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Best Research Award 2007
Edison Investment Research, winners of 'Best Research Award'
| Date | Reports available | Download |
|---|---|---|
| May 15 2008 |
Promising copper explorer Discovery Metals has explored less than 5% of the strike length of the copper mineralisation within the tenements that comprise its North West Botswana Copper Project (NWBCP). Nevertheless, its programme has already delineated a mineable ore body with a discounted cash flow (DCF) conservatively estimated at US$116m in FY11, but potentially worth US$300m. Research type: Outlook - Initiation of coverage |
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| May 15 2008 |
BD activites in focus Curidium continues to pursue a business development strategy aimed at establishing commercial arrangements to exploit Homomatrix in new areas and PsychINDx in schizophrenia and bipolar disorder. We believe it may be possible for it to secure an agreement this year. Any deal would likely be a significant share price catalyst. Research type: Review - Full year results |
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| May 15 2008 |
Progress on key assets in the Ukraine Today Regal issued an update on its Ukrainian assets which are fundamental to the transformation of the company. The update provides further evidence that this transformation is moving forward quickly at an operational level, and not just at a corporate level. Research type: Flash note - Trading update |
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| May 15 2008 |
Unlocking the numbers On Monday Northern Petroleum reported preliminary financial results for FY07 broadly in line with our expectations. Revenue growth from new Dutch production was boosted by asset trading to give a net income of £14.9m (vs a loss of £1.7m in 2006). However, behind these results, 2007 was an important year for the company in positioning itself to add significant value. As management continues to unlock the value in its international asset base, we expect its share price to gradually reflect the value we see of £299m or 424p/share. Research type: Update - Full year results |
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| May 15 2008 |
Successful offer The retail offer for subscription was almost 4x oversubscribed and a successful IPO and AIM quotation should help the company raise its profile among investors and increase the appeal of Share’s paper currency for potential deals. Stable fee and interest based income underpins strong cash generation and, given the potential for growth, supports a solid investment case. Research type: First day of dealings |
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| May 14 2008 |
Underlying strengths A complicated set of results hides strong underlying performances from the core businesses. Reorganisation over the last six months leaves the whole business in a good position to maintain strong growth although the valuation has still to settle down from its merger pricing. Research type: Update - Final results |
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| May 14 2008 |
Results and new FD Leisure & Gaming’s final results were as forecast in our Outlook report dated 16 April. More importantly, management has reaffirmed that the business is continuing to trade profitably, benefiting from the operational changes outlined at the time of the Q1 trading update. The new Finance Director, Richard Creed (ex BetonSports plc), brings considerable gaming experience to the company. Research type: Update - Final results |
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| May 13 2008 |
Cash coming in Since our last note, Accident Exchange’s (ACE’s) share price has more or less stayed static, admittedly with significant volatility. Since then we have seen evidence of improved cash collection and the conclusion of the GTA rate review suggesting a more benign environment between insurers and credit hire companies. The shares rallied c 10% on the trading update, this however only unlocks a fraction of the upside potential. Research type: Update - Trading update |
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| May 12 2008 |
Mixed performance BPI’s AGM statement paints a very mixed picture, but thankfully leaves us with no overall surprise. Increased competitiveness and acquisitions are helping volumes in the face of some market sectors’ deterioration. The pressure, however, remains on input costs. The announced anticipation of a lower H1 result is already assumed in our forecasts. Research type: Update - AGM statement |
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| May 12 2008 |
Mining services in Africa MDM Engineering Group Ltd (MDME) is a mining services company focused on gold, uranium and base metals in Africa. Formed in 2006 from the liquidated assets and key technical staff of MDM Ferroman, new management has successfully changed the business model and pricing structure of the company from a fixed-price to a cost-plus one to reflect current market conditions. After winning several key contracts, it has now listed on AIM (raising £5m gross) to fast-track growth. Research type: First day of dealings |
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| May 09 2008 |
AGM update Financial Objects’ AGM highlighted an H1 trading shortfall with revenues below budget in the banking and wealth management divisions. We have cut our earnings forecast for this year by 22%. While this is disappointing, we continue to believe that the group has an attractive mix of growing and cash generative financial software businesses. In our view these assets are capable of achieving higher returns on current investment and have strategic attractions in a consolidating industry. Research type: Update - Trading update |
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| May 06 2008 |
Colostrinin revenues ReGen Therapeutics has modest but growing revenues from its nutraceutical Colostrinin and, through funding facilities in place, can finance its planned R&D activities this year. These comprise further work on its novel formulation of zolpidem for neurological dormancy and some early-stage research into peptides for Alzheimer’s and other conditions. Confirmation of a US mass market partner for Colostrinin and launches of the product elsewhere could provide significant upside. Research type: Outlook - Full year results |
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| May 06 2008 |
Hotting up? Aberdeen New Thai (ANW) appears to be recovering from its disappointing performance in 2007 when it decided to underweight the energy sector in general and, specifically, management’s decision not to invest in the index’s largest energy company, PTT, owing to perceived political vulnerability and concerns over corporate governance. However, driven by an expansion in domestic consumption, and management’s focus on stocks with an exposure to this growth, the fund has performed strongly since the start of the year, generating a total return of 10% vs a largely flat performance from the Stock Exchange of Thailand (SET). While Thailand’s economy remains vulnerable, particularly from the intervention by the military, current conditions support a positive outlook for ANW. Research type: Investment Trust Review - Full year results |
