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From Allenby Capital's TMT update this morning:

"MTI Wireless Edge Ltd (MWE.L, 55.5p/£49.1m)
Contract win: Largest contract in Group’s history (18.07.22)

 P.S.K WIND Technologies, part of MTI’s Distribution & Professional Services division, has won a three year contract (with the option to extend for a further four years) with the Israeli Ministry of Defence (MoD).

 Expected to be worth $1.4m p.a. or $10m over the full seven years – representing the largest contract in MTI’s history.

ï‚· PSK has worked with the MoD for more than seven years, providing service and maintenance support, and this contract represents a continuation.

 MTI acquired 51% of PSK, with an option to acquire the balance, in January 2022 and PSK’s status as a qualified MoD provider for strategic projects and its relationships with Government and defence industry customers were key to the acquisition decision.

ï‚· No changes to forecasts but contract provides good additional revenue visibility."

A must-read from a long-term investor in SDI:

Https://martinflitton1.wixsite.com/privatepunter/post/sdi-well-on-track-22-07-22

"Announcing these updates separately and the tone of the trading statement suggests that the management are getting increasingly frustrated at the lack of market reaction:

Capital Drilling: Strongest demand environment since the company's inception…

Capital Mining continues to perform strongly…

Q2 2022 has again seen extremely strong demand with the outlook remaining supportive;….

Tendering activity across all business units remains robust, with a number of opportunities progressing;…

We are currently seeing the strongest demand since the Company's inception, in contrast to the recent perception from global equity markets.

Our hope is they turn this weakness into an opportunity with a large buyback announcement to coincide with the results.

The guided revenue range is reiterated. However, the strength of trading in Q2 and the continued buoyancy of the end markets confirmed this week means that this looks even better value at 90p than it was a couple of weeks ago when it was trading in the mid-70s."

Small Caps Life have emailed out their latest weekly summary, including this on CAPD after the trading update:

"Capital Limited (CAPD.L) - Q2 2022 Trading Update

The number of rigs utilised is quite a bit higher than Mark expected at 97 vs 92. 85% utilisation is about the maximum they can achieve while still moving rigs between contracts and maintaining the fleet.

The average revenue per operating rig is a little bit lower again in Q2. The drop here in Q1 led some to question why, so seeing it drop further may worry some, particularly when we know the market is tight. However, there are some reasons why ARPOR is lower:

A higher proportion of underground rigs. About 20% of the fleet is now underground rigs, which command lower rates. However, the EBITDA margins are similar. Given that underground rigs are cheaper to purchase, the return on capital on the underground fleet may actually be higher.

Rates are not the biggest driver of ARPOR. Factors such as how long a contract has been operated (and therefore operations have been optimised) and whether they can operate double vs single shifts matter more. Rates themselves are being priced at around 15% higher than the same time last year.

The other bad news was the value of the listed investments has suffered due to the weak equity markets:

The portfolio recorded investment losses (unrealised) of US$10.3 million. The total value of investments (listed and unlisted) was US$47.3 million as of 30 June 2021, versus US$60.2 million at the end of 2021;

However, this loss is lower than a simple mark-to-market would suggest, showing some outperformance from trading these. And they’ve taken cash out, which is good to see:

…the portfolio generating net sales after investments of US2.6million, with the proceeds directed toward group capital expenditures.

They also highlight some of the previously announced recent positive news that has been separately announced:

First contract with B2Gold Corporation at the Fekola Gold mine in Mali, one of largest gold mines in Africa: Capital has been awarded a reverse circulation drilling services contract.

They now have a toehold into the first and second largest gold mines in Africa and will be seeking to expand their presence in these.

MSALABS recently announced an expansion of its global partnership with Chrysos, now guiding to deploying 21 Chrysos PhotonAssay units by 2025;

The growth here is phenomenal, as are the potential margins and low-capex required to expand. Interestingly, they say MSALABS starting to drive work to the drilling side, not just the other way round. It shows that it is starting to be a strong business in its own right."

