Iofina (IOF) : Corp

IofinaEX hemp seed investment

Key data

  • Share price (p) 23.0
  • Target price (p) 35.0
  • Market cap (£m) 44.1
  • Enterprise value (£m) 50.3

IofinaEX is investing $900k into an organic hemp seed manufacturing facility owned by its Chairman. This short-term working capital investment into Organic Vines is expected to generate a rapid and strong return and sets a framework for a future relationship that will provide a steady source of hemp seeds for IofinaEX’s CBD extraction operations. Our end-2019 net debt forecast rises as a result of the investment, but assuming a successful crop 2020 profits and net debt improve materially. It is still early days in IofinaEX’s CBD ambitions, but this first investment highlights the potential materiality of this division.

Jonathan Wright 020 7220 0543 jwright@finncap.com

Mothercare (MTC) : Corp

A critical baby step to become the comeback kid

Key data

  • Share price (p) 9.5
  • Target price (p) U/R
  • Market cap (£m) 35.5
  • Enterprise value (£m) 67.3

Consistent with its commitment to do so in May, MTC has delivered on the final steps toward completing its transformation by the end of 2019. The decisive action of putting the loss-making UK business into administration facilitates MTC’s transformation potential. A key three-month transition period now follows, before the new operating model is stabilised, but this definitive move shows that MTC is evolving into an asset-light brand orchestrator which, in turn, should have important positive long-term implications for sentiment, forecasts and valuation.

Peter Smedley 020 7220 0548 psmedley@finncap.com

InnovaDerma (IDP) : Corp

AGM – strong start to the year

Key data

  • Share price (p) 79.0
  • Target price (p) 200.0
  • Market cap (£m) 11.5
  • Enterprise value (£m) 9.4

InnovaDerma provided a trading update for the first four months of the year with revenues up 38% over the comparable period, benefiting from a full contribution of Skinny Tan in Boots stores, which was launched in March 2019. This is in line with our expectations for full-year revenues of £15.8m, an increase of 23%. We are not making any changes to forecasts, although point to the upcoming (Q1 2020) launches of a new product category into Superdrug stores and Growlase in the US during FY 2020 that have not yet been included. We reiterate our 200p price target, acknowledging also the value that a new product category has in reducing the current portfolio concentration and de-risking revenue growth.

Mark Brewer 020 7220 0556 mbrewer@finncap.com

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