reports
- Andy Smith
CORPORATE SPONSORED MATERIAL: Aggregated Micro Power* (AMPH LN, BUY, T...
Aggregated Micro Power Holdings (AMPH) is emerging as a challenger utility presenting a unique investment opportunity. It is essentially an asset play offering exposure to a diverse stream of energy related revenues taking advantage of the fundamental changes in the UK energy sector as it strives to meet its legally binding CO2 emission targets. Revenues are forecast to grow from £19.7m in FY17 to £70m by FY21 and for EBITDA to reach £4m by FY21. In addition to earnings growth it is also c...
- Harvey Robinson
Actual Experience 2nd large scale deployment with 2nd Channel Partner
Actual Experience (Buy PT 450p) has announced that it has received another order for the full-scale deployment of its software within a large enterprise customer of another one of its four Channel Partners. We retain our Buy rating and 450p price target.
- Michael Campbell
UK Gambling - FOBT regulation bites
In our initiation report on UK Gambling on 11 December 2017, we referenced likely volatility in share prices as a result of the uncertainty surrounding B2 staking levels. UK media, citing the Chancellor is in favour of a £2 stake on B2 (FOBT) machines, and that the Treasury is close to a deal with the Department of Culture, Media and Sport (DCMS) and is seeking tax neutrality.
- Michael Campbell
Playtech (PTEC LN, BUY, T/P 972p) - Update | Machine & Online Opportun...
The SNAI deal improves PTECs regulated profile where we estimate that over 70% of EBITDA will come from regulated markets by the end of FY19e. The deal is expected to complete in two steps by the end of 2018. We expect to see the enlarged group generate revenue of c. €1.9bn and EBITDA of c. €516m in FY19e.
- Jessica Saadat
Faroe Petroleum (FPM LN, BUY, T/P 142p) - Update | Updating Model
We update our model for recent news flow which increases RENAV from 124p to 142p. Although the upside to our PT (set at RENAV) is only 12%, we believe the recent stake building by DNO should limit the downside, and hence believe the risk reward profile given organic and inorganic growth options is still attractive. News flow is limited over the next 6 months so short term the share price may drift, but we expect E&A drilling to ramp up again in Q418.
- Tony Shiret
- Jessica Saadat
CORPORATE SPONSORED MATERIAL: Trinity E&P* (TRIN LN, BUY, T/P 33p) - U...
Trinity released its Q1 production update this morning. Production is broadly flat qoq as RCP activities have been lower as Trinity switched focus to drilling two onshore wells, which should bolster production going forward. Trinity also continues to pay down its liabilities ahead of schedule and increased its cash position. We don’t make any changes to our RENAV of 33p. We remain with our BUY recommendation, as we believe the share price discount to RENAV is excessive given stable production,...
- Michael Campbell
Playtech (PTEC LN, BUY, T/P 950p) - Update | Going vertical
PTEC announces the proposed acquisition of Snaitech S.p.A a leading gaming and betting operator in the Italian market for a consideration of €846m funded by existing cash and debt. The deal appears profit enhancing on first take at 6.2x EBITDA (c. 5.8x post €10m synergies), PTEC on c. 7x FY18 EBITDA. Two stage deal: initial acquisition (70.6%) expected to complete in the 3Q18 and final transaction (29.4%) to complete in the 4Q18.
- Michael Campbell
GVC (GVC LN, BUY, T/P 1285p) - Update | Under-promise and over-deliver
New enlarged GVC is a business with substantial depth and breadth by product, channel and geography, with its own proprietary technology to boot. We estimate the new business will generate c. £3.5bn of revenue and c. £900m of EBITDA in FY19E. Our forecasts include guidance from management on staged synergies (£7m, £33m, £56m and £100m year four). We think this is a case of under-promise and over-deliver as management has a track record of integrating businesses (Sportingbet & Bwin.Party), ...
- Tony Shiret
Next (NXT LN, SELL, T/P 3700p) - Post Results: Hard Work
We look at Directory/Online relative under-performance in the UK online clothing market and consider the implications for future recruitment behaviour. Next continues to run this business to maximise returns from existing customers. With its Retail business going backwards rapidly and an already-high EBIT margin in ND/NO Next needs to change its behaviour in terms of growing its sales base more rapidly online in our opinion. We are not sure this will happen. We retain our sell rating.