Results are next Friday 29th July, with a presentation the next Wednesday (so Thaiger's post was wrong - never trust independent info on a bulletin board without a link!).

Looking forward to the results and outlook as we know they'll be good, but the InvestorMeet presentation should be really interesting given thisimpressive extract from today's RNS:

Https://uk.advfn.com/stock-market/london/shearwater-SWG/share-news/Shearwater-Group-PLC-Notice-of-Results-and-Present/88649703

"Group CEO, Phil Higgins and CFO, Paul McFadden will be joined by Marcus Willett CB OBE, a member of the Group's Advisory Panel, who will provide an update on the cyber security market. Marcus was formerly the Deputy Head of GCHQ and its first Cyber Director. He has held posts across the wider UK intelligence and security community and is currently the Senior Advisor for Cyber at the International Institute for Strategic Studies, a world-leading authority on global security, political risk and military conflict. "

Gervais Williams's Miton UK Microcap trust has issued its prelims to 30th April.

It only mentions 2 or 3 companies specifically. MWE are their largest holding, valued at £2.6m, and it has this very interesting snippet:

Https://www.londonstockexchange.com/news-article/MINI/2022-annual-report-final-dividend-and-agm-notice/15545728

"Some may think that microcaps are companies of little consequence but many of them are world leaders in their fields and astute leadership can enhance their already dominant positions with sensible infill acquisitions and canny investment.

MTI Wireless, an investment made soon after the Trust's launch, subsequently rising to become one of the largest holdings, is a good example. It is currently being actively engaged by many of the largest 5G equipment manufactures because its 5G aerials have patented commercial advantages over others. It is a fact that well-chosen microcaps can, and often do, rise by multiples of their original price, and this then brings them into the sights of investment managers who, until this point have eschewed the smallest companies, leading to yet further share price appreciation."

Good to see AmcoGiffen and Network Rail working so closely together:

Https://www.amcogiffen.co.uk/news/better-together

The new issue of Shares Magazine out yesterday tipped SDI as one of its two weekly Great Ideas to Buy, saying it was "underappreciated" and "investors with an eye for the longer-run recovery of the economy and stock market should invest now".

This was tipped/printed before yesterday's update and upgrades, so many of the figures quoted are now out of date and are even better value post-upgrades! But there are a couple of nice snippets which resonate:

"It also helps that the group concentrates on industries where regulation is high, competitive moats can be enforced and capital investment is less likely to be impacted by economic downswings.

Not only does SDI’s growth stretch back multiple years, has been high-quality growth. Gross margins typically run at around 65%, high for a manufacturing business, while returns on equity and investment of around 22% to 25% beat industry averages."

News of a partnership with Nuvei for online gaming direct carrier billing. And interesting to see the comment about extending into Germany too.

Nuvei are NASDAQ-quoted with a $5 billion plus market cap.....

Https://www.globenewswire.com/news-release/2022/07/21/2483720/0/en/Eyas-Gaming-extends-its-partnership-with-Nuvei.html

Extracts:

"Eyas Gaming extends its partnership with Nuvei
Nuvei is enabling Eyas to accept all relevant payment methods across its entire UK brand portfolio, including carrier billing

July 21, 2022 09:00 ET | Source: Nuvei

London, July 21, 2022 (GLOBE NEWSWIRE) -- Nuvei Corporation (“Nuvei” or the “Company”)?(Nasdaq: NVEI) (TSX: NVEI), tomorrow’s payment platform, announces today it is extending its partnership with online gaming business Eyas Gaming, to provide the operator with a full payment solution across all its iGaming brands. Nuvei has also partnered with UK-based direct carrier billing provider Fonix to enable Eyas Gaming players to bill deposits directly to their mobile.

Building on a successful partnership that launched in October 2021, Nuvei is now enabling Eyas Gaming to accept payments via its industry-leading cashier technology across its popular gaming brands including the Merkur Slots and Merkur Casino in the UK."