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| Apr 30 2008 |
Late-stage progress Plethora Solutions appears set to deliver important newsflow this year, including possible partnering of three projects, Phase III data for PSD502 and the start of pivotal studies with Invicorp. Reported full-year revenues are in line with our forecasts, while a recent (post year-end) financing deal signed with Paul Capital has bridged a key funding requirement. Research type: Update - Full year results |
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| Apr 30 2008 |
Ahead of expectations Axis Intermodal has delivered ahead of expectations, with strong underlying growth in both profits and hire fleet. After performing well in autumn 2007, the share price has drifted back steadily in a thin market. The City remains nervous about the likely impact of the credit crunch, while the AIM market has been dull for some months. The risk/reward ratio is high, but the shares look distinctly undervalued. Research type: Review - Full year results |
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| Apr 30 2008 |
Getting closer As production in China gets closer, the Manganese Bronze share price has continued to drift back from its euphoric high point. The message from management is that the joint venture continues largely to plan and that indications from potential customers for the new taxi are positive. Experience often shows that travelling is better than arriving, but the portents appear still to be firmly positive, suggesting that nervousness about arriving has been overdone. Research type: Outlook - Full year results |
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| Apr 30 2008 |
Intrepide CE On Thursday 24 April, ClearStream announced that its drug eluting stent, Intrepide, had obtained CE marking. This enables Intrepide to be sold in the EU and marks a clear milestone in the development of the business. We expect modest sales initially as the product will be used in registries giving patient outcome data. Nonetheless, this provides a high value added new product line for the distributor network. Research type: Update - Product CE marking |
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| Apr 30 2008 |
Remaining independent The principal outside shareholder has now reversed its earlier decision to sell its shares, an indicative 20p per share offer has failed to materialise and the extended period of uncertainty has ended. Management can now look forward, building on the growth which continues to be delivered in its two core businesses. Uncertainty is now past, and the recent period of share price weakness looks set to be reversed. Research type: Update - Trading update |
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| Apr 30 2008 |
Prospects still intact Sigma released its results for 2007 today. The numbers came in below estimate as the property division has yet to complete its seventh property partnership. Despite this, the group’s prospects are underpinned by rising venture fund fees and good opportunities emerging in the property market. Research type: Update - Preliminary results |
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| Apr 29 2008 |
Initial volume orders Cyan’s share price reflects only the ‘option’ value that management can build out OEM partnerships, translate this into orders in its target markets and leverage the fabless business model. Clearly, it is very early in the rebuilding of the channels to market and the customer proposition, but today’s contract announcement is encouraging and provides some initial support for the company’s target of monthly profitability by the end of FY08. Research type: Update - Distribution deal |
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| Apr 29 2008 |
Interest from big names The basic message as Byotrol enters its closed season is that the momentum of approvals and potential business shows little sign of slackening. However, the timetable for revenue generation remains uncertain. Byotrol should get close to our 2008 revenue target, but the real opportunity is inherent in the various negotiations with multinational product manufacturers, which can transform profitability. Research type: Update - Trading update |
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| Apr 29 2008 |
Sportseen acquisition Essentially has announced the acquisition of Sportseen, a leading UK rugby perimeter advertising business, for up to £9m. Sportseen complements Essentially’s existing strengths in rugby and cricket and improves its seasonal profile. A successful placing has raised £6m, underpinning Essentially’s clear strategy to become the leading sports marketing, media and services company in its chosen areas. Research type: Update - Acquisition |
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| Apr 29 2008 |
Impressive growth Walker Greenbank has delivered impressive growth over the past three years, while establishing a clear focus and then investing effectively in planning for the future. Trading conditions in consumer markets are becoming more challenging, but management continues to view the future positively, with a well defined strategy to build on the recent trading record. The shares look distinctly undervalued. Research type: Outlook - Full year results |
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| Apr 28 2008 |
Attractive yield The market’s cautious reaction to the Molins interim management statement is understandable, but it ignores the underlying value of the business. There is a strong balance sheet, to be boosted in the autumn by the likely proceeds from the sale of its Saunderton site. The key businesses are sound, with recognised global positions in their chosen markets, while the well above average dividend yield looks quite safe. Research type: Update - Trading update |
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| Apr 28 2008 |
New platinum miner Ridge Mining is developing two projects to exploit platinum group metals (PGMs) and nickel on the South African Bushveld Igneous Complex at a time when demand for PGMs is growing on account of increasingly stringent auto-emissions targets globally, but long-established supply is stuttering. Research type: Outlook - Trading update |
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| Apr 28 2008 |
Costs of scaling up Adili put out a year-end trading statement stating that revenues are broadly in line but that the loss for the year will be greater than expected. The largest element of adjustment is greater marketing spend, essential for building the brand. We have not yet changed our 2009 figures, but will be reviewing them as the sales pattern becomes clearer. With increasing consumer awareness of supply-chain issues, the market for ethically-produced goods and services continues to grow strongly. Research type: Update - Trading statement |
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| Apr 28 2008 |
