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.

08 Sep 20

Resilience, growth and opportunity

Gamma has delivered this morning another strong set of results for H1 to June. Despite the COVID-19 challenges, the business has grown organically, and the acquisition programme is delivering well on its promise of European expansion. The group is positioned well to build revenues on and around Microsoft Teams, which is clearly benefiting from the work-from-home trend. We raise our profit estimates for all three forecast years as a sign of confidence in ongoing growth and look forward to further strong performance (and potentially even further M&A) into H2 and beyond.

Companies: Gamma Communications Plc

03 Oct 18

Discontinuing coverage

Coverage of the equity securities of the following companies has been discontinued. Investors should no longer rely upon our previously published reports, valuation theses or estimates.

Companies: Ace Liberty & Stone Toople Plc

02 Mar 16

The Joy of Techs

Against the backdrop of a slowdown in smartphone and tablet sales, handset makers are struggling with commoditisation and turning to accessories like VR headsets, wearables, bots and drones to gain market share.

Companies: ARM SPT IMG AMO IGP BGO EGS VIP WJA

21 Oct 19

Quarterly Research Outlook Autumn 2019

Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.

Companies: ABBY AMS ANX ARS ATYM AVON BLVN PIER BUR CGS CAML CDM CSRT TIDE CYAN JET2 DEMG ELM EMR FPO FDEV GTLY GENL GHH GRI GEEC GKP HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KAPE KEYS KWS KCT KGH LAM LIT LOK MACF MANO MOD OXIG PCA PANR APP SRE PHC PMO RBW RMM RBGP REDD RSW RNO ROR SUS SCPA SEN SHG SOLG SOM SUMO TM17 INCE TWD TRAK TRI VNET VTC ZOO ZTF

26 Mar 20

Strong FY19 results reflect a robust investment case

Bigblu Broadband (BBB) has reported a strong set of FY19 results that demonstrate strong organic growth, and are in line to ahead of the previous consensus estimates. This establishes a strong foundation for BBB’s future growth, and we expect that BBB will see revenue, EBITDA, and EPS growth in FY20 and FY21 despite the uncertainty caused by Coronavirus. This reflects that BBB has a robust and resilient investment case, which we explain in depth in this report. We consequently believe that BBB is undervalued on 12m fwd multiples of 5x EV/EBITDA and 7x adj P/E, and initiate with a TP of 155p or 15x FY21 adj EPS.

Companies: Bigblu Broadband Plc

02 Jul 20

Strategically important acquisition in Germany

Gamma is acquiring around 80% of HFO Holding AG (HFO), one of the leading SIP Trunk providers in Germany, for an initial consideration of €20.4m in cash with an option to purchase the remaining shares over the next three years. In line with its stated strategy, Gamma can invest and use its commercial strength and expertise to accelerate HFO’s growth and replicate the Group’s success in the UK by developing a market leading position in Germany. Noting net debt of €2.9m when the deal closed, the implied historical EV/EBITDA multiple of about 10x compares with Gamma’s equivalent of 18.7x. We estimate that the deal will be 4% earnings enhancing in the first full year of ownership and our estimate upgrades reflect that. The European markets for cloud telephony in which Gamma is now represented will ultimately overtake the UK in size, providing Gamma with significant future growth potential. We view this acquisition as another significant step in Gamma’s strategic aim to expand into Europe via exposure to another lucrative market opportunity.

Companies: Gamma Communications Plc

20 Jul 20

Strategic delivery continues

Gamma’s performance continues to speak for itself. The positive trading update for H1 20 reflects a similar tone to that of its recent AGM statement, containing an acknowledgement of the current operating environment while reporting a good performance for the six months. A high rate of recurring revenue, ‘minimal’ contract cancellations and no increase in bad debts remain key features. It was a busy first half with continued demand (albeit COVID-19 affected in Q2) for Cloud PBX and UCaaS (Unified Communications as a Service) products in the UK. Acquisitions in Spain and the UK were swiftly followed by the HFO deal in Germany in early July and the purchase of GnTel in the Netherlands last week. Management expects that EBITDA and EPS will be ahead of consensus for the year. We note the strong momentum in the business but, as we are at the upper end of the consensus range, we leave our estimates unchanged at present.