"Fonix CEO Rob Weisz added: “Fonix is focused on facilitating conversion and expansion for partners through our carrier billing technology. Integrating Fonix's carrier billing solution means Nuvei can allow Eyas Gaming to turn on carrier billing with the flick of a switch. We're excited to launch our partnership to offer carrier billing to Eyas Gaming's players across the UK, with a future vision to make an impact across Germany too.”

Berenberg have raised their target price to 168p (from 156p):

Https://www.sharecast.com/equity/Capital_Limited_DI/broker-views

That's the sixth time they've raised their target price this year :o))

Berenberg have reiterated their Buy and 250p price target:

Https://www.sharecast.com/equity/Centralnic_Group/broker-views

Finncap have updated - they have a 265p target price. They conclude (note the large amount of firepower for acquisitions):

"Valuation

SDI Group is a premium stock, built over the past eight years as it has successfully and consistently gone about its business. This premium valuation is merited through the combination of good organic growth in its operations with accretive acquisitions. Management has consistently added value through the introduction and integration of new businesses into the SDI stable, providing it also with the capital and capacity to drive incremental organic growth (22% in FY 2022, 19% in FY 2021 and 4% in 2020).

Acquisitions are unmodelled. With the constant prospect of additive acquisitions boosting the underlying operating fundamentals, the valuation is consistently grown into. Given the M&A arbitrage that exists between the purchase price (c.4-9x EV/EBIT) paid historically and the current trading multiple, if its recent acquisitional track record is a guide to future performance and value creation, any acquisition is likely to give rise to further EPS accretion and an uplift in the target price.

Together with internally generated free cashflow of £7-9m, the company has the firepower (£20m loan facility, £16m of which is currently undrawn, and excluding £10m accordion) to acquire up to c.£4m of EBIT, which would imply c.£16m of EBIT in FY 2024, some 33% above current forecasts.

SDI currently trades on FY 4/2023 EV/Sales, EV/EBITDA and P/E of 2.5x, 10.6x and 16.3x, respectively, which includes the benefit of the follow-on OEM Atik camera contract. This represents a substantial discount to its peer group (Judges Scientific), which is seen as a comparable investment with a similar and proven buy and build strategy. Judges Scientific currently trades on FY 12/2022 EV/Sales, EV/EBITDA and P/E of 4.8x, 19.7x and 25.5x (Figure 15).

We are making no changes to our target price of 265p, at which price the stock trades on EV/EBITDA of 18.0x FY 2022, rising to 21.3x FY 2023 (Figure 14). We expect SDI to generate free cashflow of £7.4m in FY 2023, rising to £9.0 in FY 2024, which would imply a FY 2023 free cashflow yield of 2.7% rising to 3.3%. At the current price, the FCF yield is 4.9% rising to 6.0%. Contrast this with Judges Scientific, which is expected to generate £18.4m of FCF, and trades on a 4.0% FY 2023 FCF yield."

Great to see a Carbon Capture & Storage contract win whilst I was away on hols:

Http://uk.advfn.com/stock-market/london/getech-GTC/share-news/GETECH-Group-plc-Carbon-Capture-and-Storage-softwa/88567896

Cenkos have issued a new research note, summarising as follows:

"New Contracts & IEA Energy Investment Report Affirm Getech Business Model

Getech, a geoenergy and green hydrogen company, has announced a series of significant new contract wins and extensions totalling c£3.4m. These provide further evidence of how demand for Getech products continues to grow across the Group’s target sectors of green hydrogen, geothermal, critical minerals, and transitional petroleum (petroleum + carbon storage).

New sales include a £1.65m five-year extension to a geospatial service contract with a transitional petroleum customer and US$2.15m of new geoscience data and product licences, inclusive of a US$0.9m multi-product sale to a global critical minerals company (Getech’s largest minerals contract to date). Getech has also announced a contract with the North Sea Transition Authority, which is using Getech’s software, analytics, and expertise to locate and high-grade areas in the North Sea suitable for carbon storage.

These sales place Getech on track to deliver our forecast double-digit 2022 revenue growth and drive the Group’s orderbook to a record high, which provides a strong foundation for further multi-year growth.

