Trackwise Designs (TWD) : Corp

Acquisition and placing

Key data

  • Share price (p) 88.5
  • Target price (p) 180.0
  • Market cap (£m) 19.6
  • Enterprise value (£m) 17.7

The company has announced the acquisition of Stevenage Circuits Ltd for £2.5m an established manufacturer of flexible and rigid PCBs that offers an immediate scale up opportunity and frees up capacity for the expected ramp up in IHT demand. The company also raised £5.87m via a placing at 80p to pay for the acquisition, additional equipment and working capital. The acquisition and placing together are expected to be 2% EPS accretive in the current part year and 15% accretive in its first full year.

David Buxton 020 7220 0542

Independent Oil & Gas (IOG) : Corp

Market update

Key data

  • Share price (p) 11.8
  • Target price (p) 60.0
  • Market cap (£m) 56.4
  • Enterprise value (£m) 35.4

IOG’s market update not only reminds us of its strong attractions in the current oil price environment, but reinforces the strength of its management team, which continues to deliver on IOG’s promise. Its fully-funded Southern North Sea Core Project is progressing well, with key milestones on track. Management is not resting on its laurels either and is actively pursuing portfolio development activities from a position of strength. Gas prices are weak, but this is coronavirus and seasonally warm weather related. Structurally, the UK gas market remains robust and IOG’s Core Project has a low gas price breakeven. Better still, production is not expected to start up for another 18 months, plenty of time for prices to recover. In the meantime, service sector contract rates are only moving one way, and IOG is perfectly positioned to lock in bottom-of-the-cycle drilling costs with its multi-well development programme.

Jonathan Wright 020 7220 0543

Europa Oil & Gas (EOG) : Corp

Board changes announced

Key data

  • Share price (p) 1.1
  • Target price (p) 12.5
  • Market cap (£m) 4.7
  • Enterprise value (£m) 1.8

Europa has beefed up its Board to help it pursue lower-risk appraisal opportunities to fulfil its ambition to develop a third leg to its current portfolio. Europa is due to report interim FY 2020 results on 14 April, where we expect an update on the Wressle development timing and progress; we currently expect this field to come on-stream in Q3 2020. Europa has been unfortunate with its timing on this development; after finally winning development approval, oil prices have collapsed. Still, we estimate this asset has a breakeven below US$20/bbl and even in the current environment will deliver valuable free cash flow.

Jonathan Wright 020 7220 0543

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