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Best Research Award
Edison Investment Research runner up or winners 2006, 2007 & 2008
| Date | Reports available | Download |
|---|---|---|
| Jul 03 2009 |
Check strategic health Assura has reported full year results and reported on its progress in undertaking a strategic transition that will take several years to come to fruition. The move from a £354m asset property business with £22m rental income to an NHS primary care service provider is not straightforward. The GP provider company (GPCo) model has given 55 actual or potential contracts. Pharmacy will grow from 38 to 42 stores and could become profitable in this financial year. However, NHS services run on narrow, volume-dependant margins and Assura has high overheads: £7m for medical and £11m for pharmacy. The shares are at a discount to the 67p NAV. Research type: QuickView - Final results |
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| Jul 03 2009 |
The catalyst arrives Byotrol featured on the front page of last Saturday’s The Daily Telegraph newspaper, which highlighted the successful results from an 11-month trial of Byotrol’s products at Manchester Royal Infirmary. As we stated in our Update note of January, a catalyst such as successful trial results could cause Byotrol’s share price to rally. The shares closed on Monday up 103% at 28.5p. They have sold off slightly today to 24.5p which still represents an upside of 74% from Friday’s close. With further trial results to come, potential NHS orders and the prospect of over a dozen more hospitals in the US experimenting with Byotrol’s products, we believe any short-term weakness in the share price from profit taking will yield to longer-term value creation as orders are realised. Research type: Flash note - Trading update |
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| Jul 02 2009 |
Renaissance Minster’s investment case hinges on its ability to capture value though a licensing deal for tonabersat – probably for migraine with aura – and/or sabcomeline for cognitive impairment associated with schizophrenia. If successful, this would transform Minster and turn it into a vehicle able to acquire, develop and out-license pharmaceutical R&D programmes in CNS and other therapy areas. The shares currently trade below cash value, reflecting the market’s loss of confidence following the failure of the TEMPUS study, although this seems unduly harsh. Research type: Review - Initiation of coverage |
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| Jul 02 2009 |
A growing production base Faroe recently announced its entry into the Barents Sea with a new licence operated by BG and an asset swap in Norway which gives it an additional 800bbl/d of production. With seven committed and fully funded wells over the next two years, there is potential for substantial share price appreciation over the next 18 months. Research type: Update - Licensing update |
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| Jul 02 2009 |
Cost benefits come in An indication that profits are “comfortably above expectations” in H1 confirms the positive trends seen since the beginning of the year on the cost side of the equation. With a fairly stable volume outlook we are raising our forecasts modestly. Such evidence of improvement in profit and cash argues strongly for a much better rating. Research type: Update - Pre-close trading update |
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| Jul 02 2009 |
Falling market Hallin yesterday announced that increased competition has caused a narrowing of margins and lower utilisation rates for non-specialist assets. None of Hallin’s orders have been deferred or cancelled, but order books have been slower to build up than anticipated and demand for engineering services has been muted. We are cutting our 2009 forecast revenues by $23m (15%) and underlying EBIT by $5.7m (22%). We release our 2010 numbers with profits returning to growth (4% operating profit y-o-y) as older assets are replaced by newer higher margin assets which are still seeing strong demand. Research type: Update - Trading update |
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| Jul 02 2009 |
Challenging background It is still too early to look for signs of recovery in recruitment markets and sector estimates continue to be pared back. We have adjusted our Empresaria forecasts to reflect a wider range of potential outcomes. The low end of the range assumes no significant improvement in permanent placements in 2009 and continued pressure on margins. However, the group’s geographically and sectorially diversified portfolio and its greater exposure to temporary placements make it comparatively attractive. Research type: Outlook - AGM statement |
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| Jul 01 2009 |
Military focus At analyst meetings in London Protonex continues to demonstrate its technology. Management communicated that the potential development contract pipeline is the best it has ever been with unit sales discussions continuing for all products. The company believes that initial orders of its M250-CX military system could come as early as next year when the RV-focused lower-cost consumer version, the M250-B, should also come to market. Given continued slow contract movement due to the change in government and the moving back of the M205-B launch by a year, we have marginally reduced our 2010 revenues and expect Protonex to raise funds within the next year. Research type: Update - Interim results |
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| Jul 01 2009 |
Further radio win Sarantel has announced that Harris Corporation, a leading global supplier of secure radio communication systems for military, government and commercial organisations, has selected Sarantel’s LBS Pro miniature GPS antenna for the new Unity XG-100 portable multiband public safety radio. Research type: Flash note - Contract win |
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| Jul 01 2009 |
Wins outpace revenues While some order slippage was perhaps inevitable – and we have adjusted numbers accordingly – K3 has continued to benefit from new order wins during H1. Combined with strong levels of recurring income, this highlights the resilience of the business model. Cash flow remains robust and forecast year end net debt in FY09 is expected to come in below £9m (£13m FY08). Research type: Update - Trading update |
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| Jun 30 2009 |
NVA237 into Phase III Novartis has begun a Phase III trial of one of Vectura’s key products, NVA237, for chronic obstructive pulmonary disease, triggering a $7.5m milestone payment to Vectura. NVA237 (glycopyrronium) could become the second long-acting antimuscarinic to reach the COPD market, after Boehringer Ingelheim/Pfizer’s blockbuster Spiriva (tiotropium), and Vectura expects Novartis to make a regulatory filing for NVA237 in calendar 2011. Research type: Update - Start of Phase III trial of key product |
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| Jun 30 2009 |
Targeted profit Communisis is benefiting from the trend to more targeted direct mail, which is much more profitable than mass-mailing, and from the convergence between transactional and marketing communication, which requires an integrated service. This should counter the effect of heavy financial services exposure by giving resilience to 2009 earnings and a resumption of growth thereafter. Historically low net debt allows the funding of large high-margin contracts and pension concerns. Research type: QuickView - Investor seminar |
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| Jun 30 2009 |
