Telecoms

Telecoms equity research

Explore the most viewed and latest equity research and media content for companies within the Telecoms sector. Stocks in this sector provide telecoms services & equipment, and mobile services.

Telecoms equity research

Explore the most viewed and latest equity research and media content for companies within the Telecoms sector. Stocks in this sector provide telecoms services & equipment, and mobile services.

19 Nov 18

Enlarged group on track

Nine-month results present the performance of the enlarged group as if MTI Computer Software and Services (1982) and MTI Wireless Edge (MWE) had been together since inception. The merger with MWE’s largest shareholder was completed in August and has brought numerous benefits – increasing revenue by a third, broadening the product set, diversifying the business and eliminating secondary listing fees. The companies operated in complementary spaces in the military and communications markets and already worked closely together. Despite the disruption of the merger process, the enlarged group has grown at the top and bottom lines. Small changes to P&L forecasts around tax and we increase our cash forecast by $0.4m for FY18. Our fair value of 38p/share, equivalent to an FY18 PER of 17.4x (14.9x), falling to 14.1x (11.7x), represents a 120% upside to the current price. The current price is offering a yield of 7.4% (FY18) and 9.2% (FY19).

Companies: MTI Wireless Edge

07 Jun 16

The Cybersecurity Rebellion: “No, I’m Spartacus!”

Steve “Woz” Wozniak, infamous co-founder of Apple, was the latest culprit to send shivers across the tech world by claiming Cybersecurity is the greatest threat the world has faced since the atom bomb. Mr Wozniak was alluding to the heightened sense of fear that recent high profile breaches have caused Cybersecurity to be put at the forefront of political, corporate and now it would appear, investor agendas. As the topic gains increasing awareness, it gives rise to a number of companies claiming to be a “thought leader” in the Cybersecurity space, holding the best IP and the best routes to market. With many companies singing from the same loss making hymn sheet it is making it ever difficult to spot the true “Spartacus” from the crowd.

Companies: BA/ BVC BLTG CHRT 9537 CNS DFX ECK EXPN GBG IGP MPAY NCC OSI SCH TERN

08 Mar 17

Signs of recovery after a difficult 2016

As flagged by the recent trading update, group FY 2016 revenue slipped 7% YoY to $90.4m; 43% ($38.5m) of this came from Telecoms, which saw the majority of the decline in revenue as the legacy copper-based equipment sales continue to be wound down. The Bio-Medical division sales slipped just 2% YoY to $51.6m; a poor year from sterilization being compensated for by growth in diagnostics. While gross margins remained firm in both divisions (40% and 25% respectively), both slipped into operating loss; a hefty $2.2m from Telecoms (due to the loss of revenue from contracts) and $0.3m from Bio-Medical; however, the $2.5m operating loss was covered by an exceptional $3m profit on sale of a property. That sale helped cash; $1m received from operations was offset by $6m capex but cash from the sale of assets lifted BATM’s net cash from $21m to a welcome $23m at the year end.

Companies: BATM Advanced Communications

09 Nov 17

The Joy of Techs

This quarter we use finnCap’s Slide Rule to provide both top-down and bottom-up analysis of the UK’s Technology and Telecoms sectors. Our findings are very reassuring: the Tech sector scores the best (across all sectors) when considering Growth and Quality – Taptica*, Frontier Developments* and dotDigital* in particular stand out on these metrics. Given these attractive characteristics and growth prospects, the Tech sector is unsurprisingly one of the most expensive – currently trading at 17.2x FY1 EV/EBIT and 23.8x FY1 P/E, versus 15.0x and 18.5x respectively for the wider market. Despite valuations appearing high, we believe there are value opportunities. For example, Proactis* features in finnCap’s QVGM+ portfolio (ranked 17/462) – the company offers attractive organic and inorganic growth, with earnings forecast to grow by 26% CAGR over the next two years, but despite this, only trades on 15x FY1 earnings and offers 8% FCF yield in FY2.

Companies: 7DIG ALT AMO ARTA BOTB BLTG CTP CITY D4T4 DTC DOTD ELCO ESG FDEV GBG IDEA IDOX IMTK IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET PHD QTX QXT RCN 932 SSY SEE SIM SPE SRT STR TAP TAX TEP TPOP TRAK UNG VIP ZOO CYAN ONEV

05 Jan 18

Update on 2017 trading; downgrades to estimates

Ethernity published a Trading Update this morning, highlighting key developments from H2’17 (6m to Dec’17). There are two important points to note: (1) a large licensing deal with an existing customer was modified from a design license to FPGAs, shifting an upfront payment expected in ’17 into revenues from ’19 onward; and (2) customers delayed purchases under two existing contracts, postponing the supply of products from ‘17 into ‘18.