Important contract wins This year’s contribution of at least $3m revenue from the $5.6m of contracts announced in the last week goes a long way to filling the year’s planned revenue. We are encouraged to see Protonex continuing to win military development funding, which should also help bring its commercial products to market more quickly. Total orders won now amount to $35m. Research type: Update - Contract win |
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| Apr 25 2008 |
Strategy update At an investor presentation today, the first stage of the new management’s strategy for the company was revealed. The prime emphasis is to leverage the group’s ability to offer and cross-sell a complete package of independent insight services that advertisers need to improve return on investment (ROI) for their marketing and media spend. In addition, it was announced yesterday that Andrew Beach has been appointed Group Finance Director. Research type: Update - Strategy update |
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| Apr 24 2008 |
Operating momentum Xploite has announced a major storage contract win and continues to see encouraging customer momentum across its managed services and software businesses. The group recently announced an end to its potential takeover discussions. However, the strategy of building a mid-sized IT managed service business is playing out successfully and there are a number of interesting opportunities emerging with the major storage vendors. We forecast £4.0m of EBITDA this year and reach a sum of the parts DCF valuation of over £30m. Research type: Review - Contract win |
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| Apr 24 2008 |
Japanese cetilistat data now even more crucial The discontinuation of Alizyme’s irritable bowel syndrome product, renzapride, puts the spotlight squarely on its obesity project cetilistat, for which a licensing deal has yet to be struck. We believe that a deal hinges on the publication this year of six-month Phase II data by the Japanese partner Takeda. Accordingly, this study is key to the investment case, and we suggest that investors wait until data are published. Research type: Company Comment - Trial update |
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| Apr 24 2008 |
Funding future growth DDD announced today that it has issued £0.5m 8% Convertible Loan Notes (CLN) to its major shareholder and three directors. This underscores their confidence in the business. The net proceeds of this placing allow the company to continue to develop its 3D products, with the focus on the TV market. The 3D market for individual and home use is gathering pace – the company has delivered the world’s first ‘integrated’ 3D HDTV and retail sales of the 46” Hyundai 3D LCD HDTV began this month in electronics retail stores in Japan. Revenues are expected to gain momentum in FY08, with licences and royalty income taking up the baton, with lift-off potential in FY09. Research type: Update - Fund-raising |
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| Apr 23 2008 |
Significantly ahead ACM has announced that profits will be significantly ahead of market expectations, as a result of sound underlying trading boosted by a strong final quarter in sale and purchase. The share price has held up well in the face of a weak US$ and the difficult time for the AIM market. However, a higher rating is justified. Research type: Update - Trading update |
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| Apr 23 2008 |
Delivering the goods As heralded at its January AGM, Next Fifteen today reported strong interim results and increased its interim dividend by 12.5%. Fully diluted normalised EPS rose 17%, boosted by higher operating margins and a lower tax charge. Cash flow remains positive and the group again has a net cash position at the half-year end. Since then, the group has raised its stake in Lexis to 87% (from 77%) and is exploring selective accretive acquisitions to add to organic growth. The group continues to see a strong new-business climate, particularly in the US, UK and mainland Europe. Research type: Update - Interim results |
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| Apr 23 2008 |
Realising the potential Regal Petroleum’s new management team has already delivered the first stages of a transformation plan to realise the potential value in the company’s international assets. Its successful $165m fund-raising in January is clear evidence that having got the right people, improved corporate governance, projects and funding in place, there are attractive opportunities for investors as the company gradually shakes off historical sentiment overhang. Research type: Outlook - Initiation of coverage |
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| Apr 22 2008 |
Interim blues After the trading update on 18 January, the interims confirm that sales in the normally slower first half were €3.6m, up slightly on revised expectations. Co-labelling sales dropped €1.9m compared with H107. Seasonal effects and underlying 40%+ growth could yield H2 profits of €300k after H1 cost reductions. Extended credit facilities and directors’ loans will help to fund tight working capital. Research type: Update - Interim results |
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| Apr 18 2008 |
Campath in focus at AAN Full three-year data from a Phase II study of Campath – presented at the American Academy of Neurology – support its potentially highly attractive profile in multiple sclerosis. Campath, which could gain approval in MS in 2012, will be an important royalty source compensating for BeneFIX, whose patent expires in 2011. BTG’s financials are due at the end of May – its already reported year-end cash of £55m was well above expectations. Research type: Outlook - Trading update |
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| Apr 17 2008 |
Increased capability and geography Themission® has published preliminary figures in line with expectations, with growth comfortably in excess of the market at pro forma levels. The acquisitions to date have been bedded in and are already leveraging off each other. Poor sector sentiment and concerns over any repetition of the problems of earlier would-be industry consolidators have undermined the share price well beyond a reasonable level. Research type: Update - Full year results |
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| Apr 16 2008 |
Betshop refocused Leisure & Gaming’s (LNG’s) main business, Betshop Italia, has a good brand name and an established franchised shop network in Italy. Management has made significant operational changes which are reflected in recent improving gross profit trends, although 2007 trading was volatile and the business would still benefit from greater scale and diversity. LNG has considerable potential albeit that Italian market liberalisation has been slower and more complex than originally hoped. Research type: Outlook - Trading update |
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| Apr 16 2008 |