A new Vernalis emerges A simplified and slimmed-down business led by a new senior management team, with near-term news flow expected on clinical trials and/or partnering activity, underlines the investment case for Vernalis. A £22m fund-raising has given the restructured company sufficient cash to fund the next two years of operations – even excluding expected milestone payments from licensees. Research type: Outlook - Initiation of coverage |
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| Jun 26 2009 |
Delivering on the strategy In just two years E1 has successfully built a large international entertainment content and distribution business. Its scale and financial strength bring competitive advantages in its core markets. 2008/09 normalised EPS grew by 12.5% despite tough trading in the US. The current high level of content investment depresses short-term margins but underpins strong medium-term organic growth forecasts, which are likely to be augmented by complementary acquisitions. As E1 continues to deliver there is scope for a significant improvement in the share rating. Research type: Review - Full year results |
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| Jun 26 2009 |
Resilient growth Record annual results for Micro Focus at the top end of market expectations confirmed solid underlying growth and the successful integration of recent acquisitions. After the recent share price appreciation, earnings based multiples have expanded, albeit the long-term prospects and counter cyclical features still make for a sound investment case. Research type: QuickView - Final results |
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| Jun 26 2009 |
A big overhaul Trifast had reached a low point in early 2009 and profit, as expected, fell sharply in the year to March 2009. A new management team installed in March has embarked on a programme to rebuild the company through a series of measures, which should better position Trifast to benefit from eventual economic recovery, although 2010 remains challenging. Research type: Update - Preliminary results |
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| Jun 26 2009 |
Cautious optimism While management is beginning to sense renewed interest in the traditional software business, purchases have been small and we have yet to see a revival in any major orders. However, WorkPlace has been seeing a healthy interest in its new SaaS product – WorkPlace OnLine. This web-based application has generated encouraging demand, with mid-sized business such as multi-format stores and security firms buying the service. Research type: Review - Final results |
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| Jun 25 2009 |
Down but not out The sinking of Titanium Resources Group’s (TRG) second dredge (D2) in July last year has delayed the company’s ambitious expansion plans. While an undisclosed portion of the D2 insurance claim has already been paid out, the final payout, if any, remains outstanding. Nevertheless, TRG continues to mine with its primary dredge (D1) and is focused on reducing costs with the introduction of a new heavy fuel oil (HFO) power station as well as a reduction in employee numbers. Provided there is a significant reduction in the cost base and production from D2 is restarted, the business should return to profitability. However, TRG may need to refinance the $45.1m owed to the government of Sierra Leone. Research type: QuickView - Site visit |
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| Jun 25 2009 |
Focus on profitability Celsis specialises in providing diagnostic products and laboratory services to the pharma and consumer products industries, and its business has proved relatively resistant to recent market turbulence. A restructuring has eliminated a loss-making division and placed Celsis in a strong position to address higher-margin products, especially as customers’ internal R&D budgets come under pressure. Research type: Outlook - Final results |
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| Jun 25 2009 |
New data on LifePort Data presented at the recent American Transplant Congress show Lifeline’s LifePort device to be superior to traditional cold-storage in the transplantation of kidneys from non-heart-beating donors and donors older than 65, groups whose organs are normally considered unsuitable for transplantation. The data should help drive adoption of the LifePort device and may help extend the pool of donor organs. We maintain our financial forecasts and expect Lifeline to reach profitability in 2009. Research type: Update - Research update |
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| Jun 25 2009 |
Media sales drive growth Today i-design announced its FY09 interim results in line with our expectations. Encouragingly media sales revenues rose 72% in a difficult advertising environment. As foreshadowed in the company’s trading update, management are not currently expecting revenue from new atmAd licences in the second half of FY09 due to the prevailing conditions in the banking sector. Nevertheless, we believe that i-design’s business model remains intact, with the benefit of £1.7m net cash at 30 April 2009. Research type: Update - Interim results |
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| Jun 24 2009 |
Q1 trading in line First Derivatives (FD) has released a brief trading statement in conjunction with its Annual General Meeting stating that Q1 trading has been in line with expectations and that growth trends identified in the 2009 annual report are continuing. The statement adds confidence for investors and underpins our FY10 forecasts. FD has established a healthy track record and, while we expect FY10 to be a year of consolidation, in our view it remains well placed to continue on this growth path. Research type: Update - AGM statement |
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| Jun 23 2009 |
Supply chain issues hit results In its full year results to December 2008, GMA today reported a loss of 1.81p compared with our expectation of a loss of 1.98p. Much of this loss can be attributed to the failure of the company’s supply chain in 2008. However, assuming that this can be overcome, we estimate that the company is capable of generating long-term earnings over a 10-year mine life of approximately 1p per share and paying a dividend of 1.3p per share (assuming all convertible stock is converted into equity). Research type: Update - Full year results |
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| Jun 23 2009 |
Rights to first gas in Equatorial Guinea Gasol today announced that through its joint venture with SONAGAS, the national gas company of Equatorial Guinea, it has obtained rights to its first gas assets in block B (Zafiro development) in Equatorial Guinea. There is no upfront payment by Gasol; AFGAS (Gasol’s majority shareholder) has assigned its shareholding and rights in SONAF to Gasol under an agreement signed recently. The company estimates total revenue of $1.8bn from the project at a cost of around $500m. Research type: Flash note - Joint venture |
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| Jun 22 2009 |
Military offensive Not only is consumer OEM interest in Sarantel’s technology accelerating but recent military orders highlight the group’s unique antennas’ performance and also the potential to scale higher revenues into FY10. In our view, visibility of reaching cash flow break-even is improving significantly. Research type: Update - Product shipments |
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| Jun 19 2009 |
Interim results Interim results are fairly academic given the recent sale of Anix, the group’s core managed services and hardware asset. Management has a successful track record of rolling up IT service companies and the group is left with the scalable Storage Fusion software business and around £20m of cash to support a future similar strategy. The decision to sell Anix has delivered nearly a 40% IRR for shareholders and importantly reflects management's view of the current very attractive acquisition opportunities. Research type: Update - Interim results |