Companies: Gamma Communications Plc

24 Jul 20

An expected resilience to the COVID-19 negative impacts in Q1

An expected resilience to the COVID-19 negative impacts in Q1. The group can indeed congratulate itself on having strengthened in recent years its fixed activities: in Germany, which represents 40% of Vodafone’s activities in Europe, service revenues were flat yoy in Q1. The monetisation of its infrastructure assets is continuing and, given the slight growth that the group could offer in the coming years, we maintain our Buy on the stock.

Companies: Vodafone Group Plc

30 Jul 20

Still a double penalty for Telefonica

A poor Q2 performance for Telefonica although this had been expected given, in particular, the double penalty linked to the South American currency weakness vs the Euro (in particular the Brazilain Real) during the pandemic. For 2020 Telefónica nonetheless remains on track to deliver a slightly negative to flat EBITDA-capex yoy in organic terms but… at constant currency. The key point thus remains that the 2020 dividend is confirmed at €0.40.

Companies: Telefónica SA

24 Aug 20

Revenue growth and EBIT margin appreciation

Good H1 performance from the provider of communications and radio frequency solutions given the global backdrop with revenue growth in all three divisions (Antenna, Mottech and Distribution) and overall growth of 3% to $19.6m. Operating profit increased significantly (+28% to $1.9m) with EBIT margin +190bps, reflecting operating leverage and cost savings. Strong cash conversion resulted in net cash of $7.6m (H1 FY19: $5.0m), post April’s final dividend payment ($1.8m). MTI’s diversified business (sector and geography) has provided some protection against COVID-19 as different countries have entered/emerged from lockdown as evidenced by recent Mottech contract wins in China. Management’s confidence in the outlook is underpinned by order book strength and MTI is currently on track to meet our FY20 profitability expectations. Forecasts and 46p/share fair value, equivalent to 13x FY21 EPS, remain unchanged.

Companies: MTI Wireless Edge Ltd.

24 Aug 20

Allenby Capital TMT Update - 24.08.20 - MWE.L, BIRD.L, GFIN.L, STAR.L

MTI Wireless Edge Ltd* (MWE.L, 37p/£32.5m) | Blackbird plc* (BIRD.L, 17.2p/£58.0m) | Gfinity plc* (GFIN.L, 3.8p/£29.0m) | Starcom plc* (STAR.L, 1.0p/£3.5m)

Companies: MWE BIRD GFIN STAR

26 Aug 20

Pebble Beach Systems - Interims to June

Pebble Beach Systems has reported interims to June 2020, reflective of the global challenges posed by COVID-19. Revenue declined 20% to £4.5m (1H19: £5.6m) as prospective customers cautiously delayed large-scale broadcast infrastructure projects in the immediate term. This masked robust performance in SLA contract renewals, increasing to 42% of group revenue from 31% YoY (£1.9m; 1H19: £1.9m), delivering a greater proportion of recurring business during the period. Whilst cognisant of the potential impacts of COVID in H2, the board remains focused on maintaining its market-leading position through ongoing innovation, and optimising the business through leveraging cost efficiencies and de-gearing the debt balance. The group enters H2 with a strong order backlog (£4.1m) and a growing pipeline, underpinned by recurring SLA renewals, leaving the board confident on the outlook for FY20.

Companies: Pebble Beach Systems Group Plc

09 Sep 20

FY 2020 results in line with April update

Today’s results for YE March 2020, are somewhat historic having been flagged by the trading update back in April. However, they do reflect the impact that COVID-19 has had on international business, as well as actions SRT has taken to secure its future. Lockdowns put a hold on existing and new system projects, causing a delay in both revenues and expected contract signings during the final months of FY 2020 through H1 2021. Also, we highlight that SRT has prudently impaired an existing long-standing contract for a monitoring system in the Middle East to clear the decks for a new larger contract that includes both monitoring system and transceivers. Existing Systems contracts are again under way, with £8.5m received on deliveries, and negotiations have restarted on the expected new contracts. Meanwhile, the Transceivers business grew by 24% in the FY 2020, and surprisingly, is reported to be trading marginally ahead of last year in FY 2021 to date despite COVID restrictions.

