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On a current year P/E of just 8.1 - crazy low for a cyber-security/managed IT services company:

Https://martinflitton1.wixsite.com/privatepunter/post/sysgroup-on-the-growth-path-22-11-22

Conclusion:

"All in all, the H1 results point to a solid performance with further ongoing growth and progress, where with a first half adjusted pre-tax profit of £1.1m already recorded it is looking comfortable on achieving the anticipated forecast numbers.

As a result, on current guidance the shares look very good value to me, trading on such a lowly PER and attractive PEG, particularly by sector averages.

In further making out the investment case, Zeus concludes, “Shares trade at 4.6x FY23 EV/EBITDA (incl. leases in EV, excl. contingent consideration), well below peer average of 6.4x and, in our view, not reflective of the Group’s attractive growth opportunities and cash generation. The average of our valuation estimates (peer mean EV/EBITDA, DCF, regression analysis) is 61.0p per share, or 106.5% upside to the latest closing price. In the long term, we believe the company could reach £50m in revenue and 30% EBITDA margins, with the scale provided by acquisitions and organic growth. Valuing this long-term potential EBITDA (£15m) at sector mean multiples (6.4x) indicates an enterprise value of c. £100m.”

"MTI offers investors exposure to climate change, too, through its Mottech real-time irrigation monitoring, control and reporting software offering. Municipal authorities, commercial organisations and the agricultural industry are all key end markets. Importantly, Borovitz reports a good level of renewals with key municipal customers, decent price increases, and a growing awareness of Mottech’s eco-friendly solutions which can reduce water consumption by more than a third. The division accounted for 36 per cent of MTI’s operating profit of $3.5mn in the nine-month trading period.So, with the order book in fine shape, and $4.58mn of house broker Shore Capital’s annual cash profit estimate of $5.7mn already booked, then MTI looks well on course to deliver the 10 per cent forecast rise in full-year pre-tax profit to $4.4mn on revenue of $45.7mn.

Analysts are looking for revenue of $48.8mn, cash profit of $6.2mn and pre-tax profit of $4.9mn in 2023, sensible projections in my view. On this basis, expect full-year earnings per share (EPS) of 4.1c (3.5p) to rise to 4.8c (4.1p) in 2023, implying the shares are trading on price/earnings (PE) ratios of 14.5 and 12.5, respectively.

Moreover, the board have a progressive dividend policy, having paid out 5.3c (4.5p)a share since I initiated coverage on the shares, at 40p (‘Alpha Research: Tapping into 5G climate change technologies’5 September 2020). Future pay outs are well underpinned by prospective free cashflow yields of 6.1 per cent (2022) and 8.3 per cent (2023) which in turn support forward dividend yields of 5 per cent (2022)and 5.5 per cent (2023).

Admittedly, MTI’s shares have drifted 10per cent since I covered the interim results(‘A smart play on defence spend, climate change and 5G’, 15 August 2022), albeit in an unfavourable market for technology shares. However, the investment case remains sound and the rating is modest for a cash-rich company servicing keym arkets which offer attractive structural growth: demand for next generation 5Gnetworks; climate change; and increased defence budget spending. Buy."

Here's the Buy tip:

"Ebitda up 14 per cent to $4.6mn on eight per cent higher revenue of $34.8mn in nine months to 30 September 2022

Operating profit rises 5 per cent to $3.5mn after one-off costs of PSK acquisition

Strong trading across all three divisions

Net cash of $5.2mn (5p a share) equates to 10 per cent of market capitalisation

Israeli-based technology group MTI Wireless Edge (MWE:51.5p) is realising material benefits from January’s $1.2mn (£1mn) acquisition of a 51 per cent stake in PSK, an Israeli developer, manufacturer and integrator of communication systems and monitoring systems for the country’s defence market.

Buoyed by contract wins including a $10mn award in the summer from the Israeli Ministry of Defence, and last year’s strategic agreement with a [undisclosed] major defence customer, MTI’s Summit electronics division increased operating profit by 40 per cent to $1.8mn on 19 per cent higher revenue of $12.4mn in the first nine months of 2022.

Representing 40 international suppliers of radio frequency/microwave components, the addition of PSK is enabling the unit to move up the supply value chain as well as offering turn-key solutions (fixed and mobile communication, telemetry and signal intelligence systems).The performance of the electronics unit was the key driver behind MTI’s eye-catching third quarter performance, the division delivering $0.67mn of quarterly operating profit, or more than half the total of $1.3mn, hence the 15 per cent profit growth reported for the third quarter.

