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Cohort plc (AIM:CHRT) is an independent technology group that comprises six military, electronics and intelligence development operations spread across the UK, Germany, and Portugal. Its senior management will give an Investor Presentation that covers the group’s ambitions and recent interim results, as well as giving experienced insight into the defence threats currently facing the world.

The event will take place at 11.00am on Wednesday 1st February with Andy Thomis (CEO) and Simon Walther (Finance Director) presenting from the company.

The online presentation is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end. You can register at the following link: https://www.equitydevelopment.co.uk/news-and-events/cohort-plc-investor-presentation-1feb2023

Link to note: https://www.equitydevelopment.co.uk/research/trading-update-fy22-in-line-and-fy23-encouraging

In a Trading Update today, Mpac Group reports performance for the year to 31 December 2022 in line with expectations, with a strong FY22 closing order book; the outlook for FY23 is “encouraging”. We have raised our FY22 (adj.) EBITDA outlook by 8% and FY23 by 13%.

Reflecting resilient demand in the core Healthcare and Food & Beverage segments, order intake in the second half of FY22 was significantly above first half levels, leading to a healthy year-end closing order book of £69.0m (H1 22: £62.6m). In addition, Service order intake and contribution to revenue continued to grow. Mpac adds that, inclusive of modified specifications, the development and installation of the clean energy project for FREYR remains on track for completion in Q2 23.

Mpac was required to adjust its operations to meet the impact of the worldwide disruption of supply chains and related macro-economic factors. The response was good management of components sourcing and stock levels, in addition to alternative routes of sourcing. This resulted in the ability to better meet customers’ expectations and, in H2, improve profitability. The exercise required additional working capital – in areas such as inventory build - and adapting to lengthened project build timing, for which we estimate Mpac has ample balance sheet resources. We expect the pressure on working capital to unwind in H1 23, with estimated FY22 year-end net debt of £4.2m reverting towards an estimated 31 December 2023 net cash position of £5.3m.

Our fair value for Mpac remains 485p/share, indicative of a FY24 EV/EBITDA multiple of 7.9x compared to 4.6x at current EV.

Link to new research note: https://www.equitydevelopment.co.uk/research/another-solid-quarter-guidance-confirmed

Brooks Macdonald (BM) continued to build momentum in Q2 of FY23 (to 31 Dec 22), with FUM increasing by 4.5% (+£0.7bn) over the quarter to £16.2bn (end of Q1: £15.5bn). BM chalked up its 7th consecutive quarter of positive net flows of £156m, an annualised rate of 4% of opening FUM. Investment performance contributed £546m to the FUM increase (3.5% of opening FUM, in line with the benchmark MSCI PIMFA Private Investor Balanced Index - capital only).

Management have confirmed that underlying profit and margin are running in line with expectations, and our forecasts remain unchanged, although our fundamental valuation ticks up to 3000p per share, which is 44% above the current share price, with the increase due to a reduction in the UK 10-year gilt yield (the risk-free rate used in our DCF valuation). We also highlight that BM’s PER of 14.0 is significantly below a peer group median of 17.3 which doesn’t look justified. We will revisit our forecasts & valuation when H1 results are released on 2 March 2023.

Our latest research following this morning's update (full link here: https://www.equitydevelopment.co.uk/research/aum-slightly-down-fy23-forecasts-unchanged)

AUM fell 1.6% over Q3 of FY23 (to 31 Dec 22) to £18.47bn. Over the first nine months of the FY the AUM fall totalled 16%, although this was heavily impacted by the significant sell off in technology stocks in Q1 (Apr – Jun 22). Net outflows totalled £304m during the quarter, lower than the £529m recorded in Q2 and the £316m of Q1. Market movements and investment performance contributed +£19m over the quarter (Q2: +£342m; Q1: -£2,393m). The closure of Phaeacian mutual funds in Q1 resulted in a -£469 impact on AUM.

