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See full details in our new note: https://www.equitydevelopment.co.uk/research/q3-update-positive-outlook-in-uncertain-times

Summary

Benchmark’s results for the FY22 Q3 (April-June) period showed robust sales plus adjusted EBITDA (AEBITDA) growth and confirm a positive outlook, particularly in the important genetics and advanced nutrition businesses. Medium-term financial guidance, issued only in May, was reiterated, something that represents a positive element in the investment case given current heightened economic uncertainty. Benchmark’s status as a key player in the global aquaculture industry should be a defensive attribute and it also confirms low exposure to spiking utility costs - an additional attractive feature in the present energy crisis.

We recently revised our valuation principally to reflect the changed macro-economic (inflation/interest rate) environment and, while this has deteriorated further since this was carried out in June, we do not consider there is yet a need to change the valuation.

Thus, we are maintaining the current valuation of £478m (or 68p/share), which is struck on the basis of a 12% weighted average cost of capital and 3% long term growth rate.

ECO Animal Health Group plc (AIM: EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, is pleased to announce that David Hallas, CEO, and Christopher Wilks, CFO, will be conducting a live presentation covering the company's FY Results for the period ended 31 March 2022.

The online presentation will take place on Wednesday 7th September at 10.00am UK time.

This event is open to all existing and potential shareholders and registration is free. Questions can be submitted during the presentation and will be addressed at the end of it.

Sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/ecoanimalhealth-fyresultspresentation-7sept2022

Strix Group plc, the global leader in the design, manufacture and supply of kettle safety controls and other complementary water temperature management components will be conducting an investor presentation covering their Interim Results for the period ended 30 June 2022. The online presentation will be hosted by Mark Bartlett, CEO, and Raudres Wong, CFO.

This event will take place at 11.30am on Wednesday 28 September.

The webinar is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.

You may register at this link:
https://www.equitydevelopment.co.uk/news-and-events/strix-fypresentation-28sept2022

Brooks Macdonald Group plc, the AIM-listed investment management group, will be conducting an online presentation for investors following the release of their Full Year results.

The event will take place at 12.00pm on Tuesday 20th September.

Andrew Shepherd, CEO and Ben Thorpe, CFO will be hosting the presentation and answering questions submitted by investors.

This is open to all existing and potential shareholders - you can sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/brooks-macdonald-20sept2022-investor-presentation

Mpac: Interim Results Investor Presentation - 19th September 2022

Mpac, the specialist international business providing high speed packaging machines and complimentary services, will be conducting an Investor Presentation webinar covering their Interim Results to the period ending 30th June 2022.

The online presentation will be hosted by Tony Steels, CEO, and Will Wilkins, Group Finance Director.

This event will take place at 10.00am on Monday 19th September.

The webinar is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.

Sign up here to register: https://www.equitydevelopment.co.uk/news-and-events/mpac-fypresentation-19sept2022

We hosted an investor presentation with Benchmark Holdings plc, the aquaculture biotechnology company, following publication of their Q3 results.

Trond Williksen, CEO, and Septima Maguire, CFO took viewers through the highlights of the period which saw continued business momentum and growth in Adj. EBITDA and progress on the development of a new CleanTreat® configuration and business model. The management team provided a financial review, looking at each key business (Genetics, Advanced Nutrition, Health) and gave an update on the intended Euronext Growth Oslo listing in Q4 2022.

The full video has been divided into chapters.
0:00:03 Introduction and Q3 overview
0:04:22 Business area highlights
0:10:52 New CleanTreat® configuration details
0:13:45 Financial Review
0:20:53 Progress towards listing on Euronext Growth Oslo
0:21:47 Current trading & outlook; Benchmark's unique value proposition
0:26:20 Questions & Answers

Link to video: https://www.equitydevelopment.co.uk/research/investor-presentation-august-2022-q3-results

The Artisanal Spirits Company (AIM: ART), the owner of The Scotch Malt Whisky Society (SMWS), the leadin curator and provider of premium, single cask Scotch malt whisky and other spirits for sale primarily online to a discerning global membership, is pleased to announce they will be conducting an online presentation for retail & private investors following the release of their Interim Results for the period to 30th June 2022.

The event will take place at 4.00pm on Wednesday 14th September.

David Ridley, Executive Managing Director of the Company, and Andrew Dane, Finance Director will be hosting the presentation and answering questions submitted by investors.

This is open to all existing and potential shareholders - you may sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/artisanal-results-presentation-14september2022

Vp – the specialist equipment rental firm - indicated last Tuesday that it remained on track to meet FY’23 expectations, despite also having to manage the ‘Formal Sale Process' (FSP) over the past 4 months. Demand was said to be “good” across the infrastructure and housebuilding sectors, in addition to “encouraging activity levels both in the UK and Internationally in spite of ongoing input cost inflation and supply chain” pressures.

We think this is a creditable performance, and further evidence that Vp is a high-quality group enjoying strong defensible positions in its chosen secular growth markets.

The FSP began on 28th April 2022, and while it received a “good level of interest throughout, none of the proposals submitted met [the Board’s] objectives” – so the process was concluded.