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| Jun 19 2009 |
Riding the storm Yesterday, Carnival reported its Q2 results with diluted EPS of $0.33 slightly ahead of consensus estimates of $0.30, though considerably lower than $0.49 achieved in Q2 last year. While EPS guidance for Q3 and FY09 has been tweaked down marginally to a range of $2.00-2.10, management says that cruise pricing and yields are starting to improve. Overall the group appears to be riding out, in good shape, the economic storm and the swine flu squall. The impact of the latter remains around 10 cents for the full year. Access to capital in difficult credit markets continues favourably with a further $1.7bn completed since the end of Q1. Research type: QuickView - Q2 results |
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| Jun 17 2009 |
Awaiting orders Unchanged revenue figures reflect a balance between delayed customer product introductions and ongoing business development. With finance secured until a long way into 2010 and a number of potentially exciting test results due over the coming 12 months, £9m seems a small market capitalisation in relation to the potential Research type: Update - Full year results |
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| Jun 17 2009 |
A good combination – income & growth In 2007 when Farepak went into receivership, it caused havoc in the multi-redemption voucher industry as confidence and security collapsed. In response, Park Group produced extra safeguards by creating the Park Prepayments Trustee Company Limited to segregate customer prepayments from the group’s funds. In 2009 the group’s customer recruitment campaign was its most successful ever. Park Group’s balance sheet is free of bank borrowing, it has a cash balance of over £12m, and this enabled management to maintain a progressive dividend policy and continue to grow its core division’s revenues. Research type: QuickView - Full year results |
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| Jun 16 2009 |
Biotech and pharmaceuticals outlook remains positive Against a backdrop of difficult conditions in global equity markets, Finsbury Worldwide Pharmaceutical Trust PLC (FWP) has put in a respectable performance during the past 12 months. FWP has added value in absolute terms, grown its dividend by 67% and increased revenue reserves, after payment, from 0.37 to 1.2 times the dividend. During the year, FWP has outperformed its benchmark in terms of both price and NAV. It is the only UK-registered investment trust to offer a diversified exposure to both the pharmaceutical and biotech sectors. Research type: Investment Trust Review - Full year results |
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| Jun 16 2009 |
Positive first half Globo has confirmed that H1 trading has been resilient and the focus on cash collection has been successful. Our forecasts remain unchanged. With ambitious plans in Southern Europe, and innovative and global business models outside of Greece, Globo provides an interesting opportunity for investors wanting exposure to a high-growth technology business. The shares have scope to be re-rated back to 12-month highs with upside from the potential major opportunity for CitronGO! Research type: Update - Pre-AGM trading statement |
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| Jun 15 2009 |
Regional dichotomy The H109 trading update revealed poor sales in the Americas, although a sequential pick up in Q2 combined with an “encouraging” forward sales pipeline suggest a recovery is already underway. Elsewhere, the group saw growth in its European business in H109 in terms of units and revenues, driven by IPTV deployments in the Nordics and East Europe, and cost reductions are ahead of plan. Looking ahead, the global IPTV subscriber base is set for strong growth driven by the continued rollout of high-definition services over broadband networks. Research type: Update - Trading update |
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| Jun 11 2009 |
Shareholding clarification New FSA disclosure legislation requires that, from the 1 June 2009, any potential shareholding through financial instruments such as convertibles and warrants are disclosed if they cross the 3% ownership threshold. Yesterday, convertible holders in Accident Exchange who potentially hold more than 3% of the company’s share capital started to disclose their positions. Research type: Flash note - Shareholding clarification |
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| Jun 10 2009 |
Flutiform review question Having conducted a preliminary review of the regulatory filing for Flutiform, the US FDA has indicated that it might want more information on dosing, as a result of which additional clinical work is likely to be required. However, there is at present insufficient information available as to whether and to what extent this could affect Flutiform’s approval timeline. Timely US launch of Flutiform is key to seizing market share, although its main competitor, Schering-Plough’s MFF258, has yet to be filed. Research type: Update - Research update |
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| Jun 10 2009 |
Regulation still the driver A record set of annual results from Focus with reported figures generally in-line with market expectations. Although not immune from the impact of the wider issues in the financial services market, the overriding need for regulatory compliance continues to be a key driver. The valuation is attractive on a number of levels and there are considerable opportunities for organic and acquisition led growth. Research type: Update - Full year results |
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| Jun 08 2009 |
Expertise & relationships Redhall Group announced interim results with profits up 63%, partly driven by acquisitions. Underlying organic sales growth of 16% added 25% to PBT on cost controls. Redhall is in highly specialised areas of energy and defence, with both macro and specific drivers for its businesses. Acquisitions have increased Redhall’s size, diversified operations and brought in-house expertise that is hard to find elsewhere. These, along with a strong balance sheet and clean track record, have allowed its relationships with the large players to both deepen and broaden. This, in turn, has enabled Redhall to take market share and develop a brand, both of which should lead to margin improvement. We will shortly be initiating full coverage. Research type: QuickView |
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| Jun 08 2009 |
Making good progress Betshop’s recent sponsorship deal with Serie A football team Palermo should further increase its profile in its core southern Italian market. At the same time it is making good progress diversifying its products (poker generated over 25% of Q2 revenue) and its geographies, with growth in Cyprus and Greece. The balance sheet is much improved and the share rating appears very low. Any settlement with the US Department of Justice (DoJ) would remove a major uncertainty, and long-awaited M&A activity within the sector is also expected to enliven multiples. Research type: Update |
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| Jun 08 2009 |
Demerger on track Carphone Warehouse announced results broadly in line with analysts’ expectations. Existing earnings guidance has been reiterated and the main investment theme remains the imminent demerger of the group’s telecom assets which is expected to occur early next year. In our view the demerger will establish two focused businesses with strong and growing positions in their respective markets. Research type: QuickView |