The lower net outflows of the latest quarter and two consecutive quarters of positive investment performance suggests a degree of positivity in some of the major sectors Polar is exposed to, and perhaps some stability in the most significant technology sector. More specifically, Polar has reported:
• continued demand and inflows into the Global Insurance, Healthcare Blue Chip, Smart Energy and Emerging Market Stars funds, with combined net inflows of £190m in the quarter;
• a continuing decline in the rate of outflows from its open-ended Technology funds, with £217m of outflows in Q3 compared to £252m in Q2 and £380m in Q1.

This latest AUM update suggests Polar is on track to meet our previous FY23 forecasts, which remain unchanged (we will revisit forecasts & valuation with the Q4 AUM update in April), as does our fundamental valuation of 600p per share (20% above the closing 11 Jan 2023 share price). We also highlight that Polar’s PER of 9.8 is significantly below the 12.2 median PER of a UK-listed active fund manager peer group.

Supreme PLC reports that trading in the three months up to 31 December 2022 was significantly ahead year-on-year, with revenue and gross profit up 30%YoY. As a result, the Group is “well placed” to meet market expectations - which were raised in November - for the year to 31 March 2023.

Following strong Interim results (ED report 29th November 2022 H1 23 results buoyed by strong performance from Vaping) we raised our FY23 revenue outlook by 7% from £129.5m to £138.3m, and raised our FY23 EBITDA (adj.) outlook by 6% to £18.5m. As the Trading Update indicates, Supreme has maintained the momentum of H1 performance adding confidence to our raised estimates for the current year; for FY24, we maintain the revenue forecast which was raised by 6% from £142.2m to £150.5m at the Interim.

Our Fair Value remains 190p/share.

https://www.equitydevelopment.co.uk/research/positive-trading-update-strong-busiest-quarter

Research report available here: https://www.equitydevelopment.co.uk/research/revenue-growth-accelerates-to-33.4-in-q3

Rapid 33.4% revenue growth, margin expansion relative to the first half, and a record level of delivery volumes were the main features of Marks Electrical’s FY2023 Q3 trading update. Furthermore, the strength of Q3 business lends significant credibility to the company’s view that it is on track to achieve its full year targets, and bolsters confidence in our fair value for Marks Electrical Group of 150p per share based on relative valuation and DCF.

Marks Electrical’s strong 33.4% growth in FY2023 Q3 implies a 22.0% 9-month growth to 31 December 2022 and acceleration from 15.1% growth in the first six months. The company advanced sales in the important Q3 trading period, which in FY2022 was equivalent to 28% of annual sales revenue. The strength of Q3 sales growth should also have increased operating leverage and thus driven margin expansion. We note that with 82% of our FY2023 target already achieved, the company is in a strong position to meet current expectations for sales revenue and profitability.

Cash conversion remains an important part of the Marks Electrical investment case, which should have benefited in Q3 from maintenance of inventory levels during the peak trading period and an implied improvement in the inventory:sales ratio. A strong cash position augurs positively for dividend paying capability. A 0.3p interim dividend was paid to shareholders on 23 December 2022.

Marks Electrical’s in-house delivery vehicle fleet achieved record quarterly sales volumes in Q3. Service levels and customer satisfaction should benefit going forward from the company’s in-house installation service. Over 3,000 installations have been completed since the offering’s launch last August.

Link: https://www.equitydevelopment.co.uk/research/aum-up-6-in-q1-of-fy23-in-line-with-forecasts

Impax has recorded a strong Q1 of FY23, with AUM growing by £2.3bn (+6.4%), from £35.7bn on 30 Sep 22 to £37.9bn on 31 Dec 22. Market movements, FX and investment performance was responsible for £1.5bn of the increase, while the group continued its impressive record of attracting and retaining client assets, recording £797m of net inflows, up from £606m in the prior quarter.