Sharing it out Share plc generates a high quality earnings stream through its principal subsidiary, The Share Centre, which provides equity-related services to private individuals. Share is now seeking admission to AIM, principally to raise its profile among investors and boost market share. Stable fee and interest based income underpins strong cash generation and, given the potential for growth, supports a solid investment case. Research type: Pre-IPO |
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| Apr 16 2008 |
IP spin-out play Biofusion, which has long-term exclusive partnership agreements with two of the UK’s top 10 universities (Sheffield and Cardiff), announced today its first results under IFRS accounting. These interim figures include fair value adjustments for its fixed asset investments, though not the majority owned spin-out subsidiaries. Research type: Outlook - Initiation of coverage |
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| Apr 15 2008 |
Confirmatory trial data Summit reports results today from a Phase I clinical trial of SMT D002 for treating seborrhoea (greasy skin). The trial found significant levels of sebum suppression of 90% compared to placebo group (p=0.04). These data confirm the findings from a previous study. The company is actively seeking a licensing deal during 2008; these data enhance the value of the SMT D002 programme to potential investors. Research type: Update - Clinical trial results |
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| Apr 14 2008 |
Identity momentum The full year trading statement highlighted our forecast operating momentum across both divisions in the second half of the year. Importantly the group is seeing increasing evidence of a move from manual to electronic methods of identity verification, and management is targeting a new industry sector that requires the verification and management of the identity of its customers to minimise fraud and regulatory risk. Research type: Update - Trading statement |
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| Apr 14 2008 |
Put me down Holders of Skyepharma equity face just one major near-term issue – the risk of a significant dilution if holders of a £69.6m convertible debt can act in concert and force through a debt-for-equity swap. Although management is attempting to renegotiate this debt, we think it unlikely that this will be possible without damaging equity holders’ interests, and the issue is not yet fully recognised by the market. Research type: Company comment - Debt issue unrecognised |
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| Apr 10 2008 |
Outlook positive, re-rating overdue AT Communications (ATC) reported December year end numbers yesterday that met consensus forecasts and were reinforced by a positive outlook statement and a healthy new business pipeline. PBT was £6.2m (£4.6m) on sales up 63% to £88.4m (£54.1), driven by maintenance and network services revenues. Shares trade at 4.3x forecast 2008 earnings (fully taxed) and 4.1x historical 2007 reported earnings. After a period of investment and reorganisation, and with bank refinancing now in place, management focus is on organic growth, which we estimate will be at a level of 10–15% per annum for the next three years. Our forecasts for the forthcoming year look easily achievable. Research type: Company Comment - Final results |
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| Apr 10 2008 |
Excellent results As indicated in the pre-close trading statement, Walker Greenbank has once again comfortably beaten market estimates, with normalised pre-tax profits more than doubled to £3.53m. The sharp increase stems from the impact of operational gearing on organic revenue growth of 15% and has lifted earnings sharply. Research type: Flash note - Preliminary results |
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| Apr 09 2008 |
Ready to play? Aldgate plans to become a significant new player in the UK and European gambling market. CEO Nick Harding (ex Talarius) has an excellent track record for value creation in the industry and Aldgate successfully raised £6.5m gross in a share placing in February 2008. Current tough trading conditions in many sectors of the leisure market (caused, for example, by the smoking ban) should produce good buying opportunities over the coming months. Research type: Quarterly Update - Trading update |
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| Apr 08 2008 |
MS pain data GW has reported results from its trial in neuropathic pain associated with multiple sclerosis (MS) which, while positive in a number of outcome measures, have failed to reach statistical significance in the primary endpoint. Despite this setback, development of Sativex for its two key indications remains on track, with the potential to trigger a total of £13m–15m in milestones on the first UK and EU approvals – still possible in 2009/10. Research type: Update - Trial results |
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| Apr 08 2008 |
A fresh start Greatfleet has new management which has acted quickly and decisively to stem cash outflows and install the structures and disciplines necessary to generate returns for shareholders. Sentiment in the recruitment sector is poor and doubly so for those supplying the financial services industry. However, we argue that, with the company rebuilding its operating ratios, the current share price should represent the nadir. Research type: Outlook - Initiation of coverage |
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| Apr 08 2008 |
Evidence of value With its first African exploration success, a 66% increase in the value of its US low-risk producing assets and over $18m net cash to more than meet current funding needs Aminex is looking stronger than many of its peers. Although its shares are trading below the value of its independently assessed producing assets in the US, we see significant opportunities for investors looking for evidence of value. Research type: Outlook - Full year results |
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| Apr 08 2008 |
Positioning for global mandates While its capitalisation may currently be modest, BrainJuicer has the ambition to become one of the top 10 market research agencies worldwide and already works for several of the biggest global consumer corporates. It is using its strong cash flow to build the infrastructure necessary to support a larger international business. Premium earnings growth and management reputation justify the rating. Research type: Interim Review - Full year results |
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| Apr 07 2008 |
On track with ambitions Profitability in its first year of operations and delivery on its IPO promises bode well for PureCircle transforming into a real player in the coveted area of high intensity sweeteners. New product launches by its customers will be key to its success this year. Research type: Company Comment - Full year results |
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| Apr 07 2008 |
Set for maiden profit Asterand’s full-year results indicate that the company is on track to record a maiden net profit in 2008, having restructured its UK service operations, saving £700k a year, and entered the current year with over £1m of service revenue already on its order book. Asterand’s investment case relies on it becoming profitable quickly, before expanding its share of a fragmented but fast-growing market. Research type: Update - Full year results |
