Best of the Best (BOTB) : Corp

H1FY20 = another positive surprise. Raising forecasts again.

Key data

  • Share price (p) 400.0
  • Target price (p) 490.0
  • Market cap (£m) 37.5
  • Enterprise value (£m) 35.0

BOTB has delivered better-than-expected H1FY20 results. To reflect the strong H1 performance and the “encouraging” momentum into H2, we raise both our FY20 and FY21 PBT forecasts by +18% and +25% to £2.6m and £3m, respectively, having only recently upgraded them, quite significantly, in November. We raise our TP to 490p, reflecting our conviction that, if BOTB continues to execute well, then there still remains good scope for further positive profit forecast upgrades.

Peter Smedley 020 7220 0548

discoverIE (DSCV) : Corp

On track for the full year

Key data

  • Share price (p) 574.0
  • Target price (p) 641.0
  • Market cap (£m) 509.1
  • Enterprise value (£m) 587.5

Q3 saw continued good trading momentum in Design & Manufacturing (c.80% of group profits) with +7% organic sales growth (in line with H1). Custom Supply saw weaker conditions as customers destocked but activity is now back to higher levels and there remains a pipeline of further acquisition opportunities. We have upgraded our target price to 641p on the back of higher peer group valuations and reiterate our view that the strategic focus on renewable energy, medical, transportation and industrial and connectivity provides continued strong growth prospects.

Guy Hewett 020 7220 0549

Pebble Beach Systems (PEB) : Corp

Strong trading update highlights strong return to growth

Key data

  • Share price (p) 6.4
  • Target price (p) U/R
  • Market cap (£m) 7.9
  • Enterprise value (£m) 16.3

Pebble Beach Systems has released a trading update for the year to December 2019, confirming a strong year for the broadcast playout automation vendor. Revenue is expected to be £11.2m, achieving nearly 22% growth (FY18: £9.2m), converting to adj EBITDA of £3.5m, a YoY lift of c.25% (FY18: £2.5m). Notably, the group has successfully delivered financial growth whilst simultaneously executing its restructuring plan, initiated in 2018, underpinning the realigned operational strategy and building momentum of the company. Furthermore, the strong progress of FY19 has delivered good operating cash generation, easing net debt to £8.4m, an improvement of 10% (FY18: £9.4m; FY17: £10.3m), and management guides to ongoing improvements in its debt position. Pebble Beach Systems enjoys industry recognition among broadcasters worldwide, and ongoing investment into the product suite is expected to drive further traction. We look forward to further details at prelims in March.

Hayley Palmer 020 3772 4681

ANGLE (AGL) : Corp

Interims in line – key upcoming value inflection points

Key data

  • Share price (p) 73.0
  • Target price (p) 135.0
  • Market cap (£m) 126.1
  • Enterprise value (£m) 105.7

ANGLE reported an adjusted net loss of £5.1m (+24% vs. £4.1m), with establishment revenues increasing 47% to £0.4m. Net cash at 31 October was £20.4m, before a c.£1.9m R&D tax credit that is expected shortly. This implies an unchanged cash runway into at least mid-2021, beyond significant value inflection points due this year. 2020 is expected to be a pivotal year for ANGLE, with the prospect of FDA clearance for Parsortix in breast cancer in Q3 2020. Additionally, we expect the data readout for its optimised ovarian cancer assay in mid-2020, which should allow a Laboratory Developed Test (LDT) by the end of the year. We are leaving our forecasts unchanged with 30 April 2020 cash of £12.8m and reiterate our risk-adjusted DCF target price of 135p.

Mark Brewer 020 7220 0556

Belvoir Group (BLV) : Corp

Comfortably ahead

Key data

  • Share price (p) 148.0
  • Target price (p) 238.0
  • Market cap (£m) 51.9
  • Enterprise value (£m) 58.8

In a positive year-end update, Belvoir has detailed FY 2019 sales growth of +43% driven by +6% in the Property division and +148% in Financial Services. Given the twin challenges of the tenant fee ban and political and economic uncertainty around Brexit, we view this as a very strong result, evidencing the success and potential of the strategy. Cash flow has remained strong with net debt at December 2019 of £6.9m (our forecast £7.9m). We have upgraded our FY 2019 EPS by +5.5%, our target price from 194p to 238p and highlight that with the potential for better market conditions post the election and the benefit of the Dacres deal (Financial Services) and the acquisition of Lovelles (estate agency network) to come there remains the potential for positive surprises.

Guy Hewett 020 7220 0549

Aukett Swanke (AUK) : Corp

Significant turnaround

Key data

  • Share price (p) 2.0
  • Target price (p) U/R
  • Market cap (£m) 3.2
  • Enterprise value (£m) NM

The final results reflect a major financial turnaround as the group returned to profit in the second half with all three geographic hubs in profit. With a combination of a leaner business following last year’s cost initiatives, the recent disposal of the loss-making Moscow operation and a better market backdrop, the statement confirms that the group is confident about growing profitability in the current year. However, at this early stage, our forecasts remain under review.

Mark Paddon 020 7220 0541

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