Chief executive Moni Borovitz also highlights contract momentum in the group’s antenna division. For instance, last month MTI won two contracts worth $1.25mn including a 5G backhaul award in India, a key market for MTI. The country has recently completed a 5G auction that is expected to lead to rapidly increasing demand for new Eband towers. MTI isworking with five of the seven leading OEMs in the sector, so is well positioned to not only win contracts, but be able to fulfil them now that microchip componentsupply shortages are finally easing. In the third quarter, the antenna division delivered $0.16mn of operating profit, two-thirds more than in the whole of the first half."

Nice start - overhang cleared?

As for Berenberg, they believe "the shares could do well in the near term", yet lower their target price hoping for a boring and "clean" set of results which they know full well will never arrive since KAPE's acquisition strategy is known to all and sundry! And as far as I can remember KAPE's cash flows have been excellent for some years now given the nature of their services, which are in the main prepaid. Bonkers. I suspect Berenberg have some clients who they want to get in to the stock at low prices.

Once again. The Q3 results are well ahead of even the "ahead of expectations" numbers in the trading update.

That's 13.68c EPS achieved in just the first 9 months. Plus there's 105% cash conversion, and a whopping improvement in EBITDA margins as a percentage of net revenues.

Online Marketing is even "further accelerating its growth" with the fundamental shift away from third party cookies.

The share price is just hugely undervalued imho.

Qquietly confident and nicely in line, with "strong income growth in the Republic of Ireland":

Https://uk.advfn.com/stock-market/london/fonix-mobile-FNX/share-news/Fonix-Mobile-PLC-AGM-Statement/89608865

"With high levels of repeating revenue, strong momentum in overseas markets and a growing pipeline of client prospects across all our markets and sectors, the Board continues to be confident in the growth potential for Fonix for the rest of the financial year and beyond"

Nicely in line and showing huge confidence in the outlook.

A "strong order book", accelerating long-term growth drivers in 5G and cloud computing, an increasing £14.4m cash pile (over 10% of the m/cap), iTrinergy being easily assimilated etc. Imagine how fast CLX can grow once component supply difficulties fully ease and markets stabilise.

The US rig count was up by another three last week to 782, compared to 563 this time last year:

Https://www.workboat.com/offshore/baker-hughes-us-rig-count-increases-by-three-from-last-week

A nicely confident results presentation just now. A few random highlights on top of the commentary in the Q3 results:

- in water management, Italy plans to spend a lot of money in the coming years, following the €1m initial orders announced in June, so much more to come
- in 5G, the first live trial of the new ABS antenna solution was completed two weeks ago and was very successful. It includes software which buyers pay to customise
- also in 5G, there are a huge number of Eband towers to be built globally, particularly in India, where MWE are one of only three companies able to manufacture locally, starting next year

Some might have missed Friday's late RNS, which notified us of a GM to approve share buybacks.

It's good to see the company being confident enough to confirm that it remains on the hunt for "value accretive acquisitions", but that if these don't occur then the $60m or so and rising cash pile will be put to good use.

Note also the statement that ACSO "continues to be satisfied with the trading of the business and the cash generated to date":

Https://www.investegate.co.uk/accesso-technology--acso-/rns/notice-of-general-meeting/202211181630019568G/

Zeus Capital have a 61p valuation here, and today retain their forecast of 3.7p EPS - a P/E of just 8.2:

"Forecasts and valuation:

H1 2023 revenue and adjusted EBITDA represent 55.2% and 50.1% of our full year estimates, respectively, providing us with confidence in the company meeting forecasts. Shares trade at 4.6x FY23 EV/EBITDA (incl. leases in EV, excl.
contingent consideration), well below peer average of 6.4x and, in our view, not reflective of the Group’s attractive growth opportunities and cash generation.

The average of our valuation estimates (peer mean EV/EBITDA, DCF, regression analysis) is 61.0p per share, or 106.5% upside to the latest closing price.

In the long term, we believe the company could reach £50m in revenue and 30% EBITDA margins, with the scale provided by acquisitions and organic growth. Valuing this long-term potential EBITDA (£15m) at sector mean multiples (6.4x) indicates an enterprise value of c. £100m."

Shore Capital retain their 90p price target. They also keep this year's forecasts of 4.1c EPS and a $10.8m cash pile:

"Outlook and valuation:

MTI will continue to seek to deliver revenue growth, both organically and
through acquisitions. We expect Summit/PSK to see continued good demand for its products and services, evidenced by the record contract win (for both PSK and MTI) from the Israeli Ministry of Defence in July 2022. In our view, Mottech remains particularly well placed in the medium term to potentially see stronger demand than we forecast for its water management and control software.

The Antenna division is expected to benefit from the rollout of 5G across the world, with the Indian market expected to be particularly interesting in the next year or two.

We initiated coverage with a 90p fair value on the basis of a DCF analysis, which is corroborated by MTI achieving an FY22F EV/EBITDA multiple of 13.7x (the average of our peer group at the time)."