- Robin White
CLS Holdings* (CLI LN, BUY, T/P 310p) - Initiation | Proactive Strateg...
CLS Holdings, the FTSE 250 commercial property company with a £1.8bn office portfolio in the UK, Germany and France, reported very strong 2017 results. The sale of the Vauxhall Square development site for £144m and the Metropolis portfolio acquisition in Germany for £140m were transformational events. The Group has an outstanding NAV growth track record and there is significant potential for the Group’s outperformance to continue. We initiate coverage with a Buy recommendation and a target ...
- Harvey Robinson
Ceres Power (CWR LN, BUY, T/P 20p) - Positive technology update- Buy P...
Ceres Power has today made a positive announcement with regard to its technology roadmap, and highlights the significant progress they are making towards commercialisation, in a number of significant markets. We continue to believe that Ceres will provide a crucial piece of the EV (Electric Vehicle) jigsaw, by providing clean charging overnight at home, and also significant benefits to data centres, residential in general, and commercial applications. Retain Buy 20p price target.
- Michael Campbell
Playtech (PTEC LN, BUY, T/P 861p) - Update | Looking for a significant...
Management flagged M&A when presenting final results with a focus on regulated markets. Also flagged comfort with leverage of 1-2x Net debt/EBITDA. On our FY18E EBITDA forecast of €341m and with forecast net cash of €356m it implies taking on debt of up to c.€1bn. Adding in the liquid holding in Plus500 and LCL LN (£345m) of €390m would give PTEC up to c. €1.6bn of firepower for M&A. A debt funded deal in regulated gaming would increase earnings between 31% and 42%, demand a higher ra...
- Andy Smith
RTC Group* (RTC LN, BUY, T/P 95p) - 2017 Prelims | Adjusted PBT ahead ...
Adjusted PBT at £1.5m for the 12 months ended December 2017 represented growth of 22% and was ahead of our expectation of £1.4m. In turn, this supported dividend growth of 13% against an expected 6%. Net debt was £4.4m though allowing for an unwind in receivables of £1.5m in January 2018, the underlying net debt position represents a significant improvement on the December 2016 position. *Whitman Howard acts as corporate broker to RTC Group
- Michael Campbell
- Michael Campbell
Playtech - Update | FY17A results – going looks tough
Group revenue c. 3% below our forecast at €807m, Gaming underperformed by 2% at €722m( casino -2%, services -8%, sport -3%), and Financial by -14% at €85m). EBITDA c. -4% below our forecast at €322m and EPS was -12% at 66.8c (WH 75.9c).
- Michael Campbell
Veltyco Group* - Initiation | Strong 2017 sets foundation for future y...
Veltyco Group is active in the marketing and promotion of online gaming brands in the real money gaming industry (RMG), through its well established affiliate network and SEO partners. Additionally, the group is building a portfolio of owned and operated brands. The group produced a year of impressive growth in FY17, where management confirmed revenue in excess of €14.5m, +138% YoY and EBITDA in excess of €8m, an increase of almost 4x compared to FY16. *Whitman Howard acts as broker to Velt...
- Jessica Saadat
Faroe Petroleum (FPM LN, BUY, T/P 125p) - Update | Operational update
Faroe release its FY 2017 operational update this morning, which looks broadly inline with our model, so we don’t expect to make any major changes to our RENAV of 125p. Given a strong balance sheet, several wells drilling in 2018 and good progress on developments so far, we remain with our BUY recommendation.
- Jessica Saadat
Faroe Petroleum (FPM LN, BUY, T/P 125p) - Update | Upgrade to BUY
Faroe Petroleum has announced that it has executed a transaction with Suncor Energy Norge AS (‘Suncor’) for the sale of a 17.5% working interest in the Fenja development located in PL586 in the Norwegian Sea. Faroe will receive cash of c$54.5m in exchange for the 17.5% stake.
- Jessica Saadat
Tullow Oil (TLW LN, HOLD, 259p) - Full Year Results | Highlights from ...
Given a detailed January update, we don’t make any material changes to our 2017/2018 numbers post today’s FY results. Our RENAV increases slightly from 256p to 259p, with better YE net cash slightly offset by tweaking our Kenya assumptions.
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