Anglo African Oil & Gas (AAOG) : Corp

Proposed fundraise

Key data

  • Share price (p) 5.2
  • Target price (p) 27.0
  • Market cap (£m) 20.6
  • Enterprise value (£m) 5.3

AAOG has received commitments to raise up to £8.25m via a placing and equity-sharing agreement at 5.2p to fund a sidetrack of the TLP-103C well to target production from the Djeno reservoir, known to produce at rates up to 5,000 bopd on neighbouring fields. The resulting higher share count and a later production start-date sees our risked-NAV fall to 27p/sh. However, if successful, the Djeno will deliver material free cash flow and, over time, allow a meaningful dividend to be paid.

Jonathan Wright 020 7220 0543

Filtronic (FTC) : Corp

FY 2019 in line as critical coms opportunities grow

Key data

  • Share price (p) 9.1
  • Target price (p) 10.5
  • Market cap (£m) 19.0
  • Enterprise value (£m) 16.7

This is an encouraging update from the global designer and manufacturer of antennas, filters and mmWave products for critical coms and wireless telecoms markets. A solid (albeit loss-making) H2 performance will see FY 2019 broadly in line with our forecast, boosted by stronger than expected H2 cashflow and balance. The telecom antenna business – currently under strategic review – continues to struggle due to the previously flagged lower demand for Massive MIMO from a particular OEM customer as a consequence of ongoing M&A amongst US telecoms customers. However, good opportunities continue to arise in the public safety, defence and aerospace (critical coms) markets; 5G E-band backhaul sales are encouraging, with strong growth continuing into FY 2020 leading to capacity expansion in Sedgefield; and the company is launching a new product range targeting the flourishing US small-cell market. However, the positive outlook is shaded by less welcome news of a performance issue on certain old antennas still under warranty (not current products). The extent and cost of fixing it is still unknown but it is likely to see an exceptional and some cash impact in FY 2020.

Lorne Daniel 020 7220 0545

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