Elsewhere our FY’23 profit forecasts remain unchanged - anticipating adjusted PBTA of £41.4m on revenues up 4.2% to £365m, with net debt (pre IFRS 16) closing Mar’23 at £130m (ie flat YoY), equivalent to a comfortable 1.4x EBITDA. Likewise, we have prudently held the £11.30/share valuation, but plan to revisit these at the October trading update.

Link to full note: https://www.equitydevelopment.co.uk/research/solid-as-a-rock

An in-line trading update was a good start for the new CEO and CFO, and Equity Development raises its fair value/share to 160p on the back of better than expected net funds.

That new research note is freely accessible here: https://www.equitydevelopment.co.uk/research/first-corner-turned

Only two months ago shareholders saw sufficient potential upside to reject a bid at c. 128p equivalent (i.e., 175p offer, adjusted for a subsequent share issue which added 37.1% to the equity base). They then fully supported an equity issue, which added c. 28.5p cash per share, based on the enlarged capital base.

Operational updates since the bid have all been encouraging with both core businesses well on track (Program Management a year ahead of prior forecasts) to deliver transformational strategies over the next 12-24 months.

The events which led to the recommended bid have affected credibility. A material non-cash impairment to an historic (acquired 15-years ago) legacy portfolio was a source of concern and addressed promptly, as it potentially affected debt covenants and external ratings. Ultimately, it was fixed by a dilutive equity issue, but as both events were unexpected they will have impacted confidence.

Management’s ultimate ambition and the motivation for its five-year strategic plan kicked-off in 2021, is explicitly to create a business with two complementary sources of high-quality, growing revenues and cashflow. All efforts now focus on helping both core businesses to achieve scale and generate reproducible and stable income.

We see RQIH progressively moving away from the sum-of-the-parts valuation relied on previously to an earnings multiple / dividend yield basis, backed by a stable revenue base more akin to a traditional insurer.

Our revised Fair Value / share is 170p.

Link to full note: https://www.equitydevelopment.co.uk/research/strong-operational-progress-to-give-perspective

50% of 8AM now bought byTatton AM which looks a solid strategic fit. It also impressively reports strong net inflows over first 4 months.
Equity Dev updates forecasts and its fair value/share rises to 540p, read note here:
https://www.equitydevelopment.co.uk/research/stake-in-8am-acquired-net-inflows-solid

RUA Life Sciences’ AGM statement led with an update on its two revenue-generating businesses for the first four months of FY 2023. This leaves us room to upgrade our FY revenue forecasts, but for the moment we have kept them unchanged, and our valuation remains at £121.0m or 545p per share. Progress on RUA’s vascular and heart valve products continues and a clinical trial update on the former is expected in late September. All resolutions were passed at the RUA Life Sciences AGM.

Revenues from RUA’s two cash-generative businesses – biomaterials and contract manufacturing – were 73% and 44% ahead, respectively, on the same four-month period last year. Together, this puts RUA on a full-year total revenue run-rate that is just over 16% above our forecasts.

RUA appears to be working well with the FDA on aligning and agreeing the size, endpoints and statistical analysis plan for the small clinical trial needed for 510(k) approval of their large-bore vascular graft product.

Full note here: https://www.equitydevelopment.co.uk/research/positive-agm-statement

A 13% increase in net sales revenue to a record £154.2m, a 41% increase in EBITDA to £18.8m (also a record) and an underlying 1.3x net debt/EBITDA ratio were notable features of a pre-close trading update released by UPGS today. Moreover, FY2023 appears to have started well. With strong momentum in both reported sales and profits, as well as significant tangible progress within group operations, we maintain our fair value assessment of 250p per share.

While UPGS’s reported sales revenue growth benefited significantly from the acquisition of Salter in June 2021, the company’s 1% organic growth (which lapped a tough comparison in FY2021 when houseware sales benefited from COVID19 related lockdowns) should be seen positively. In addition, the company continues to make important progress in the supermarket channel where its success as a brand manager is arguably more critical.

UPGS’s profitability benefited not only from the acquisition of Salter but also from improved margins, which we infer to be a combination of higher gross margins and a better overheads performance. Importantly, the company remains committed to operating at best practice in terms of cost management.

Supermarkets were reported to be the stand-out performer of UPGS’s four strategic pillars of distribution. But as the well-recognised supply chain headwinds facing importers of manufactured consumer goods ease, scope for online to return to growth should improve.

The current share price fails to reflect three salient growth drivers of the business, in our view. These include UPGS’s ability both to manage and acquire key brands, the development of more supermarket and online business and its international opportunity. The company’s proven ability to cope with external headwinds should also be noted. We base our 250p fair value on an FY2023 EV/sales ratio of 1.5x and 12x EV/EBITDA.

Link to full note: https://www.equitydevelopment.co.uk/research/upgs-record-sales-and-profits-in-fy2022

Ukraine has prompted a global rethink on the need for defence. Cohort has a record £291m order and Equity Developement initiate coverage today with a Fair Value of 650p/share.

