Revolution Bars Group (RBG) :

COVID-19 and bank facility update

Key data

  • Share price (p) 21.9
  • Target price (p) U/R
  • Market cap (£m) 11.0
  • Enterprise value (£m) 28.8

The group has issued a statement providing an update on the initiatives taken so far to manage the business through the COVID-19 crisis. The statement also confirms that subject to final documentation, its bank has agreed a significant increase in its Revolving Credit Facility, which will provide additional liquidity, headroom and financial flexibility to manage the crisis.

Mark Paddon 020 7220 0541 mpaddon@finncap.com

Europa Oil & Gas (EOG) : Corp

Interim results

Key data

  • Share price (p) 1.0
  • Target price (p) 4.6
  • Market cap (£m) 4.6
  • Enterprise value (£m) 3.2

Straight forward, robust results from Europa underline that it is well positioned to ride out the current storm while continuing to progress its strategy, albeit at a slower pace. Some difficult decisions have been made, including cost reductions and licence relinquishments. But these ensure that Europa has the funds to develop the low-cost Wressle oil development onshore UK while still pursuing farm-outs offshore Ireland and Morocco, with both regions continuing to attract interest from a number of potential partners.

Jonathan Wright 020 7220 0543 jwright@finncap.com

Solid State (SOLI) : Corp

COVID-19 YE trading update

Key data

  • Share price (p) 450.0
  • Target price (p) U/R
  • Market cap (£m) 38.2
  • Enterprise value (£m) 35.2

The company has released its year-end trading update, highlighting revenues are in line with expectations, with adjusted PBT 10% ahead of consensus, boosted by a better margin mix. Cash conservation and cost controls are in place to cope with the impact of COVID, but recent cash performance now places them with net cash of £3.0m. The 31 March order book increased 11% to £39.9m, with some order slippage anticipated due to COVID lockdown effects. We remove our forecasts for FY 2021 and price target due to current uncertainties.

David Buxton 020 7220 0542 dbuxton@finncap.com

Telit (TCM) : Corp

Telit protects its earnings during lockdown uncertainty

Key data

  • Share price (p) 116.0
  • Target price (p) 210.0
  • Market cap (£m) 153.9
  • Enterprise value (£m) 115.7

Telit has moved to preserve its profit levels during the COVID-19 pandemic. The widespread lockdown of unknown duration is likely to slow some of its YoY revenue growth, and we trim our FY 2020 revenue expectations, although we do still continue to expect LFL growth (excluding the two months of Automotive in FY 2019). Despite its significant cash reserves from the disposal, management is prudently adopting a cost-reduction plan to ensure the company’s earnings are maintained at the targeted level. Notably this involves a temporary 15% salary reduction for senior management and a reduction in all areas of discretionary spending, including opex and capex. Strategic plans (such as long-term product development and the movement of production outside China) will be unaffected. We are pleased to hear the supply chain remains steady with minimal disruption in module production as the lockdown across Asia is partially lifted. At this stage, we leave FY 2021 forecasts unchanged, given a strong market position.

Lorne Daniel 020 7220 0545 ldaniel@finncap.com    

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