Companies: Ethernity Networks

16 Mar 18

Top-line growth set to drive margin expansion

Spirent’s results last week showed good traction from the group’s strategic growth areas (Lifecycle Service Assurance and Application Security), which combined with effective cost control, resulted in strong earnings growth and excellent cash generation. The group remains heavily H2 weighted, but we believe it is well placed to deliver a long awaited return to top-line growth going forwards. With gross margins remaining strong and management maintaining a tight grip on costs, we expect the growth to result in continued margin expansion across our forecast period. We make significant upgrades to all forecast years and increase our target price to 139p. Buy.

Companies: Spirent Communications

12 Jun 18

Prelims and opportunity

As revealed at the February trading update and subsequently reiterated, KCOM prelims delivered EBITDA slightly ahead of expectations (+8% vs fC) from revenue slightly behind (-4% vs fC). The 6p dividend was confirmed and reiterated for a further year, while net debt outperformed expectations, benefiting from £11.6m free cash in-flow compared with our £6m forecast outflow. Specific Enterprise issues highlighted at interims included complex cloud software contracts precipitated losses, which in addition to a slow-down in government spend removed Enterprise’s growth in the period – however, margins turned positive in 2H. Prospects in Hull and East Yorkshire (H&EY) continue to be driven by fibre and remain bright, with more customers now taking broadband over fibre than copper, with genuine fibre to the home unlike BT’s half-hearted fibre to the cabinet. With board changes in progress (CEO and CFO) but board confidence evident in the maintenance of the 6p dividend, we look forward to recovery in the long-troubled Enterprise division, where underlying value remains the diamond in the rough. Target 120p based on dividend yield, with free cash flow set to strongly improve post-completion of the Hull & East Yorkshire fibre roll-out.

Companies: KCOM Group

19 Jun 18

Slow uptake hits FY17A; moving to No Rating

Ethernity reported FY17A revenues of US$1.52m, -30% YoY. The decline was attributed to significant customers either reducing or changing the nature of their business with Ethernity, and the slippage of Ethernity’s customers’ clients’ purchasing decisions (i.e. one step removed and outside the scope of the group’s control). Altogether, the impact was c.US$1.5m, partially offset by three new contracts secured in FY17A. Revenues undershot Arden estimates by 29%, primarily due to the reversal of a US$225k contract and others totalling a further c.US$270k.

Companies: Ethernity Networks

12 Oct 18

MTI Wireless Edge Ltd to benefit from strong growth dynamics

21 May 18

CyanConnode - Significant Order

01 Dec 17

Capital Network's Ed Stacey on Gamma Communications Plc

21 May 18

CyanConnode - 2017 Full Year Results

31 May 18

Ed Stacey on MTI Wireless Edge

20 Sep 17

CyanConnode - $29m new purchase order for smart metering in the Ukraine

30 Jan 18

Filtronic - Company Overview

15 Sep 17

CyanConnode – Fundraise and Shareholder Update

11 Sep 18

CyanConnode - Interim Results 2018

15 Aug 17

CyanConnode - $10M follow-on order

01 May 18

Adept (ADT) presentation at Mello Derby 2018

13 Jul 17

CyanConnode - Trading Update

22 Jul 16

Cyan Holdings - Analyst interviews, Beaufort Securities

06 Jul 17

CyanConnode Holdings PLC - New $1.1m purchase order from India

14 Jun 16

Cyan Holdings - Acquisition and Fund Raising

Latest Content

KCOM MAI ZAM

Morning Note – 21 November 2018

KCOM (KCOM): Corp Trading update | Maintel (MAI): Corp Trading update | Zambeef (ZAM): Corp Firing on all cylinders

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21 Nov 18
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CZN ALGW IRR JDG ENET GAL UBI OPM EUSP SENS

Small Cap Feast

Kropz, an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa, a phosphate project in the Republic of Congo and exploration assets in Ghana, is looking to join AIM. Offer TBC, expected late Nov Titon holdings—international manufacturer and supplier of ventilation systems and window and door hardware. No capital raise. Due 10 Dec. Mkt cap c.£22m. 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 early December. Finncap—proposed acquisition of M&A adviser Cavendish Corporate Finance and AIM admission. Offer TBA. Due early Dec Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is investigating the possibility of AIM admission. The Company is proposing to raise up to £2.25 million before the end of December, conditional on Admission. The Panoply parent company of a digitally native technology services group founded in 2016 with the aim of identifying and acquiring best-of-breed specialist information technology and innovation consulting businesses across Europe, is looking to join AIM. Offer TBC, expected late November 2018.