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| Apr 07 2008 |
Annual results Annual results reflect a business case still at an early stage of development and as such are not the main focus of the recent announcement. The completion of the fund-raising, the successful relaunch of the instant messaging solution and early evidence that the sales effort is gaining some traction are of more interest. Research type: Update - Annual results |
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| Apr 03 2008 |
Stand-out growth Annual results reveal dramatic earnings growth, while the outlook for future progress will continue to benefit from a series of strategic acquisitons. In addition, there are still considerable opportunities for further M&A, and management has realistic aspirations to grow sales towards £100m over the next three years. EPS growth of 31% in FY08 and 18% in FY09 clearly warrants a re-rating given a PE of just 6x. Research type: Outlook - Full year results |
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| Apr 03 2008 |
Anxious wait for trial data Investors will have to wait around a year to see the outcome of the TRIST study of TroVax in renal cell carcinoma, which it is hoped will provide solid evidence of increased survival for the gene-based immunotherapy. If positive, launch in this indication is possible in late 2009/early 2010, triggering a substantial payment from partner Sanofi-Aventis. However, renal cancer is both an orphan indication and highly competitive, and approvals in larger cancer markets are unlikely before 2013. Research type: Company Comment - Clinical trials update |
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| Apr 03 2008 |
Paul Capital financing The revenue interest financing deal signed this week with Paul Capital provides Plethora with $15m in immediate cash, meeting a key funding requirement and giving it flexibility in potential licensing talks. With the profitable US Timm Medical expected to have generated £5.7m in revenue last year, Plethora’s current market cap appears to ascribe little value to its remaining mid- to late-stage R&D pipeline. Research type: Review - Refinancing |
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| Apr 03 2008 |
Complementary deal Tikit has announced the acquisition of TFB, a leading provider of case and practice management software and services to small legal firms. This deal not only adds a strong business generating strong margins on c £6m of revenues but strategically further improves Tikit’s revenue mix and gives it access to c 500 new clients. The shares continue to reflect a lack of investor appetite for the sector and an implied assumption that earnings forecasts are at risk. However, we have upgraded our FY09 EPS forecast by c 13% and view this debt-funded upscaling of the business as very positive. Research type: Update - Acquisition announced |
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| Apr 02 2008 |
Simmering nicely Lincat is a solid company with a long track record of innovative and high margin manufacturing, supplying the growing market for commercial catering equipment. It has recently demonstrated its ability to focus on productive perfomance by the positive step change in margins at one of its major subsidiaries. It has also emphasised its commitment to shareholder returns by its recent substantial share buyback. The outlook is now uncertain at the macro level, but Lincat has weathered storms before and the current valuation gives little credit for these qualities. Research type: Outlook - Initiation of coverage |
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| Apr 02 2008 |
June diamond production With its plant less than three months away from completion and commercial mining operations at Lerala in eastern Botswana imminent, DiamonEx stands on the verge of successfully transforming itself from an exploration company into a member of the exclusive ranks of the world’s rough diamond producers. Research type: Outlook - Initiation of coverage |
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| Apr 02 2008 |
Overachieving Northern Petroleum issued an operations update this morning that confirmed that as well as growing reserves it is advancing operations on several fronts faster than we had previously anticipated. With a current EV of £71m versus our valuation of £299m (NPV10, $70/bbl oil) the market continues to attach zero value to much of its proven and probable reserves and significant exploration portfolio in the Netherlands and Italy. Research type: Flash note - Trading update |
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| Apr 02 2008 |
Progress on all fronts EMED Spain is getting closer to regulatory approval for the restart of the Rio Tinto Mine, which the company considers to be Europe’s largest such copper project. Drill results over the past few months have added to the existing gold discovery in Slovakia. These results, combined with gold price movements, warrant an upgrade in our preliminary valuation of the Slovakian gold discovery alone from 13p to 20p. The company’s activities in Cyprus and Georgia are lower priority but progressing steadily. EMED Mining’s 32% share in AIM-listed KEFI Minerals is looking increasingly attractive as the drills continue to turn in Turkey. Research type: Quarterly Update - Trading update |
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| Apr 02 2008 |
De-risking growth Redstone management has completed a phase of restructuring to create a profitable integrated IT and communication solutions provider as a platform for organic and acquisition-enhanced growth. A healthy pipeline of new contracts and a high proportion of recurring revenue underpin our forecasts. We believe Redstone will continue to deliver upside from the newly expanded Converged and Managed Solutions offerings. The shares are undervalued. Research type: Quarterly Update - Trading update |
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| Apr 01 2008 |
Housing blues The delayed launch of Home Information Packs (HIPs) caused a disappointing loss in 2007. Nevertheless, Network Data Holdings (NDH) has strong market positions in essential areas of the housing market. When the housing market begins to get over the credit crunch and NDH’s earnings visibility improves, the shares offer substantial recovery potential. Research type: Review - Full year results |
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| Apr 01 2008 |
Refinancing relief Final results, which were in line with analyst estimates, and news of refinancing of the group’s debt remove a large part of the uncertainty hanging over the share price. The focus should now switch back to the business; although markets are undoubtedly getting tougher, the underlying businesses have strengths that merit a higher rating. Research type: Update - Full year results |
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| Apr 01 2008 |