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| Jun 08 2009 |
Digging deeper Rio Tinto’s shares have reacted positively to the announcement of the abandonment of the Chinalco deal and a 21 for 40 fully underwritten rights issue to raise $15.2bn. The subscription price represents a discount of approximately 38% to the theoretical ex-rights price (TERP) of £22.66. In addition Rio has announced its Q109 results and an iron ore JV with BHP Billiton. Research type: QuickView |
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| Jun 08 2009 |
Growing the top line With a broad product portfolio and an extensive marketing network in place, Sinclair’s current focus is to achieve critical mass in product sales. Assuming an annual licensing income of £5m, it needs to add another £5m in product revenue to its 2009 estimated level to reach break-even at the operating profit level. An annual sales growth of 15%, discounted at 12.5%, would yield an NPV of £41m, representing a 30% upside. Research type: Outlook |
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| Jun 05 2009 |
Debt restructured 2009 has been the pinch point for the group’s cash flow since IPO, with the combination of the peak of the acquisition outstanding liability payments and the timing of the repayment of bank debt. The recent announcements of a £1m fund-raising, the renegotiations of vendor and bank payments answer the fundamental question on how the liabilities will be met, albeit at considerable cost. Research type: Update - Trading update |
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| Jun 05 2009 |
Gold fully valued but iron ore for free Peter Hambro Mining (POG or PHM) has delineated a JORC-compliant resource base of 9.6Moz and a Russian one of 19.1Moz (excluding the P2 and P3 resource categories). As its first and hitherto principal operation at Pokrovskiy draws near to the end of its life, the company is in the process of opening new mines at Pioneer and Malomir. Assuming that these proceed according to plan we estimate that POG has the potential to pay a dividend in excess of 45c between 2012 and 2024. Research type: Outlook - Initiation of coverage |
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| Jun 05 2009 |
The first Falklands discovery A new Competent Person’s Report has significantly upgraded the prospectivity of Rockhopper’s exploration acreage in the North Falkland Basin and put clear water between it and its fellow Falkland Islands explorers. The key difference is the re-appraisal of Shell’s 1998 14/5-1A well on the back of extensive technical work undertaken by Rockhopper, leading to the first gas discovery in Falklands waters. Research type: Update - CPR and exploration update |
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| Jun 05 2009 |
Growth on track The interims revealed further growth in line with strategic objectives, with earnings rising on the back of an underlying 2.8% increase in net rents at review. H2 will benefit from two acquisitions post the period end, cost savings and efficiencies, and as gross assets grow, the impact of a lower annual management fee. Our adjusted forecasts expect dividend cover to improve and this will accelerate if the Fund grows in size. The outlook is underpinned by a highly visible income stream from mainly NHS tenants, long-term fixed-rate debt structure and potential for revenue growth driven by inherent shortages of primary healthcare property. An attractive yield and 33% discount to our DCF NAV underpin the shares. Research type: Update - Interim results |
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| Jun 04 2009 |
Second year in profit IS Pharma has reported a net profit for the second consecutive year, on revenue growth of 73%, following the takeover and integration of SEP International last year and Acorus Therapeutics the year before that. The next triggers for the share price include launches of Haemopressin in 14 additional EU countries, followed by the US, and we expect sales of Cryogesic and Aloxi, relaunched in the UK last year having been acquired from Helsinn, to continue growing. Research type: Update - Preliminary results |
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| Jun 04 2009 |
Pleasing Q3 results The 34% increase in Q3 operating profit to £9.8m was ahead of our expectations and puts the group well on course to meet our full year estimates. Strong sports betting results and operating margin improvements remain the key drivers. Despite recent share price strength the rating appears low given the organic growth prospects. In addition, satisfactory settlement with the US Department of Justice could trigger a significant re-rating although the timing and outcome remains uncertain. Research type: Update - Quarterly results |
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| Jun 03 2009 |
Upside potential The issues are clear – debt, currency and civil aerospace. Management is working to offset the downside and smooth the effects. There are few listed exposures to the aerospace cycle in the UK and this has added to the volatility of the share price. Expectations are that the key metrics will remain stable through the current turmoil as management action and currency gains offset the poor fundamentals. Valuation remains low at 5.8x EV/EBITDA, less than 7x forward P/E and a well covered yield of 5.3% leaving scope for recovery as evidence of delivery builds. Research type: QuickView - Company meeting |
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| Jun 03 2009 |
Major iron ore producer Ferrexpo, the operator of the GPL iron ore mine and processing facilities in the Ukraine, experienced a 96% share price fall between 11 June and 21 November 2008, as well-publicised production cuts in the steel industry drove the spot price of iron ore to historically low levels. Although the company’s shares have recovered somewhat since, we estimate that they continue to trade at 14% discount to fair value based on current output. This increases to a discount of 22% in the event that the company is able to complete the brownfield expansion of the GPL mine and further in the event that it upgrades processing facilities and/or successfully develops its Yeristovskoye deposit. Research type: Outlook - Initiation of coverage |
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| Jun 03 2009 |
Back to school Management looks to have struck gold with its move into education travel, a market providing long-term growth and earnings visibility. Yet in group terms for now it would do well to make up for softness in earlier, less rewarding diversification and the maturation of the original camping business. A discount rating reflects a faltering profit outlook and an arguably limited scope to invest in growth because of high indebtedness. Research type: QuickView - Interim results |
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| Jun 03 2009 |
Getting nearer In our view the potential revenue outlook for Sarantel remains very encouraging. Its technology proposition is unmatched, the company’s price offering is increasingly competitive and the market’s need for accurate GPS locational services is accelerating. The issue for us is in the short term is that Sarantel looks under-capitalised to properly target these major opportunities. Research type: Review - Interim results |
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| Jun 02 2009 |
Checking the ID The results update highlighted that trading within the core DataAuthentication business has remained subdued in the first few months of this year. However, GB retains a leading position in this potentially massive market and FY09 numbers demonstrated the operational leverage of the business model. Our forecasts remain unchanged and we show a value for the group around twice the current share price. However, investors are likely to want to see an acceleration in DataAuthentication volumes and possibly a more aggressive approach to group corporate structuring. Research type: Outlook - Full year results |