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21 Nov 18
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MTI Wireless Edge

Enlarged group on track

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19 Nov 18
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MTI Wireless Edge Character Group

TMT Update 19.11.18 (MWE.L, CCT.L)

MTI Wireless Edge Ltd* (MWE.L, 17p/£14.8m) Q3 results - Enlarged group on track (19.11.18) | The Character Group plc* (CCT.L, 496p/£104.9m) Products feature again in influential Xmas guide (15.11.18)

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19 Nov 18
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Vodafone Group

Vodafone maintains its dividend

Following a correct H1 release from an operational viewpoint, management has announced it intends to propose a total dividend of €0.1507 per share for 2018/19, stable yoy. So, we still do not see a case for a cut in the dividend for 2018/19 or 2019/20. This is why we are sticking with our Buy opinion.

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13 Nov 18
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POLX ADL EVRH FEN CHRT OMIP CRU TRX SAR AFHP

Small Cap Feast

Kropz, an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa, a phosphate project in the Republic of Congo and exploration assets in Ghana, is looking to join AIM. Offer TBC, expected late Nov Titon holdings—international manufacturer and supplier of ventilation systems and window and door hardware. No capital raise. Due 10 Dec. Mkt cap c.£22m. 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 Finncap—proposed acquisition of M&A adviser Cavendish Corporate Finance and AIM admission. Offer TBA Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is investigating the possibility of AIM admission. The Company is proposing to raise up to £2.25 million before the end of December, conditional on Admission.

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13 Nov 18
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Telecom Italia

Not suffering so much from the entry of Iliad on mobile

No surprises in Q3 (except for a goodwill write-down of €2bn). The group still has an attractive strategic plan for the coming years. Although domestic service revenues are expected to remain broadly stable over the life of the plan, domestic’s EBITDA should, however, slightly grow. We maintain our Buy on the stock which is still, however, a proxy of the Italian flag and whose governance is a real mess with a useless and unnecessary fight between Bolloré and Elliott.

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09 Nov 18
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SO4 FJET EME PREM MOS HAYD GOR FUM SUH FLOW

Small Cap Feast

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 Wentworth Resources— oil and gas exploration and production company, with assets in the onshore Rovuma Basin of East Africa. Introduction only. Mkt Cap c £50m . Due today Finncap—proposed acquisition of M&A adviser Cavendish Corporate Finance and AIM admission. Offer TBA Kropz PLC—an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa, a phosphate project in the Republic of Congo and exploration assets in Ghana. Looking to join AIM, offer TBC, market cap TBC. Due Late October. Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is investigating the possibility of AIM admission. The Company is proposing to raise up to £2.25 million before the end of December, conditional on Admission. The Panoply parent company of a digitally native technology services group founded in 2016 with the aim of identifying and acquiring best-of-breed specialist information technology and innovation consulting businesses across Europe, is looking to join AIM. Offer TBC, expected late November 2018.

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09 Nov 18
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Deutsche Telekom

An acceleration in revenue and EBITDA growth thanks to the... US

Good set of results for DT in Q3. With a dividend yield of 4.8%, DT is, however, one of the top of the class in its sector along with Orange, Swisscom or Elisa. The only worrying issue is on the TV side. After its deal with Liberty, Vodafone should be able to offer TV and ultrafast broadband services to 25m German homes, while DT lags in its ftth deployment. But it should win market shares at the expense of satellite operators.

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08 Nov 18
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Inmarsat

Disappointing on the Maritime side, but bright perspectives from Aviation

Inmarsat published this morning its Q3 results. Group revenues (excluding Ligado) were up 3.9% yoy to $336.4m, driven by Aviation. This was in line with the consensus. The strong growth in Aviation (+34%) is, however, overshadowed by a disappointing decline in Maritime (-5.7%). EBITDA was up 7.9% yoy to $173.6m, with an EBITDA margin of 55.9% (vs. 54.3%. Q3 17), driven by a strong EBITDA performance in Aviation and lower Central Services costs. This came in largely above consensus which expected €152m (excluding Ligado). Revenue and EBITDA for FY18 are now expected to be at least in line with current market consensus of $1.325m and $610m, respectively. The medium-term guidance was left unchanged.

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