InnovaDerma (IDP) : Corp

New category launch in Superdrug stores

Key data

  • Share price (p) 75.0
  • Target price (p) 200.0
  • Market cap (£m) 10.9
  • Enterprise value (£m) 8.8

Further to the disclosure at its FY 2019 results on 24 September that it planned to launch an innovative new topical product in H2 FY 2020, InnovaDerma confirmed the timing of the launch and announced that it will initially be exclusive in c.800 Superdrug stores as well as through InnovaDerma’s DTC platform. The brand name and product category, estimated by the company to be worth in excess of £80m in the UK, will be disclosed closer to the launch date. We are making no changes to FY 2020-21 forecasts, pending clarification of brand category and initial stocking orders, but the product provides potential upside to our forecasts. We reiterate our 200p price target, acknowledging also the value that a new product category has in reducing the current portfolio concentration.

Mark Brewer 020 7220 0556

KRM22 (KRM) : Corp

Business update

Key data

  • Share price (p) 51.5
  • Target price (p) 100.0
  • Market cap (£m) 9.8
  • Enterprise value (£m) 10.5

Following on from the milestone Enterprise Risk Cockpit contract win in September, KRM22 has announced three new customer wins: a quantitative investment firm, a futures broker in Singapore and an Australian firm, to use KRM22’s Irisium market surveillance, risk monitor application, and Enterprise Risk Cockpit, respectively. KRM22 has also renegotiated a contract with an existing customer. Together, these contracts have led to ARR of £4.3m (FY19E: £4.95m), from £4.1m at interims, rising to £4.4m in 2020 (FY20E: £7.4m). We also note the global profile of the new customers, representing KRM22’s first entry into APAC, as the Global Risk Platform gains traction worldwide. Following a busy 1H19 in terms of partnerships and acquisitions, the board has decided to postpone any further investments until 2020, when economic and political uncertainties are expected to resolve. Until this time, management’s focus is on growing organic revenues, continuing to convert the sales pipeline and optimising cash flows. An R&D tax credit award of £0.6m will further support near-term funding of operations. Furthermore, the decision to withdraw from a number of operations is expected to deliver £1.0m in cost savings in FY20, with no loss to revenue. We upgrade forecasts accordingly with consequently positive FY20 EBITDA and improvements to cash expectations, both of which flow through to FY21 (EBITDA +100%). Target 100p reiterated.

Andrew Darley 020 7220 0547

PPHE Hotel Group (PPH) : Corp

Benefit of repositioning coming through

Key data

  • Share price (p) 1 840.0
  • Target price (p) 2 239.0
  • Market cap (£m) 779.0
  • Enterprise value (£m) 1 490.0

PPHE has confirmed that following a solid performance in Q3, the board anticipates that the full-year results will be in line with its previous expectations. Q3 like-for-like RevPAR increased by 3.9%, driven by the benefit from recently completed major repositioning projects and strong trading in the UK. We leave our forecasts unchanged and continue to highlight the gap from the share price of 1,840p to the NAV per share (supported by independent valuations) of 2,552p.

Guy Hewett 020 7220 0549

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