Trading on track Focus Solutions has confirmed that FY08 trading is broadly in line with expectations. More importantly, both the HSBC programme and the announced contract with a major European IT company add further support to forecasts. Given a P/E below 6x, the share price undervalues the organic growth prospects of the group and the scope to scale the business significantly through acquisition. Research type: Update - Trading update |
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| Mar 31 2008 |
Speciality focus expands Maelor has reached the next stage in its evolution as a speciality pharma company, last week announcing the £14m acquisition of Speciality European Pharma International AG (SEP International), giving it worldwide rights to Haemopressin, and a £10m fund-raising. The combined business will be renamed IS Pharma. The takeover expands Maelor’s international dimension, and the company will continue to market its products directly in the UK while using distributors in European markets. Research type: Outlook - Acquisition |
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| Mar 31 2008 |
Commercial year The key takeaway from the 2007 results is that Oxford Catalysts (OC) has made significant steps towards commercialising its IP. The quantitative measure of the number of NDAs/MTAs doubling from 40 in 2006 to 80 in 2007 does not capture the improved quality of conversation the management team is now engaged in with major oil and FMCG groups. OC’s brand is now well established with these majors and a significant pipeline of newsflow augurs well for 2008. If 2007’s highlights were the Novus Energy licensing deal and the signing of an MOU for the Instant Steam product with a global FMCG group, we suspect 2008’s new product areas are likely to revolve around small scale Fischer-Tropsch catalysts (FT). Research type: Quarterly Update - Full year results |
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| Mar 31 2008 |
Business builder Since its founding in 2002, XL TechGroup (XLT) has set up five businesses using its company creation methodology, developed over the last 15 years by the current management team. Of these, two have listed in London: AgCert, which is in Irish Examinership; and TyraTech, which is trading close to its June 2007 IPO price. Management is budgeting for licensing and co-development deals, and/or third party investments for the other businesses for this year. Provided such events are achieved, XLT believes that the company will have sufficient resources to fund the overall business in 2008. Research type: Outlook - Initiation of coverage |
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| Mar 31 2008 |
Transforming acquisition Animalcare Group plc listed on AIM on 15 January following Ritchey’s acquisition of Animalcare Ltd for an initial £13.4m (with a possible maximum deferred payment of £0.2m) and subsequent name change. This was effectively a reverse takeover, a move that should improve the profile and liquidity in the stock and the earnings’ quality, as well as strengthening management resource. Research type: Outlook - Interim results |
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| Mar 31 2008 |
Good final results Essentially’s final results were well in line with the forecasts published in our Review of 1 February. In less than two years management has built a sports marketing and media business with leading positions in rugby and cricket. We expect it to continue to progress in 2008, helped by a full year contribution from acquisitions and the fact that a significant proportion of revenues are forward contracted and visible. Research type: Quarterly Update - Full year results |
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| Mar 28 2008 |
Out of the ashes... H R Owen has emerged from its fundamental restructuring with an impressive set of results. While last year’s performance will be difficult to beat in the immediate future, the group is now looking forward. The acquisition of a substantial minority stake in the group by Bentley Cars reduces the uncertainty, providing management with the opportunity to invest in the next stage of development from a position of confidence. Research type: Review - Full year results |
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| Mar 26 2008 |
Pythagoras’ theorem Recruitment is picking up into the crucially important US registration trial (codenamed PYTHAGORAS) of the Aorfix stent graft for abdominal aortic aneurysm. Lombard has set itself a tough target of completing recruitment by November to allow for a regulatory submission in mid-2009 and a US launch around a year later. This year it aims to identify and begin talks with potential US partners. Research type: Update |
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| Mar 26 2008 |
Relaunch and recovery At a prospective EV/EBITDA of 4.0x, SMC’s valuation leaves considerable upside potential versus our fair value estimate of 14.0p based on peer group multiples and our DCF valuation. The rating still reflects market scepticism over group financing. Our work suggests there are four key factors that determine the rating of a professional services stock: 1) balance sheet structures, with investors being averse to high gearing; 2) growth, especially in cash flows; 3) management quality; and 4) scale and liquidity. Steps to address all of these are being taken, the open offer restoring the group’s financial health and a credible new management team demonstrating growth in revenues and EBITDA. Ultimately we believe this will translate to a fairer rating. Research type: Outlook |
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| Mar 25 2008 |
Political concerns Reports emanating from the Puntland capital Garowe coupled with announcements from both Range Resources and the transitional federal government (TFG) of Somalia continue to reinforce our view that political concerns are the key risk factor in the Range Resources’ value proposition. Research type: Flash note - Political concerns |
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| Mar 25 2008 |
Growing interest Intercytex, a UK company focusing on wound healing and aesthetic surgery, offers investors the prospect of near-term revenue generation in a sector that is seeing growing interest from mainstream pharma. Its investment case rests on differentiating its cellular technologies from competitors on the basis of efficacy and ease of use and manufacturing, and being able to partner with key industry players. Research type: Company Comment - Full year results |
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| Mar 25 2008 |
Broader attraction With another set of encouraging results, Acta has built a solid track record of delivering to planned perfomance. During 2007, the company developed its core technology to apply it to a much wider range of applications. With the first contract addressing several of these sectors, we expect further contracts to widen the potential revenue base, and to keep it on target to reach break even. Research type: Outlook - Full year results |
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| Mar 25 2008 |