While market conditions remain uncertain, Impax’s recent net inflow trend does look like an encouraging shift back to a higher level, following a drop-off during the sharpest periods of the 2022 market fall. Impressively, Impax has recorded only one quarter of net outflows (Apr-Jun 2022) since 2015.

We are bullish about the prospects of the sustainable investing market generally, and of Impax specifically, which has been a standout performer compared to other asset managers. With AUM growth on track, we maintain our fundamental valuation of 1,000p (37% above closing price on 6 Jan 2023).

Link to note (free & accessible):
https://www.equitydevelopment.co.uk/research/on-track-to-meet-forecasts-positive-outlook

Mattioli Woods (MW) has reported H1-23 revenue (to 30 Nov 22) of £54.9m, 10% up y-o-y (H1-22: £49.9m), with organic revenue growth of over 2%, despite a challenging environment. It remains in a strong financial position, with net cash totalling £38.3m at the end of the period.

Total client assets closed H1 on £14.6bn, a 3.2% y-o-y fall from £15.1bn on 30 Nov 21, but a creditable performance considering the PIMFA Private Investor Balanced Index (net) fell 3.8% over the same period. Gross discretionary AUM totalled £4.9bn, 4% down y-o-y (30 Nov 21: £5.1bn) but pleasingly, positive net inflows of £38.1m was achieved (+0.8% of opening AUM).

MW has highlighted several factors that suggest confidence in the H2 outlook, which remains in line with previous expectations:
- as in previous years, H2 revenue expected to exceed H1 due to end of tax-year advice and second half weighting of client year-ends;
- value of new clients on-boarded in H1 over 10% up y-o-y;
- increased new business pipeline despite market conditions, solid acquisition pipeline;
- all recent acquisitions integrating well, trading in-line or ahead of budget, and have delivered earnings to support full payment of any contingent consideration;
- joint-fundraising between MW and Maven (acquired Jun 21) continued to gain traction with two recent Investor-Partner deals;
- discretionary managed funds performed in line with benchmarks;
- digital client experience enhanced with launch of MWise online investment platform;
- Amati AIM VCT won VCT AIM Quoted Category at Investment Week's Investment Company of the Year Awards 2022.

MW remains on track to meet our forecasts for FY23 and our fundamental valuation of 925p which is 47% above the current share price, remains unchanged. We have updated our peer-comparison valuation which also suggests potential for a re-rerating. MW’s PER of 13.0 is 29% below a wealth management peer group median of 18.2.

Festive cheer from Destiny Pharma as a deal for NTCD-M3 has reached heads of terms and exclusivity stages + the partnering process for XF-73 is underway for a 2023 deal.

Equity Development reatins its Fair Value at 345p/share - as you can hear and read here:
https://www.equitydevelopment.co.uk/research/positive-update-on-partner-deals

For the six months to 31 October 2022, Cohort plc reported a strong performance: revenue was up 29%YoY to £77.5m; an operating profit (adj.) of £5.0m was achieved (H1 22: £1.7m); and EBITDA (adj.) was £7.1m. Order intake of £88.6m resulted in a record closing order book of £304.2m. The interim dividend is raised 10% to 4.25p/share.

Absorption of working capital meant that H1 net debt was £0.6m; however, Cohort reports that as of 9th December net funds were £7.6m. Added to H1 revenue, over £80m of orders deliverable in the second-half equates to 95% coverage of our revised full year revenue outlook of £165.0m.

A strong interim performance, in particular by MCL, supports an increase in our FY23 revenue outlook of 3%, to £165m, growth of 19.9%YoY; while our EBITDA (adj.) outlook remains at £22.0m (up 13.1%YoY).

We maintain our Fair Value of 650p/share.

https://www.equitydevelopment.co.uk/research/record-closing-order-book

Another strong half reflects the benefits of an increasingly diverse base of cyclical and counter-cyclical revenues, built progressively via a series of strategic acquisitions and organic investment. The double-digit revenue and profit growth delivered by both divisions in H1 puts the group on track to achieve full year forecasts. The detail reveals consistent growth derived both organically and from a series of acquisitions which have added to the breadth of professional expertise and BEG’s coverage of its key target markets.