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| Jun 02 2009 |
Electronic transformation Acal is transforming under a new management team, headed by CEO Nick Jefferies, who was appointed in November. Mr Jefferies has developed a strategy to shift the business into higher margin specialist distribution markets utilising the group’s existing structure and using its significant cash resources to make acquisitions to speed the process. In our view, if the plan is successful, there are substantial gains to be had for investors, given the current modest valuation. Research type: QuickView - Full year results |
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| Jun 02 2009 |
ASCO data lend weight At ASCO yesterday, Biocon presented the findings of a study of nimotuzumab, YM BioSciences’ lead project, demonstrating efficacy in line with that seen historically with cetuximab but with a far cleaner side-effect profile. The researchers believe this to be the first trial in head and neck cancer to challenge the concept that EGFr inhibitor activity cannot be dissociated from serious toxicities. The findings lend weight to the perception of nimotuzumab as a potential best-in-class anticancer. Research type: Update - Study findings |
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| Jun 02 2009 |
Weathering the strom After a solid 2008, which generated a TRY44.7m net profit (up 16.5% y-o-y despite the global financial turmoil), Is Yatirim produced a strong set of Q1 numbers, with net profits at TRY10.03m. IsY has maintained its leading market share in equities and derivatives trading, In addition it remains at the forefront of the development of the pension fund industry in Turkey. This together with the derivative markets is expected to drive growth in 2009. Its strong capital base enabled it to pay a dividend for 2008, in contrast to peers. IsY is trading on a P/E of 3.0x 2009e with a dividend yield of 8.7%. Research type: Update - Quarterly results |
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| Jun 01 2009 |
Further funding secured Today Gasol announced a £10m standby equity agreement with GEM. It will use these funds, together with the £1m in new equity announced on 27 May, for working capital and to fund its continuing development activities. This potentially covers the company’s requirements for 2009 (£4m) and beyond. Research type: Flash Note - Fundraising |
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| May 29 2009 |
New NPL-2008 trial plan Neuropharm’s shares rose sharply yesterday on the suggestion that it may be close to securing a pharmaceutical company partnership for lead product NPL-2008. It has started working on the design of a second Phase III trial in autism with a potential partner, suggesting it is at an advanced stage in negotiations. Confirmation of a partnership and trial plans would effectively transform the investment case, following the setback in the SOFIA study earlier this year. Our model, which does not assume a partnership, suggests it will end the financial year (30 June) with c £6m of cash. Research type: Update - Trading update |
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| May 29 2009 |
If it’s not broke, don’t fix it The cyclical nature of Brewin Dolphin’s business has been more challenging in the last year than at any time in the last four decades. However, by continuing to attract small fund management teams, discretionary funds under management (FUM) have fallen by 8.8% against a drop in the FTSE 100 share index of 23.4%. Management’s outlook is naturally cautious, but investors can take some comfort from a maintained dividend, and with £31m of cash on the balance sheet, the opportunity for longer-term earnings recovery looks promising. Research type: QuickView - Interim results |
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| May 29 2009 |
Questions answered 2009 results show management to have successfully addressed key investor concerns: the resilience of corporate travel service earnings and HRG’s high indebtedness. Thanks to predominantly managed income and aggressive cost control profits did not collapse despite tough conditions, and excellent cash management ensured a striking cut in net debt. With more of the same on the cards, a resumption of PBT growth on a leaner cost base in the current year is not unrealistic. Research type: Update - Full year results |
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| May 29 2009 |
Transitional year in 2009 Northern’s full year 2008 results published last week showed good underlying performance from operations with revenues up to �7m and positive earnings driven by profit on non-core asset disposals. The company is also progressing well on its development projects in the Netherlands with at least two new fields expected to come on stream before year end in addition to four exploration wells scheduled within the next 12 months. Research type: Update - Full year results |
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| May 28 2009 |
Robust performance 40%+ growth in the SaaS revenue base and order book highlights the robust performance of the group against a volatile market backdrop. Importantly, banks are recognising the economic attractions of FFastFill’s offering and identifying the decision makers within consolidated customers has become clearer. Our forecasts remain unchanged and we continue to believe the group has a technology platform and business model that can deliver significant upside for shareholders. Research type: Review - Full year results |
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| May 27 2009 |
Contract and fund-raising Cyan has announced significant progress in field trial shipments for its gas meter modules. These contracts have the potential to generate major annual revenues and the group is in discussions with similar players that could add up to substantially greater volumes in FY10 and beyond. To support the growth outlook, the board has raised an additional £1.2m. In our view the viability of Cyan’s technology looks increasingly underwritten both commercially and economically. Research type: Update - Placing and operations update |
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| May 26 2009 |
Disposal of Anix The board has announced the sale of Anix, the group’s core managed services and hardware asset. The disposal value is below our last published valuation but nevertheless delivers another very good return on management’s buy and build strategy. The group is left with the intriguing-looking Storage Fusion software business and over £20m of cash to support a future similar strategy. Research type: Update - Disposal |
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| May 26 2009 |
High revenue growth DDD reported Friday that 2008 revenues rose 81%, while the loss increased 20% as R&D amortisation doubled. The company expects to recognise £0.9m licence fees in FY09 from the recent software and hardware five-year licence agreement with large OEM Wistron, which paid £0.4m in January for 14% of DDD. This relationship opens up considerable 3D opportunities for DDD – not just in HDTV but more prominently in the notebook and PC monitor markets. Combined with the 2008 Samsung 3D HDTV chip licence agreement, we expect high revenue growth in both FY09 and FY10. Research type: Update - Full year results |
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| May 22 2009 |