Qualities not recognised The Lookers share price has underperformed badly over the past 12 months reflecting a combination of fears about consumer spending trends and difficulties at sector leader Pendragon. At its present level, the share price fails to recognise the quality of management inherent in the consistent record going back several years or the underlying quality of earnings within the more successful motor distributors. Research type: Outlook - Full year results |
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| Mar 18 2008 |
Liquidity event ahead? With at least one company in its investment portfolio ready for flotation if market conditions permit, a major liquidity event – IPO or trade sale – in 2008 could validate Amphion’s business-building methodology with a broad spectrum of public investors. In particular, the possibility of the trade sale of a portfolio company, on which management has already had preliminary approaches, offers the possibility of an immediate return to investors in the form of a one-off dividend payment. Research type: Update - Full year results |
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| Mar 18 2008 |
Following the light Management has delivered financially and commercially since float. Its LED light engine provides a step change in performance evidenced by the sign up of 16 distributors and our forecast of 10 customer product launches in FY08. The market opportunity is substantial, interest from the major lighting companies is growing and the business model is increasingly scaleable. We show a range of revenue scenarios for FY09 with the upper end translating into an equity value of over 200p. Research type: Review - Full year results |
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| Mar 18 2008 |
Undervalued commodity Established in 1985, and with a number of blue chip customers, Brady has a long track record of delivering software solutions to the commodities markets. The new management team is seeking to invest in sales and marketing, accelerate growth and boost the company’s profile. Management aims to significantly accelerate annual licence wins, and the current enterprise value of c £6m could significantly undervalue the opportunity given the market size and scope for acquisitions. Research type: Company Comment - Full year results |
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| Mar 18 2008 |
Varisolve study data Data published yesterday show that 28 patients have been successfully treated in the Varisolve safety study without any adverse effect. Recruitment of the 50 patients needed to show safety remains on track to finish by mid-2008. Completion of the trial should remove a major uncertainty that has depressed the shares. Research type: Update - Trial update |
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| Mar 18 2008 |
Momentum builds A fluctuating share price stems from the announcement of and subsequent cessation of takeover talks. More fundamentally, Mediwatch was profitable during the six months to October 2007 with the promise of further growth in the short and medium term. The rate of revenue expansion remains difficult to predict, but if management objectives can be delivered, the shares will prove distinctly undervalued. Research type: Outlook - Full year results |
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| Mar 17 2008 |
CSD approval nears Despite an unexpectedly drawn-out regulatory process, a decision on Futura’s CSD500 condom at last looks imminent and, if approved, would make a commercial launch possible in the second half of this year. Meanwhile, GSK’s exclusivity on the TPR100 topical pain relief product finishes at the end of the month, representing a potential trigger for the long-awaited licensing deal. Futura is therefore in a relatively strong position with two potential value-enhancing events on the horizon. It is sufficiently well financed, especially if these events come to pass, to look at acquisition opportunities in the sector. Research type: Company Comment - Full year results |
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| Mar 17 2008 |
Progress at Salvador While we continue to wait for approval at Canastra, prospects at Salvador 1 continue to move forward. On 26 February the company reported that diamonds had been found in both the kimberlite and the sand and gravel topsoil at Salvador. In the bulk sampling project, 66 diamonds totalling 7.78 carats were found while top soil sampling has revealed 124 diamonds totalling 17.86 carats. These are partial results, in that much of the ore remains to be processed while some of the processed ore is to be reprocessed, which leaves the potential to increase the scale of the find. The three recent drill holes confirm that the kimberlite goes down at least to 200 metres below the surface. Research type: Update - Exploration update |
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| Mar 14 2008 |
Property slippage In its trading update released last Friday, Sigma announced that it now expects its seventh property partnership to close in April, rather than January as previously anticipated. In addition, fair value adjustment of investments under IFRS is now expected to be a negative £0.2m versus a small gain. These two items affect both pre-tax profit and EPS for 2007, with the result that our estimates now show only a marginal change on the previous year. On the company’s fund management front, management is confident of adding additional limited partners in its newest fund over the coming months. We are maintaining our 2008 estimates, but keeping them under review. Research type: Quarterly update |
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| Mar 14 2008 |
On the shoulders of super majors Ready to drill, high impact exploration acreage with billion barrel potential is hard to come by in the junior oil and gas space. The potential value of Range Resources’ portfolio of exploration assets inherited from super major oil companies sets it apart from many other AIM-listed explorers. Operations, located in an autonomous region of Somalia, come with inevitable political concerns. However, a stable government, a drilling programme planned for 2008 and attractive farm-in terms, mean that the potential upsides more than compensate for downside risks. Research type: Outlook |
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| Mar 13 2008 |
More to come WIN recently announced year-end results that met market expectations. Following a period of significant internal reorganisation and three acquisitions, WIN has developed from a small national business delivering alert services (PRS/SMS) into a comprehensive service provider and partner of Mobile Network Operators (MNOs) and Internet Service Providers (ISPs) across Europe delivering end-to-end rich media mobile solutions. This strategy will secure higher margins and greater profitability and leaves WIN well positioned to deliver on FY08 forecasts and multiples of less than 6x FY08 and 5x FY09 looks too cheap. Research type: Company Comment - Full year results |
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| Mar 13 2008 |