We have held our full year forecasts and plan to review them when BEG reports its Q3 trading update in late February 2023. Our current estimates underpin a retained 175p/share fair value, with upside potential if UK insolvencies, particularly administrations, continue to gather momentum, and the group secures further acquisitions which continue to build expertise and capacity. We have reflected on BEG’s rating vs the broader market and its intrinsic value vs its peers in this note.

https://www.equitydevelopment.co.uk/research/resilient-income-streams-drive-h1-result

RUA Life Sciences’ interim results include in-depth updates on the development of its vascular graft and aortic heart valve products. They also provide more detail on its cash-generative businesses which together are now segmented into Vascular, Structural Heart, Biomaterials and Contract Manufacture. For the latter two, a 56% increase in revenue compared to the same six-month period in 2021 left our previous FY 2023 forecasts of total revenue and cash looking a bit anaemic with the Board’s expectations of a second-half weighting for biomaterials revenues, contract manufacturing revenues, and the R&D Tax Credits still to be received.

The culmination of higher revenues and working capital control highlighted changes that needed to be made to our revenue and YE 2023 cash estimates. These are incorporated into our financials but since the bulk of our valuation remains in RUA products in development, our valuation remains unchanged at £121.0m or 545p per share. We await updates in 2023 on the timings of the vascular graft clinical study and at RUA Structural Heart.

https://www.equitydevelopment.co.uk/research/messages-from-the-interim-results

Full report here (free & accessible here): https://www.equitydevelopment.co.uk/research/fy22-results-deliver-sustainable-growth

For the year to 30 September 2022, Benchmark Holdings reported revenue of £158.3m, +27%YoY and (adj.) EBITDA of £31.2m, +60%YoY. The Group highlighted 14%YoY growth in the Advanced Nutrition business area, as shrimp market demand continues to recover, and 24%YoY growth in Genetics as the new Iceland salmon eggs facility came on stream. FY22 EBITDA (adj.) was in line with the upper end of the Trading Update of 24 October; revenue was 3% above our October estimates, EBITDA (adj.) 14% higher. EBITDA (adj.) margin improved from 15.6% in FY21 to 19.7%, maintaining progress from 13.7% in FY20.

Following FY22 performance which matched updated guidance – reiterating Benchmark’s ‘delivery’ strategy - our FY23 and FY24 outlook is essentially unchanged, with top line and EBITDA growth maintained; LBT is reduced as a result of debt restructuring undertaken in November 2022. Our outlook equates to a FY24 EV/EBITDA of 9.1x, and Fair Value is still seen at 63p/share.

Link to video: https://www.equitydevelopment.co.uk/research/supreme-plc-investor-presentation-29nov2022

Supreme (AIM:SUP), a leading manufacturer, supplier and brand owner of fast-moving consumer products, conducted an Investor Presentation covering its Interim Results for the period to 30th September.

Sandy Chadha (CEO), Suzanne Smith (CFO) and Mike Holliday (Vaping Divisional Lead) ran viewers through the details of their financial performance that included strong ongoing growth in Vaping as well as the already-trailed challenges in Lighting. The team touched on acquisitions, latest developments in Sports Nutrition & Wellness and answered a range of investor questions.