Read full note / hear summary below (free access):

https://www.equitydevelopment.co.uk/research/cohort-test

Marks Electrical Group - Market share gains drive revenue growth (new note published today following Trading Update ahead of this morning's AGM)

Significant market share gains in a particularly tough market environment were responsible for Marks Electrical recording a strong 13.7% sales revenue growth rate in the first four months of its FY2023 financial year. With a sustained and impressive 4.8 Trustpilot score, and flat inventory levels, the company appears well positioned to make further sales gains and convert revenue and profits into increased free cash flow.

The current market share position implies massive headroom for growth, driven by a superior premium branded product range and service offering. Financially, a focus on costs and working capital should ensure that the company has adequate resources to fund future sales revenue expansion. Valuation does not reflect the clarity of Marks Electrical’s growth outlook, in our view. We continue to argue that the company’s well defined growth strategy - and ability to implement it - is superior to its peer group, much of which is not profitable. We reiterate our 150p / share fair value.

Link to full note here: https://www.equitydevelopment.co.uk/research/market-share-gains-drive-revenue-growth

Trading update triggers share price fall

ECO Animal Health issued a trading update in somewhat unusual circumstances given it is in its closed period and expects to report FY22 results on or around 18 August. The statement also flagged up two financial issues that had recently emerged: that it will have to make a provision for a possible but unanticipated sales tax sales liability and treat certain previously capitalised development costs as an expense. The impact of these two items will be largely offset by exchange rate gains and ECO expects to report sales in excess of £82.5m and EBITDA of £6.5m, both broadly in line with consensus.

On current trading, ECO said that Chinese revenue in Q1 FY23 (April-June) was significantly below levels recorded in the prior year, although gross margins remain strong, while revenue in the Rest of the World grew strongly compared with the same period last year. While it is not clear yet the extent of the shortfall in China, it is not helped by comparison with a particularly strong prior year figure that reflected a favourable combination of industry structural changes and restocking of the pig herd after the ASF epidemic together with changes in regulations for use of antibiotics in feed.
ECO should be able to give more colour on its assessment of overall trading in FY23 with its forthcoming results, which should at least remove the uncertainty that is presumably depressing its shares. With cash at the last balance sheet date of almost £23m, its EV currently stands at £45m. Thus, based on known FY22 figures, EV/sales ratio is currently 0.54 and its EV/EBITDA at 6.9 – both very low by any standards and certainly the norms of the animal health sector.

Link: https://www.equitydevelopment.co.uk/research/trading-update-triggers-share-price-fall

A very positive pre-close trading update with all markets seen as strong.
We raise EPS estimate by 37% and our fair value/share rises to 283p, vs 196p last close. Read, hear new research note:
https://equitydevelopment.co.uk/research/growth-momentum-continues-unabated

*** Acquisition of Cuts Ice Limited and Flavour Core Limited ***

Supreme has announced the acquisition of independent vaping products manufacturer Cuts Ice Limited, and Flavour Core Limited, developer of flavours and e-liquids regulatory practices compliance. The acquisitions bring e-liquid technical and regulatory compliance knowhow, plus offering manufacturing synergies and bring additional access to European markets.

The acquisitions are funded from existing resources, where Supreme has proven experience in the integration process, and are expected to be immediately EBITDA (adj.) earnings enhancing, with integration into its Vaping division systems and operations to follow.

The acquisitions bring to Supreme important vape flavourings, scientific and regulatory expertise, and practices to augment the vaping brand and commercial success Supreme has established in the UK. We leave our existing outlook in place for now with the proviso to revise at the next earnings update.

Link to full note: https://www.equitydevelopment.co.uk/research/supreme-plc-acquisition-of-cuts-ice-ltd.-and-flavour-core-ltd

For the year to 30 April 2022 Kromek reported results in line with the Trading Update of 16 May: revenue of £12.1m +16.5%YoY, and an EBITDA (adj.) loss of £1.2m. We estimate revenue in the Advanced Imaging division grew 28% YoY to £4.6m, whilst the CBRN segment grew 1.5x to £5.4m.

Kromek reports that it expects growth to accelerate in both its core segments – security-related CBRN and advanced imaging – with the prospect of “a substantial year-on-year increase in revenue”. The CBRN segment in particular has seen an increase in interest from government agencies, as current levels of geopolitical instability would indicate.

There is very encouraging visibility of the current year with 53% of contracts sealed, with a further 37% under negotiation and 10% underpinned as repeat business. Kromek also announced two new orders worth a total of US$0.751m and a convertible loan note to raise £1.7m.

Our FY23 outlook remains unchanged, as does our Fair Value at 26p/share.

Link to full research report: https://www.equitydevelopment.co.uk/research/fy22-results-and-a-highly-visible-outlook

As flagged in last trading update, FY22 revs up 16% + CEO reports confidence for the future with ‘highest ever level of revenue visibility' and anticipates 'substantial revs growth in FY23'

2 repeat OEM orders won today in Medical Imaging worth $751k add to 'a positive start' to new financial year.