Focus on local gamers The group operates an international portfolio that combines established and early stage gaming and hotel assets across four continents. It has an executive team with a depth of industry knowledge and experience, a network of local partners and a differentiated business model that we regard as defensive. A recent visit to group operations in Panama, Costa Rica and Peru made persuasive arguments for team strength, product quality and competitive advantages. The current valuation reflects concerns over the impact of recession and tight credit markets on the growth outlook. These issues should be clarified in H109, with the shares due for a re-rating. Research type: Outlook - Initiation of coverage |
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| May 22 2009 |
Model intact despite delay Today’s trading update from i-design reflects fallout from the recent turmoil in the banking sector. We have revised our FY09 estimates for the absence of any new client atmAd licence fees in the current fiscal year. However, we believe that i-design continues to achieve strong revenue growth in media sales, demonstrating proof of its business model for existing ATM network clients. The group had £1.7m net cash at 30 April 2009, and we believe it has sufficient resources to weather this delay. Research type: Update - Trading update |
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| May 22 2009 |
Take a deep breath Vectura offers an investment geared to the success of its inhaled therapy portfolio, which includes branded and generic products targeting blockbuster markets. It is one of a handful of UK biotech companies with significant cash and no funding requirement. Our valuation model suggests that the market is pricing in its four lead projects, but upside is possible once Phase III studies start this year and/or licensing deals progress. Research type: Outlook - Full year results |
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| May 21 2009 |
Financial delivery First Derivatives (FD) has today released a very solid set of results given the state of the financial markets and turmoil among the group’s investment banking clients. Recently acquired Market Resource Partners (MRP), which diversified the group’s operations away from investment banking while also offering significant potential synergies, performed ahead of our expectations. FD has established a healthy track record and, while we expect FY10 to be a year of consolidation, in our view remains well placed to continue on this growth path. Research type: Outlook - Full year results |
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| May 21 2009 |
Sativex filed in Europe GW has submitted an EU application for Sativex to treat multiple sclerosis spasticity, following recently reported positive data from a pivotal study. Approval in the first two European countries, expected in the 2010 fiscal year, will result in receipt of a combined £12.5m from GW’s licensees, Almirall and Bayer. Recruitment of patients into a separate programme in cancer pain has accelerated, and the start of Phase III in this indication will generate a $5m milestone from Otsuka. Research type: Update - Interim results & regulatory submission |
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| May 20 2009 |
Need to churn out cash The dividend cut results in an unexciting prospective yield of 5.8%, though even this is not without its risks. The market is assuming that a recovery in the dairy division’s profitability is sufficient to offset the loss of stocking profits in cheese and an uplift in marketing costs. However, that is by no means a done deal. While we continue to believe the market is overly compensating for risks of high indebtedness, short of another divestment, we see little to catalyse the share price. Research type: QuickView - Full year results |
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| May 19 2009 |
Meeting challenges Aero Inventory’s (AI) critics question the macroeconomic impact on forecasted earnings and the sustainability of a business model that appears to require significant working capital. We are reducing our FY10 estimates to reflect macro concerns and believe they reflect a prudent outlook. However, our view is that long-term funding for future growth is becoming assured. Major contracts have now been on its books for an average of two years and are becoming cash generative. At this point the business becomes self funding. Given this view, we feel the risk/reward balance is poorly reflected in the current share price. Based on existing contracts alone, we calculate a DCF implied value of up to £6.75. Research type: Review - Trading update |
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| May 19 2009 |
Growing multi-service The drive for best value for money is leading more public and private sector organisations to outsource to control costs. MITIE has been moving up the capability curve into a position where it can militate against margin pressure on individual contracts by offering additional services and value to clients. Its long-term growth record is intact and its cash conversion testament to tight working capital management. It has defensive yet growing earnings, an attractive combination. Research type: QuickView - Preliminary results |
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| May 18 2009 |
Optim profit Avacta has evolved through the acquisition of four businesses, including three in early 2009 bringing c £3.6m cash and annualised revenues of over £1.2m. Avacta is now organised into two businesses: the analysis of biopharmaceuticals and diagnostics. Each has a mix of specialist services and instrument sales. The analytical unit launched the Optim system in April; this is critical for FY10 revenues. The diagnostics unit sells specialist veterinary tests and will sell the MIDAS instrument from FY10. Cash appears adequate and is underpinned by the services operations. Research type: Outlook - Acquisitions |
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| May 15 2009 |
Trust required Unexpectedly high finance charges threaten forecast downgrades for 2009 even if management’s continued optimism about peak season trading holds good. Investors may be unforgiving of internally generated ‘shocks’ when so much in the tour operator business model has to be taken on trust. That apart, management remained ‘on message’ about trading, if wary of a tough 2010. Research type: QuickView - Interim results |
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| May 15 2009 |
Deal-driven investment Paion’s investment case realistically hinges on the successful partnering of two key R&D programmes: the short-acting sedative CNS-7056 and iv opioid M6G. Paion has cash until mid-2011, and a licensing deal should secure it until 2011/12, when desmoteplase Phase III trials complete and substantial milestones from Lundbeck could be triggered. €38m is due up until successful registration of desmoteplase. Paion trades at close to its current cash value. Research type: Outlook - Quarterly results |
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| May 15 2009 |
Forecasts confirmed In yesterday’s interim management statement, Asterand reported first-quarter revenue of £3.2m, confirming our full-year forecast of £13m excluding potential future licensing deals. Period-end cash stood at £6.7m, down slightly from £6.9m at the end of 2009, implying adverse seasonal movements in working capital. Extension of a credit facility gives Asterand added flexibility for possible future acquisitions. Research type: Update - First quarter results |
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| May 15 2009 |
