Amino Technologies (AMO) : Corp

Further contract win for 24i

Key data

  • Share price (p) 117.5
  • Target price (p) 215.0
  • Market cap (£m) 89.3
  • Enterprise value (£m) 88.3

Amino’s 24i division has announced a contract win with First Look Media, to power the new streaming video experience for the Topic platform. 24i will enable the launch and management of Topic across multiple platforms, including iOS, Android, Apple TV, Roku and other IP services. 24i also delivers “24i SMART BACKSTAGE”, managing customer insights to give subscribers a high quality personalised streaming service. was launched in North America at the end of November, delivering ad-supported and subscription video. Topic is a studio brand of First Look Media established by eBay founder Pierre Omidyar in 2013. The contract win represents further evidence of the breadth of the Amino group product set, including growth in recurring software revenue; global presence; and the relevance to the focus on streaming OTT TV services, now a necessary element of any platform, new or old.

Andrew Darley 020 7220 0547

Elecosoft (ELCO) : Corp

Cash and diversified offering protects FY 2020

Key data

  • Share price (p) 51.5
  • Target price (p) U/R
  • Market cap (£m) 42.3
  • Enterprise value (£m) 41.2

The release of the audited FY 2019 accounts have been delayed by the COVID-19 outbreak, as with so many other companies. However, this update confirms they show good growth in both turnover, profit and cash generation. The latter has swung Elecosoft from net debt of £1.8m in January 2019 to net cash of £1.1m in December 2019, despite paying the interim dividend. Sensibly, there will be no final dividend in order to conserve cash. FY 2020 is of course an unknown; ELCO traded well in Q1 but will experience disruption from Q2. Management has swiftly taken mitigating steps (WFH and providing online services) and costs are being reviewed and controlled. Given the obvious uncertainty, management has withdrawn guidance and we have placed FY 2020 forecasts under review. However, with a large existing user-base paying recurring support & maintenance, a portfolio of offerings diversified by recent acquisitions, and cash in the bank, the group is in good shape to manage the COVID-19 pandemic.

Lorne Daniel 020 7220 0545

Ideagen (IDEA) : Corp

COVID-19 update

Key data

  • Share price (p) 169.0
  • Target price (p) 220.0
  • Market cap (£m) 382.5
  • Enterprise value (£m) 400.5

Ideagen has reviewed opportunities for the year to April 2020, after three strong quarters (to January) and with a strong recurring revenue base of c£43m, annualising 2H estimated performance. The effect of COVID-19 has been to prolong client decision making and deployment timing, hampering completion of licence sales up until April year end. The robust nature of the model means forecasts remain broadly in line, and we need only trim April FY20 revenue 4% and EBITDA 6%; and with typically swift and effective management measures, FY21 revenue reduction (to equal the 4Q20 revenue run rate) of 9% nudges EBITDA down only £1m to £21.5m. Net debt remains below 1x EBITDA in FY20, and 0.3x in FY21, retaining the headroom for investment and continuing M&A. The model is untroubled, and management practicality and decisive execution is again illustrated – current circumstances accelerating the development of the recurring revenue and increasing earnings quality yet further, with no change to the group’s progressive dividend policy illustrating financial confidence.

Andrew Darley 020 7220 0547

Intercede (IGP) : Corp

Strong year-end trading update

Key data

  • Share price (p) 49.0
  • Target price (p) 80.0
  • Market cap (£m) 24.7
  • Enterprise value (£m) 24.4

Intercede has reported a full-year trading update for the year ending March 2020, detailing 3% revenue growth to £10.4m (£11.0mE) – the 31 March major contract win with an existing US Federal Government customer illustrated how material licence orders are still coming in, even though there are some delayed receipts of orders – all of which are still expected to proceed within the coming weeks. Most significantly, the combined effect of increased revenue and cost control has led to profit “substantially higher” than market expectations – leading to improved cash generation and a resulting net cash/debt breakeven, versus former expectations of £0.8m net debt (all debt is convertible loan notes, gross cash is a very healthy £4.8m). We amend expectations (revenue -6%, adj EBIT doubling to £1m) noting the strong flow of follow-on orders from existing customers in the US, EMEA and South East Asia. We look forward to prelims in June, with Intercede’s high quality customer base facing entire workforces working from home, and an undiminished focus on identity and credentials management including secure virtual as well as physical access.

Andrew Darley 020 7220 0547

Gooch & Housego (GHH) : Corp

COVID-19 trading update

Key data

  • Share price (p) 980.0
  • Target price (p) U/R
  • Market cap (£m) 245.4
  • Enterprise value (£m) 259.6

The group has provided an update for trading in the six months to March, with the recent COVID-19 issues expected to have a material impact on short-term trading. Trading for FY 2020 is expected to be H2 weighted with more resilient performances in A&D and lifesciences. The group has a strong order book, with some orders in EU and US being pushed back in the near term. We reduce revenues by 10%, which has a drop through impact of 42% on profits and EPS. We also place our FY 2021 forecasts and price target under review until the picture becomes a little clearer. The longer-term attractions and strengths of the business remain unchanged, with a robust balance sheet and the ability to bounce back.

David Buxton 020 7220 0542

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