If you missed the live event, the full video presentation recording is available at the above link, divided into chapters:
0:00:03 Introduction to Supreme / key investment highlights
0:03:23 Financial highlights and analysis
0:15:58 Lighting
0:18:19 Sports Nutrition & Wellness
0:19:40 Vaping
0:28:02 Acquisitions & Investment
0:37:16 Questions & Answers

FDA approval of Ferring’s Rebyota can open a new era of microbiome drug approvals, and comparison with M3 should further motivate potential partners for Destiny

Equity Development fair value is unchanged at 345p/share as per new research note available here:
https://www.equitydevelopment.co.uk/research/validation-for-microbiomes

Full note with audio summary: https://www.equitydevelopment.co.uk/research/trading-update-/-completion-of-billi-acquisition

Ongoing lockdowns in South China have impacted two of the Group’s largest OEM customers during the busiest period of the year, delaying the shipment of products. Associated costs have increased as an additional warehouse has been retained to deal with future lockdowns. Uncertainty created by the war in Ukraine and its implications have also impacted wider demand across several key markets. Little improvement is anticipated ahead of H2 ’23. The good news is that the completed acquisition of Billi strengthens the group’s product portfolio, pushing it into new products, geographies, and commercial markets. We expect Billi to be modestly earnings accretive during FY23, with wide-ranging synergy benefits improving its impact further into FY24.

We have reduced our financial estimates across the board for FY22 and FY23, although we continue to feel that the shares remain modestly priced relative to both our cash flow expectations and its peers. The yield remains the highest of its listed peers, at 8.2% for FY22.

We have adjusted estimates to reflect the inclusion of Billi and the softer than anticipated trading within Kettle Controls, with revenues declining 5% in FY22 and adj. EPS -16.6%. Nevertheless, we anticipate that revenues and adj. EBITDA should increase by 19.9% and 9.7% on a three-year CAGR to FY24. We have also adjusted our dividend expectation, although at the current share price level this still implies a sector leading yield of 8.2% in the current year.

The share price currently stands at an all-time low. We have updated our DCF and various peer group comparison valuation models, which give a fair value of 188p/share. Our fair value represents a significant premium to the existing share price.

in H1 LendInvest continued to grow and gain market share, despite a worsening macro-economic environment. Its financial results were solid and Equity Development retains a 180p/share fair value, as per new note here:

https://www.equitydevelopment.co.uk/research/solid-h1-amidst-weakening-macro-environment

Link: https://www.equitydevelopment.co.uk/research/benchmark-holdings-investor-presentation-fyresults-30nov2022

Benchmark Holdings plc, the aquaculture biotechnology company, conducted an investor presentation following publication of their Full Year results for the year ended 30 September 2022.

Trond Williksen, CEO, and Septima Maguire, CFO ran investors through operational highlights for each key division (Genetics, Advanced Nutrition, Health) and provided a detailed financial review. Management discussed their forthcoming Oslo listing, touched on the possible impact of the Norway salmon tax proposal, and answered a range of investor questions.

If you missed the live event, the full video is now available on the above link, divided into chapters:
0:00:03 Introduction & FY22 highlights
0:05:13 Euronext Growth Oslo listing / placing & retail offer
0:06:20 Operational highlights by division
0:16:15 Financial Review
0:30:32 Strategy & Outlook

Video recording now available: https://www.equitydevelopment.co.uk/research/impax-am-investor-presentation-fy-results-30nov2022

We hosted an investor presentation with Impax Asset Management plc (AIM: IPX), leaders at investing in companies helping the transition to a more sustainable global economy, following publication of their impressive results for the 12 months to 30 September 2022.

Ian Simm (CEO) and Charlie Ridge (CFO) took investors through highlights of the period which included net inflows of £2.9bn. They provided a detailed financial update and discussed opportunities in the current environment. Management also touched on the outlook and answered a range of investor questions.

If you missed the live event, the video recording of the presentation is available at the above link, divided into chapters:
0:00:03 Introduction
0:03:25 Highlights and Business Update
0:18:33 Financial Update
0:28:23 Outlook
0:30:33 Questions & Answers

FY22 results were highly impressive despite market challenges, and Equity Development's fundamental value rises to £10/share – as you can read (free access) in a detailed new research note via link below, with audio summary:

https://www.equitydevelopment.co.uk/research/revenue-profit-cash-dividends-up-materially