Constant current The trading update for the first four months of FY09 as expected flagged revenues broadly flat on last year. Behind the headline sales numbers we estimate volume shipments are down 15-20% with an offsetting benefit from weaker sterling. Importantly, cost cutting and the continued mix improvement in favour of own designed and manufactured product, is supporting higher gross margins and a stable balance sheet. The shares have bounced strongly, reflecting the over-sold position of the stock into February’s final results and some pricing in of the cyclical potential of the business model. However, on a P/E of under 6x and a yield of over 10% we still believe a share price closer to 300p represents fairer value this year. Research type: Update - Trading statement |
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| May 14 2009 |
A fair wind Consensus full-year estimates, already raised on the back of excellent interims, could yet be low given management’s record of delivery on cost efficiencies. While margin enhancement will be at a premium in likely tougher conditions in H2, the gain of 60 basis points across the group in H1 was no mean achievement in a hardly ideal market. Forecasts assume that this is far from repeatable. Research type: QuickView - Interim results |
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| May 14 2009 |
Dividend growth, a relatively good yield and strong reserves Despite turbulence in global equity markets and a difficult political and economic backdrop, Aberdeen New Thai (ANW) has outperformed its benchmark, in terms of NAV, during the last 12 months. With its recent results announcement ANW has grown its dividend by 27.3%, and has maintained or increased the dividend every year for the last 10 years. The yield compares very favourably to its peers and, after payment, ANW has revenue reserves equal to 2.5 times the current dividend. Research type: Investment Trust Review - Performance update |
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| May 14 2009 |
Exploiting synergies Stobart’s results show it can continue to deliver good earnings progression despite the recession. Its unique logistics strategy offers an attractive road haulage option and some exciting undervalued assets that can develop its multi-modal ambitions through rail, port and air. Its stability and growth justify the valuation of c 12x. Research type: Outlook - Full year results |
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| May 14 2009 |
Reality (finally) bites SQS has been a stand-out performer both operationally and in share price terms for a considerable period of time. However, the impact of the global recession has finally resulted in a set-back and H109 results will fall well short of expectations. On the plus side, new client wins are still driving the top line and the outlook for H209 should see a recovery in margins. Meanwhile, the long-term investment case is still attractive. Research type: Update - Trading update |
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| May 14 2009 |
Step-up at Khurbet 2008 was an exceptional year for Gulfsands with a strong underlying performance and revenues up 44% to $53.6m. This is likely to improve further with Syrian production forecast to increase from its current 11,000bbl/d to 18,000bbl/d by Q309. Additional upside lies in the appraisal of Yousefieh and in potential new drilling targets from the processing of new 3D seismic on Block 26. Research type: Update - Conference presentation |
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| May 14 2009 |
An emerging opportunity Dominion Petroleum is a pure East and Central Africa exploration play, with interests in Tanzania, Uganda and the Democratic Republic of Congo. The company’s short-term issue is securing funding for the next stage of its exploration programme, at present actively being worked. The recent Mihambia-1 well was disappointing, but investors will forgive this if Dominion replicates Tullow and Heritage’s spectacular success in the Albertine rift basin in Uganda, the company’s next exploration target. Recent prospect mapping has identified around one billion barrels of recoverable contingent resources. Research type: Outlook - Conference presentation |
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| May 14 2009 |
Challenging H1 FY09 always presented a challenging outlook as evidenced by the pressure on consultancy fees from the delay and deferral of capital projects. This was expected to be offset by a growth in operational consulting revenues but, although group sales are ahead of the same period last year, a fall in profitability means we have scaled back forecasts and now expect a decline in group PBT in the current year. Research type: Update - Trading update |
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| May 14 2009 |
More than meets the eye While relatively expensive compared to its UK-listed peers, given its record of growing resources at a compound rate of 11% per annum, we believe that Randgold Resources can justify its rating and remains the UK’s premier gold stock. Its enterprise value of US$250 per resource ounce is still at a discount to its post-tax (cash) margin of c US$335/oz. RRS’s attributable production profile is expected to rise to 412,000oz in FY09 to 752,000oz in FY12 as Tongon is brought into production. At the same time, the company’s hedge book will fall away, exposing it to the full effect of rising gold prices, while Morila will become a cash cow. Research type: QuickView - Quarterly results |
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| May 14 2009 |
Evidence of diversification Sarantel has announced an order from the US Navy for its GeoHelix antenna technology. The initial value is small and the end application unknown. However, this deal provides further evidence of the early success of Sarantel’s strategy to diversify into higher value end markets. We believe there are a number of similar opportunities which support both the group’s technology offering and equity valuation. Research type: Update - Contract win |
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| May 12 2009 |
The next phase Adili is positioning itself for the next phase of its development, moving on from start-up towards building to profitability. Our model assumes this is achieved in the year to April 2012. The board has been restructured to give more appropriate support for this phase and the first tranche of the necessary funding has been raised. We expect the preliminary results at the end of June/early July and look for acceleration in sales. Research type: Update - Trading update |
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| May 11 2009 |
Bringing the cash on Bard The 11 May announcement that CR Bard has commissioned a custom peripheral catheter from ClearStream emphasises ClearStream’s leading technology position in this growing $395m market. The deal terms are not fully disclosed, but the main item is $2.1m (€1.57m) in cash for a new peripheral catheter design for the US market. ClearStream will manufacture some of the launch stock over the next 12 months while Bard puts the product into production. The product is believed to be different from those co-labelled with Cordis in the US and is designed to Bard’s specifications. Research type: Update - Contract win |
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| May 08 2009 |
Taking stock Spirent was built for all the right strategic reasons but had a legacy cost structure. The current management team has taken out significant costs and has a globally leading business that is capable of generating substantial cash even in a down year. The sensitivities for investors are the broader economy, a likely placing and the risk that cost cuts could prove too deep. However, in our view the revenue outlook for FY10 could end up being stronger than expected and, given the cost and FX benefits, this would translate into earnings and cash flow metrics well above consensus. Research type: QuickView - Interim management statement |
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| May 08 2009 |