Getech also uses its products and services to build strategic partnerships with natural resource asset owners and energy/mineral customers. Getech is leveraging these partnerships to ‘locate, develop and operate’ its own portfolio of low carbon assets. These direct asset investments have the potential to bring transformational value to Getech shareholders.

The strength and timeliness of Getech’s business model is underlined by the International Energy Agency’s (IEA) recent World Energy Investment Report. The IEA notes that as the World works to decarbonise it must also strengthen natural resource security. This means the need to substantially increase energy investment on a global scale has never been clearer or more urgent. This aligns with Getech’s business model, and the IEA details a strong investment growth outlook in each of Getech’s focus sectors. The IEA predicts global energy investment to rise over 8% YoY in 2022, reaching a total of US$2.4tn (well above pre-Covid levels). In 2022 energy investment is expected to total as much as 13% of global GDP, the highest level on record."

Excellent trading update whilst I was on hols, great to see.

Finncap issued an update note with a 12p target price. With $3m sales in H1 alone ITX are surely in a great position to announce that they've beaten expectations, given that they only need $1.7m of sales in H2 to meet Finncap's $4.7m expectations for this year.

Here's Finncap's conclusion FYI:

"Outlook.

Management anticipates at least one new European detergent product on the market this year, possibly more. North America continues to build a base of sustainable and recurring revenues and continues to progress new opportunities. The new plant-based super absorbent offers a considerable market opportunity in the hygiene market."

Been on hols and surprised to see the current stagnation. I'm assuming there's a seller out there, but all sellers run out of stock at some point if news flow continues to be good!

Great $10m contract win news securing a decent slug of recurring income over the next 7 years, vindicating the recent PSK deal at a stroke:

https://www.investegate.co.uk/mti-wireless-edge--mwe-/rns/significant-contract-win/202207180700077247S/

Shore Capital have issued a new note, with a 90p target price.

They forecast 4.1c EPS this year, i.e around 3.4p EPS. MWE had $12.5m cash at the last year end, so around 11.8p per share.

MWE are therefore on an ex-cash P/E of only 12.8 for the current year, which seems ridiculously good value for a company involved in water management, 5G and tech/defence.

Thaiger has posted elsewhere that results will be next Tuesday 26th July, though I can't see this in an RNS or on their web site. Perhaps he's contacted them directly. They're certainly arriving very soon indeed.

We already know the results will be ahead of expectations, with EBITDA at least £4.2m plus a £5.6m cash pile and a strong outlook. There's every reason to be positive here.

Progressive Research's forecast of 14.1p EPS for the current year to March'23 is likely to be increased after the results, so SWG will be well and truly on a single-digit P/E - and even less if you adjust for the cash which is approaching 20% of the £33m m/cap.

which will result in more investment in UK content creation and should benefit ADF by generating even more location filming here:

Https://www.thetimes.co.uk/article/1bn-sunset-waltham-cross-film-studio-gets-the-green-light-3svjsxhdp

"$1bn Sunset Waltham Cross film studio gets the green light

Hollywood is coming to Hertfordshire after planning officials gave the nod to the construction of a new $1 billion film studio in Broxbourne. The campus will be the first outside the US for Sunset Studios, the Hollywood film set where movies such as When Harry Met Sally and La La Land have been shot.

As the big streaming platforms battle it out for viewers, they are spending more on creating their own content, with the UK establishing itself as a key filming hub. Two of the biggest streamers, Disney+ and Netflix, are reportedly set to spend close to $50 billion this year making their own films and television series. “Sunset Waltham Cross Studios will be a world-renowned hub for content creation and creativity that will help assert UK’s role as a premier destination for creating entertainment, and a demonstration of our commitment to investing in the UK,” James Seppala, Blackstone’s head of real estate Europe."

Finncap have retained their 230p target price.

They've increased their forecast for the year just ended to 8.1p EPS, and have retained their "conervative" forecast of 8.8p EPS for this year for the moment.

