4.3p, will be suspended to conserve cash. We leave forecasts in FY20 and FY21 unchanged for the time being, until there is greater clarity on trading.

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  • 02 Apr 20
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JTC
Perfect US partner & platform

What’s new: JTC has agreed to acquire NES Financial (“NESF” website https://nesfinancial.com), a US tech-enabled, market leading provider of specialist fund administration services for a max consideration of 21.7m JTC shares and US$0.25m in cash (i.e. £93.3m at 430p a JTC share) At completion, expected in 2Q20, initial consideration of 7.45m JTC shares (US$40m or £32m at 430p) and US$250,000 in cash will be paid to external shareholders and NESF management (Ms Alton and Messrs Halloran, Thomas, Joubert, Richards, and Hart), these managers and 52 other NESF employees will join JTC‘s ISC division, with Mr Halloran becoming Global Head of Technology Strategy and joining the Exec Board. Additional consideration of 14.25m JTC shares based on achievement of underlying EBITDA targets over the next 2 years, with max being 12.5x US$9.3m. JTC expects “integration to be relatively swift”.

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  • 02 Apr 20
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Centralnic Group
Next phase of growth

The company announced several appointments that have strengthened the management team after seven acquisitions over the past two calendar years. We believe this investment in management should form a strong foundation for the company’s next phase of growth. Alex Siffrin, the company’s largest shareholder, has stepped down from the board to focus on personal priorities

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  • 01 Apr 20
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Purplebricks Group
COVID-19 update

What’s new. This morning Purplebricks UK has provided an “update regarding current trading and the potential impact of COVID-19 and Govt guidance on the UK housing market.” Key points are: 1. Purplebricks first priority is health of people and customers: its online business model includes “video valuations, virtual viewings, connecting customers with potential purchasers via Purplebricks online platform.” 2. Govt restrictions on movement are weakening vendor and purchaser activity; deferral of completions would have a further negative impact. 3. Immediate cost-saving measures will materially reduce cash burn including suspending TV and radio advertising, reducing online marketing, taking advantage of the Government Job Retention Scheme. 4. Purplebricks currently has net cash of £35m and no debt.

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  • 30 Mar 20
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DWF Group
Trading Update

DWF has issued a trading update, indicating that its Commercial business has been hit by COVID-19, with International also not growing to our expectations. While we believe DWF remains capable of delivering its medium-term guidance implying an attractive long-term investment proposition, the earnings downgrade of 34% is no doubt disappointing. We are suspending our forecasts from 2021E, with the 2020E dividend under consideration.

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  • 27 Mar 20
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Epwin Group
COVID-19 update

Epwin has announced that it will implement a controlled shut down of its operating facilities for a temporary period in response to the anticipated reduction in demand. FY19 results, that had been scheduled to be released on the 2nd April, will now also be delayed as per guidance from the FCA that has been supported by the QCA. This is in line with many other companies. Epwin benefits from a strong balance sheet that has significant headroom and will come through this difficult period in a strong position relative to competitors that have much weaker balance sheets. Frustratingly trading in the new year had started well and was ahead of budget.

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  • 25 Mar 20
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