Companies: SRT Marine Systems Plc

14 Sep 20

Allenby Capital TMT Update - 14.09.20 - CPX.L, GFIN.L, NWT.L, MWE.L

CAP-XX Ltd* (CPX.L, 4.5p/£19.9m) | Gfinity plc* (GFIN.L, 3.8p/£28.9m) | MTI Wireless Edge Ltd* (MWE.L, 44p/£38.7m) | Newmark Security plc* (NWT.L, 1.175p/£5.5m)

Companies: CPX GFIN MWE NWT

21 Sep 20

Storming the Polish market?

Iliad announced this morning it has agreed to buy Polish telco Play for €2.2bn. This operation seems fundamentally relevant for a group which wants to diversify outside France by seeking growth in Europe and the price paid is indeed correct. However, this acquisition will lead to a net debt of €10.4bn for Iliad (corresponding to 3.5x annual EBITDA) which could penalise it on the stock market. We maintain our opinion at Reduce with a slight 8% downside.

Companies: Iliad SA

07 Jan 20

First commercial order for BATM

26 Aug 20

AAC Clyde Space/Saab/ORBCOMM - executive interview

27 Sep 19

AdEPT Technology making good progress on its 'One AdEPT' project

17 Aug 20

BATM Advanced Communications to reinstate dividend as it expects big jump in full year earnings

09 Sep 20

SRT Marine Systems plans to 'peddle on' with core technology for the maritime industry

06 Aug 20

BATM Advanced Communications hails successful proof-of-concept trial with Vodafone

22 Apr 20

BATM Advanced Communications secures significant order for 1,000 critical care ventilators

30 Jul 20

SigmaRoc's Max Vermorken reports strong earnings and revenue growth in first half

24 Mar 20

CyanConnode - Follow-on Order for Smart Metering in Thailand

15 Jul 20

BATM's Zvi Marom expects 'substantial revenue' from its three new diagnostic kits

09 Sep 20

SRT Marine Systems plans to 'pedal on' with core technology for the maritime industry

26 Jun 20

BATM Advanced Communications 'overwhelmed by demand' for its coronavirus tests

09 Sep 20

CyanConnode Holdings - Announcement of Smart Metering Project in India

09 Jun 20

SigmaRoc PLC has been trading profitably each month of this year-to-date

19 May 20

MTI Wireless Edge Ltd - Interview with CEO Moni Borovitz

Latest Content

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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Storming the Polish market?

Iliad SA

21 Sep 20
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New NRA signed, but PIK refinancing still key

New roaming (NRA) signed with Telia with effect from 1 January 2021 The agreement is expected as the current with Telia expires in 2021 Reflected in our estimates as in-line with Market-15 regulation Refinancing of PIK debt is crucial for the equity case and our view on ICE

Ice Group ASA

18 Sep 20
-

Morning Note – 15 September 2020

AVG MAI PPC EVG BGO EVE ELIX

15 Sep 20
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Interims

Interims are in line with the guideline full-year performance we quantified at the time of the June prelims –£5m of EBITDA and £5.3m of free cash flow derived from £53m revenue, with guidance of consistent performance in 2H20. We reintroduce forecasts for FY20, £9.5m EBITDA from £105m revenue, as 3Q sees the re-invigoration of projects postponed through COVID-19 and the opportunity for recovery into 2H20 and FY21, on top of £3m annualised cost savings. Cloud & software grew to 25% of group revenue; recurring revenue is at 74%; and new CEO Ioan MacRae’s measures to deliver efficiency and growth will increasingly bear fruit in 2H20 and FY21. Even if you think our 600p (11.5x a depressed level of EBITDA) target is wrong, the current share price is more so, with a current FY20 P/E of 6.0x and EV/EBITDA of 5.6x, and 1H proof of credible FY forecasts.

Maintel Holdings Plc

15 Sep 20
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Kleos Space on a mission to operate multiple data absorbing satellites

Kleos Space SA

14 Sep 20

Allenby Capital TMT Update - 14.09.20 - CPX.L, GFIN.L, NWT.L, MWE.L

CAP-XX Ltd* (CPX.L, 4.5p/£19.9m) | Gfinity plc* (GFIN.L, 3.8p/£28.9m) | MTI Wireless Edge Ltd* (MWE.L, 44p/£38.7m) | Newmark Security plc* (NWT.L, 1.175p/£5.5m)

CPX GFIN MWE NWT