Https://citywire.com/funds-insider/news/expert-view-just-eat-burberry-halma-renew-and-ceres/a2402912#i=5

"Peel Hunt: Renew Holdings underappreciated 

Engineering group Renew Holdings (RNWH) is seeing continued momentum but it isn’t appreciated by investors, says Peel Hunt.

Analyst Andrew Nussey retained his ‘buy’ recommendation and target price of 900p on the stock, which added 1% last week to close Friday at 636.5p having fallen 22% this yeare.

He said the October update from the group triggered a 3% full-year 2022 earnings per share upgrade and management ‘continues to enhance earnings quality and quantity’.

‘We anticipate another confident outlook statement given the visibility and growth opportunities,’ said Nussey.

He said the shares trade on 11.5 times forecast earnings for next year 2023 with anticipated cash in 2024 that is equivalent to 11% of its market value.

‘We continue to believe that the organic cash compounding and M&A growth characteristics, supported by a strong management team, are not fully appreciated by investors. The forthcoming results could be an important catalyst,’ he said."

Good interims today - 2p core EPS in H1 indicates that SYS are easily on track to meet, and likely beat, 3.7p EPS expectations.

A very confident outlook, the acquisitions are bedding in well, and of course cyber-security and cloud are two areas set to grow for some years to come.

Importantly there's mention of both further acquisitions and of the potential benefits of cross-selling to the new clients brought in via the two new acquisitions.

Amortisation and acquisition-related expenses are high so the headline EPS is not so impressive, but I look at the core business and cash flows - which were healthy, with 120% cash conversion - rather than one-off adjustments etc.

SYS are looking like a transformed company ready to step up to the next level.

The results are good (if not spectacular), particularly in the current climate, with water, 5G/antennas and consulting all looking very positive. If it wasn't for a higher tax charge the results would be even better. MWE already have 3c EPS in the bank, and Q4 is normally their strongest by some margin.

But the tone of the outlook and narrative is as bullish as I've ever seen the normally conservative CEO. And there's the confidence to state that MWE are "well placed to deliver a good result for the year".

I particularly like the evidence that MWE are increasing their presence in working with nearly all the top telco OEMs:

"The division is working with 5 out of the 7 leading Original Equipment Manufacturers and, through the new ABS antenna solution, is now working with nearly all of the Tier 1 OEMs"

Nice - 338,000 shares just bought at 1.18p, well above the published 1.15p offer price. Keen.

GMAA are looking for a boost from the World Cup at their base in Sharjah:

Https://www.businessairportinternational.com/features/flying-to-the-word-cup-in-qatar.html

"For Tom Murphy, head of FBOs and aircraft management specialist at Gama Aviation, which has an FBO in Sharjah, a city close to Dubai, incentives and being aware of Qatar’s guidelines will be essential. “Our FBO is an alternative for those flying into Dubai, with the airport in Sharjah a little quieter, so you tend to get through a bit quicker,” he says. “We’ll be starting a World Cup promotion offering free parking, and we’ve had a lot on enquiries around the games so far – a real mixed bag of business jets and commercial aircraft looking to base themselves here, flying back and forth to Qatar, and then the business jets are either operators chartering the aircraft or private owners looking to go to the tournament."

Cheers testpack3. Amusing that the word sp..se is asterisked out!

It's been reported that you can sell 1 million shares online, but can't even get a quote for 10k. Looking good for more rises on that basis.

New post from PodStar - interesting to see them looking to expand in the food and drink sector:

Https://www.podstar.co.uk/blog/foodchallenges

Extracts:

"Electronic Proof of Delivery (EPOD) software plays an important part in tracing the entire supply chain. At TouchStar, our EPOD system seamlessly integrates with your existing systems to create a digital record of the product’s journey, from point of delivery to the customer. This helps demonstrate compliance with regulations and is easily auditable should it be needed."

"An EPOD system can help with this by being able to prove cold chain compliance. Our PODStar system is able to capture the temperature of goods whilst they are in transit and on delivery. We are also able to attach photo evidence to the electronic receipt and digital file, ensuring it’s not lost."

Wednesday's interims were certainly better than I expected given the improvement to a positive EBITDA. The core MWD business may yet see quite a substantial improvement given (1) the US rig count still rising steadily, (2) a likely bounce in international sales and (3) a return of higher margin non third party equipment sales.

Cash is pleasingly up to $2.5m and will be supported by recovery of receivables, plus there's the potential $2m from the Houston property sale, so plenty of funding to see SABER through to full commercialisation for some time to come.

Great to see the CEO buying 100,000 more shares immediately post-interims. This would have been one of the few ideal windows for him to do so given that results are just out and there's a brief news flow gap before results of SABER trials in Norway and of field trials with customers.