Better betting Betbrokers has made significant operational progress over the past six months, growing the UK betting brokerage business, acquiring the Winning Edge sports handicapping service and broadening the product range. It is now reaching critical mass (albeit later than originally forecast) and should move into profit during 2008. Today’s loan note and share placing has raised additional funds for future growth. Research type: Quarterly Update - Fund-raising |
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| Mar 13 2008 |
Food inflation beneficiary At the moment, IAWS seems to be making the best of both worlds: its Lifestyle Food group has been able to pass sufficient raw material price increases to its customers to increase margins, while its Origin subsidiary is a beneficiary of higher demand for increasingly expensive agricultural products. While we think that a consumer slowdown represents a real threat in the medium term, we see IAWS as an attractive play due to its defensive qualities. Research type: Company Comment - Interim results |
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| Mar 12 2008 |
Cerepro data in July Ark Therapeutics’ European Phase III trial of Cerepro, its gene-based therapy for glioma, now looks almost certain to render preliminary results immediately following its scheduled DSMB meeting in late June, with final audited results in July. If successful, this trial will be a defining event for Ark Therapeutics and the field of gene therapy generally. Publication of the full dataset is possible at the European Association of Neuro-Oncologists in September. Research type: Company Comment - Full year results |
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| Mar 12 2008 |
Smooth sailing An excellent set of results reflect a problem-free year with high fleet utilisation and a strong recovery in gross margins. Hallin Marine looks set for another step up in profitability in 2008 as the size of its fleet grows further and its Engineering division delivers its first sales. After a material earnings upgrade, the valuation looks cheap. Research type: Review - Full year results |
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| Mar 12 2008 |
Legal resilience Management comfortably exceeded its margin target in meeting our profit forecast. Investors still remain concerned about the outlook for legal IT spend against a backdrop of a fall-off in M&A and IPO transactions. While the shape of UK fee income for this year is less certain, we believe Tikit has a strong and resilient position in a long-term growth market. In our view, evidence throughout this year – that the group can sustain organic growth and generate cash – can support a return in the shares back towards 300p. Research type: Outlook - Full year results |
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| Mar 12 2008 |
Spectroscopic expertise Avacta is developing a series of automated bioanalytical instruments of broad utility in a number of sectors. These are based on its leading expertise in a variety of disciplines, including Raman spectroscopy, and it has developed a low-risk business model through the provision of both contract services and instruments to partners. We believe it can reach profitability in 2010 without the requirement to raise additional cash, subject to meeting several key targets. Research type: Outlook - Initiation of coverage |
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| Mar 11 2008 |
Cancer focus emerges Sareum has evolved from a structure-based drug discovery services business into an early-stage biotech company focused on oncology. It has used its expertise in structure-based drug design to identify ‘best in class’ compounds that address a number of novel but well-validated kinase drug targets in cancer. Sareum hopes to conclude licensing deals for one or more of these programmes in the short term to provide capital to allow it to further develop other internal candidates. Research type: Company Comment - Interim results |
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| Mar 11 2008 |
Undervalued The Molins share price has naturally reacted adversely to last year’s problems in Canada, but the true underlying value is being totally ignored. There is a strong balance sheet and a high service content to earnings to counter the capital goods cycle. With a clear strategy to lift both the quality and quantity of earnings in each division, the shares offer significant medium term potential. Research type: Review - Full year results |
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| Mar 11 2008 |
Wrong price In our view the further pull-back in the shares is discounting major growth and cash flow concerns. However, FY07 was a record year, management is addressing the Q4 issues and we are forecasting a further 35% underlying revenue growth this year. Management does need to demonstrate that it can translate this growth into an expansion in margins and cash flow but a valuation of 0.2x EV/sales significantly undervalues the prospects and risks. Research type: Review - Full year results |
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| Mar 11 2008 |
Meeting expectations Consumer spending fears and poor results from sector leader, Pendragon, have undermined the recent share price performance of Vertu Motors. However, the group remains on course to deliver in line with immediate expectations and now has a hand-picked and highly experienced team in place to sustain this progress into the future. Vertu Motors is a real business with real potential. Research type: Quarterly Update - Trading update |
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| Mar 11 2008 |
Negotiating position strengthened The £10m Alizyme raised last week gives the company sufficient cash to last well into 2009, as well as strengthening its hand in discussions with potential licensing partners. Its investment case still rests on its ability to strike one or more licensing deals on its late-stage products, preferably with significant big pharma players. Research type: Company Comment - Full year results |
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| Mar 11 2008 |
Mounting momentum 2007 results reflect the increasing impact of the in-house consultants known as ‘Mounties’ on the top-line and their consequent positive impact on margins. Having recently raised our profit and EPS estimates, the shares now occupy a significant discount to the peer group and the logic for a re-rating is becoming more compelling. The investment case is underpinned by strong cash flow and a growing dividend yield. Research type: Outlook - Full year results |
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| Mar 10 2008 |
Still motoring in 2008 Inchcape shares have come back by a third from their 2007 peak, in sympathy with UK motor dealership groups and fears engendered by global warming and the credit crunch. Such fears represent an opportunity and a challenge for which management seems well prepared, with a clear strategy for growth. The rating of the shares is weighted too heavily towards its UK operations rather than the group’s true merits. Research type: Company Comment - Full year 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
Director, Fyshe Horton Finney