DOTD IDEA VEL ZOO

 Upgrade to View

Instem

Instem’s trading update for the twelve months ending December 2018 confirms that all three key business areas (Data Collection, Regulatory Solutions and Informatics) are performing well, with underlying group EBITDA in line with management’s expectations. Momentum in SEND Services remains strong, with order value +500% YoY. Management commentary on the outlook is positive, and we make no changes to earnings estimates following the announcement.

 View

FDM Group

FDM’s trading update provides reassurance around the 2018 outcome (which appears to be ahead of our expectations in terms of revenue and Mountie numbers) and in terms of the outlook for 2019 and beyond. The announcement describes “record levels of client engagement and demand” and presents a strong and upbeat message. We take comfort from both the metrics and the upbeat tone – we make no changes to forecasts, but strongly reiterate our Buy recommendation and 1050p Target Price.

 View

Zoo Digital Group

ZOO Digital (“ZOO”) has announced a likely shortfall in revenues for the year to March 2019. The group has seen a double whammy – a steep decline in legacy (but high margin) “packaging” work on DVD/Blu-ray, and the cancellation of one unusually large order from one of its major customers. We make material reductions to 2019E EBITDA, but leave 2020E unchanged as the medium-term outlook remains bright.

 View

Cloudcall Group

The Capital Markets Day highlighted the positive market dynamics and large addressable market CloudCall is successfully selling into. Customer testimonials point to considerable potential upside in both the US and Europe. New products and future CRM partnerships enlarge this still further. We remain Buyers.

 View

Pennant International Group

A string of positive announcements from Pennant in recent months has briefed the market on contract wins, conditional awards and positive H1 results. This morning’s FY18 closing announcement reflects the strong progression of the company YoY with PBTA up around 57%, an impressive achievement by any standards. Beyond this, and with major contracts underway, upgrades to infrastructure / facilities, together with meaningful operational appointments, already flagged, are contributing to the platform during a period of significant activity. Net cash at £2m is aligned to our forecast, and the >£37m order book is ahead of any increase assuming conversion of the “down-select” (£25-30m), announced in August, on which we continue to await news. That there are no EU supply chains or customers to speak of is a comfort in the current confused national situation, and per this morning’s announcement, the business remains on track to deliver.

 View

Cloudcall Group Vianet Group

With Technology having outperformed broader equity indices – on both sides of the Atlantic - for close to a decade, a perfect storm of US-China/Brexit trade frictions, cautious consumer behaviour and semiconductor earnings peak in the context of weakening macro indicators in the UK and Europe, have brought on a robust correction. We see many of these factors as likely to overspill into 2019, establishing a cautious mood into H1.

 View

SDL

SDL has released a positive trading update indicating that it expects full year revenues in the range £323m-£325m and adjusted EBITA of no less than £28.5m, in line with expectations. Year-end net cash of £14.4m was much better than expected. We have updated our FY 2018 estimates to reflect the indications in the update, but left our FY 2019 and FY 2020 revenue and earnings forecasts unchanged pending additional guidance on trading momentum and cost synergies when results are released on 20 March. We have increased our year-end net cash estimates to reflect the strong performance in FY 2018. This latest update firmly underpins our confidence that a combination of good progress against strategic objectives, stabilised trading in 2018 and conservative forecasts will drive upgrades and a considerable re-rating in 2019. SDL is an N+1 Singer Best Idea for 2019.

 View

Cloudcall Group

CloudCall’s Capital Markets Day presentations featured a breakdown of 2019’s growth drivers, Q&A sessions with key channel partners Bullhorn and Microsoft, and a breakdown of the group’s SaaS metrics. Our key takeaways are on strength of the Bullhorn partnership, the scale of the opportunity with Microsoft and upsell potential from messaging features. We reiterate our Buy rating; CloudCall is one of our top picks for ’19.

 View

MGR ESL BONH KOD SWG CCT IRON LOOP EMAN

Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected late January 2019. Chaarat Gold Holdings—RTO, the Company intends to acquire Kapan Mining and Processing CJSC, which owns the Shahumyan medium-sized polymetallic mine in Kapan in the Republic of Armenia. No raise, market cap of £110.1m, due early Feb

 View