In transition Cryptologic launched its new strategy in October 2008, shifting its focus from turnkey online gaming systems to licensing branded games. So far it has added an impressive roster of new clients which should increasingly contribute during 2009. With the revenue base in transition Q1 results showed a loss, as expected, but management still anticipates a return to profitability during the year. The online gaming market has excellent medium-term growth potential, which Cryptologic, with its strong line-up of branded games, is well placed to capitalise on. Research type: QuickView - Q1 results |
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| May 06 2009 |
Global exposure, keen risk controls and a strong performance In its recent results announcement Gartmore Global Trust PLC (GGL) increased its dividend by 27.3% and now offers a 2.8% yield. With an average outperformance of 7.1% pa, GGL has comfortably beaten its formal capital performance target of outperforming its benchmark by at least 2% in each financial year since it was set by the board four years ago. The trust is managed using a top-down approach, with a very strong emphasis on risk control, including a 5% tracking error limit set by the board. Although the trust remains defensively positioned, reflecting the current economic climate, the manager expects the market to continue to offer investment opportunities. Research type: Investment Trust Review - Initiation of coverage |
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| May 06 2009 |
Continuing along the path Protonex has continued to hit milestones as it progresses to commercialisation. The latest is a successful long operation test for unmanned aerial and ground vehicle (UAV and UGV) products powered by Protonex systems. It also saw further grant awards for another UAV project and yesterday’s strategic update confirms the progress being made within the military market. We are releasing our 2010 numbers, which include the delayed grant payments from 2009 and early unit sales of the M250-B product. Research type: Update - Strategic update |
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| May 06 2009 |
Kidney transport device Lifeline’s LifePort device is used to store and transport donor kidneys for transplant and has achieved high adoption in North America during its pilot introduction phase. A landmark clinical study has confirmed its superiority over the traditional cold-storage method. A full evidence-based commercial launch is now underway, anticipating wider use and a higher average selling price of single-use consumables. This should allow Lifeline to gain more market share and reach profitability in 2009. Research type: Outlook - Full year results |
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| May 05 2009 |
Transformational year NEOVIA reported full year results in line with market expectations, despite a sharp deterioration in economic conditions. However, the board has stated it was not fully satisfied with the group’s progress towards its strategic aims during the year. Despite weakness during Q1, we believe NEOVIA remains attractively positioned as a leading provider within the internet gaming payments space and has made meaningful developments to address other online payment categories. Research type: QuickView - Final results and Q1 trading update |
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| May 05 2009 |
B2B progress 888’s Q1 KPIs were as expected, with lower casino and poker revenues but good growth in B2B income. Encouragingly, Q2 to date is better, with revenue up 3%, and net cash stands at US$78m. The shares have underperformed the online gambling sub-sector due to recent profit downgrades, and the timing and scope of any settlement with the DoJ represents an ongoing uncertainty. However, 888has excellent brands and a growing B2B revenue stream, while long-awaited M&A activity is expected to enliven the sector during 2009. Research type: QuickView - Q1 KPIs and trading update |
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| May 05 2009 |
Swap deal with Sanofi Oxford BioMedica’s swap deal with Sanofi-Aventis – in which it agreed to collaborate on the development of four early-stage gene therapy products, while regaining rights to its later-stage cancer vaccine TroVax – provides c £25m of cash and £16m of R&D funding, effectively shoring it up into 2012. Results of the amended TRIST study and the outcome of a meeting with the FDA are the next catalysts and should become known in June. Research type: Update - Collaboration |
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| May 05 2009 |
Buoyant Q1 When annual results were announced in March, we pared back FY09 forecasts to reflect the consequences of lower interest rates on ‘house’ interest and the impact of a depressed equity market. However, trading in Q1 has been buoyant and, aided by the interest rate floor policy, the risk to estimates is now on the upside. A solid balance sheet and strong cash flow lend further weight to the investment case. Research type: Update - Trading update |
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| May 01 2009 |
Meeting expectations This morning’s trading update from Cyril Sweett highlights its resilient business mix, geographic diversity and ability to right size the business quickly in response to deteriorating market conditions. The group’s net cash position and leaner cost base put it in a strong position to weather any further economic headwinds and, importantly, to benefit from an eventual upturn. With the group confirming that it will meet market expectations, the current valuation of 4.9x current and 7.2x prospective earnings is likely to bring Research type: QuickView |
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| May 01 2009 |
Investment summary: Gear change Today’s FY08 prelims have removed a lot of the uncertainty surrounding Lookers, which should be resolved in the coming month as the renegotiation of its debt draws to a close. The group believes it will secure a revolving credit facility of £53m and two term loans totalling £157m, implying £210m worth of credit – a 13% reduction vs the current facility. While awaiting this firmer ground, Lookers has outperformed the deterioration in the UK automotive market, with Q109 retail sales down c 22.5% compared to c 30% for the market. It has also increased its market share in other divisions such as parts distribution. Research type: Update |
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| Apr 30 2009 |
Firing on all cylinders On Tuesday Patsystems released a positive AGM trading statement. The group reported that FY09 has started strongly with sales successes across all products and regions; this news underpins our FY09 forecasts. Cash generation was strong with £1.4m added to the group’s cash pile over the quarter, indicating that Patsystems is well placed to surpass our year end cash forecast of £8.2m. Research type: Update - Trading update |
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| Apr 30 2009 |
Gas overtakes oil... Shell’s first quarter results, $3.3bn after inventory adjustment, were hit by lower price realisations and weak energy demand. However, this is comfortably ahead of analysts’ forecasts of around $2.6bn. Gas is a core component to these results, with gas production for the first time overtaking oil and with spectacular realised prices. Importantly, we believe that Shell’s price advantage in gas is likely to persist. The market reaction has been mutedly positive, rising 1.7% by yesterday’s close. Research type: QuickView - Quarterly results |
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Edison's research ... is balanced, objective and provides a level of detail not normally associated with smaller companies.
Peter Knowles
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