They forecast 6.1p and 6.6p dividends respectively. And they see an underlying net cash pile of £7.2m rising to £9m.

They summarise:

"After upgrading our FY22 and FY23 gross profit and adjusted EBITDA by +5% in January, we conservatively leave our FY23 forecasts unchanged at this point, ahead of further detail at the FY22 results. We reiterate our target price of 230p based on 20x FY23 EV/EBITDA, and at a price of 153p, Fonix is trading on 12-month forward multiples of 13x EV/EBITDA, 5% EFCF yield, and 4% dividend yield, which compares to finnCap Tech 40 peers on 12x EV/EBITDA and 4% EFCF yield.

As it continues to deliver upon its investment case by expanding with existing clients, and winning new clients from a growing UK and international pipeline, we look forward to FY22 results on 22 September, further updates on its international launches, and the announcement of new contract wins.

- Fonix’s robust investment case –

As we explained in depth in our 23 September report, Fonix is focused upon leveraging its highly scalable, cloud-based platform to expand with existing clients and win new clients as mobile commerce and mobile payments continue to scale. The structural strength of its platform is demonstrated by it experiencing no churn from major customers in six years, and it is diligently expanding its market-leading technology outside of the UK when it is led by its existing clients. The successful execution of its strategy has driven Total Payment Volume (TPV) to £259m in FY22 from £125m in FY18, adjusted EBITDA to £10.3m in FY22 from £3.3m in FY18, and underlying EFCF to £7.3m in FY21, as management explained in more depth at the FY21 results. We conservatively forecast adjusted EBITDA growth of +8% in FY23, and we expect that any upside to our forecasts will be returned to shareholders through Fonix’s dividend payout ratio of 75% of adjusted EPS."

Continued:

"Brokers View – 221p increased valuation figure

Analyst Bob Liao, at the group’s NOMAD and joint broker Zeus Capital, has increased full year estimates now out at revenues of $617.1m ($410.5m), adjusted pre-tax profits of $57.2m and earnings of 17.4c per share.

For the December 2023 figures he has $654.1m sales, $63.9m profits and 18.8c of earnings per share.

On the basis of this week’s upgrades, he has lifted his valuation for CentralNic from 195p to 221p a share.

My View

The shares closed last night at just 130p, at which level in my view they are cheap and very soon are headed back well over their previous 154p High.

That step up in price may well occur ahead of the Interims announcement on Tuesday 30 August.

Even then they have still further to climb in price."

I'm holding both CNIC and KAPE and both look to have terrific upside:

Https://masterinvestor.co.uk/equities/the-internet-continues-to-offer-accelerating-growth-for-centralnic-and-kape-technologies/

"The internet continues to offer accelerating growth for CentralNic and Kape Technologies
By Mark Watson-Mitchell 20 July 2022

This week has seen two of my most highly favoured companies reporting good news to their shareholders.

What is more both of them issued strong first half-year statements, leading to guidance of even stronger second halves.

The shares of the two companies concerned stand out to me in offering substantial value and considerable upside.

Both companies have grown strongly through organic impetus and exceptional synergistic acquisitions over the last few years.

The companies are both steeped in the internet sector, one in cyber security and the other in domain creation.

And both are driven by incredible rates of annual recurring revenues.

CentralNic Group – 62% growth

On Monday morning CentralNic (LON:CNIC) issued a Trading Update for the first half to end June.

The group provides domain name services worldwide.

It operates through Online Presence and Online Marketing segments.

The company’s Online Presence segment provides tools for businesses to go online, such as reseller, registry operator, registry service provider, retail, and computer software channels, as well as strategic consultancy and related services.

Its Online Marketing segment offers advertising placement services for domain name owners, content website operators, and e-commerce website operators.

It also provides social marketing, search engine marketing advertising, and display advertising services.

As well as selling domain names to registrants.

Trading Update showing strong demand

Monday’s Trading Update showed an organic growth rate of 62%, spurred on by the growing strength of demand in the second quarter.

Its first half revenues rose 92% to $335m ($174m), while its EBITDA was 85% ahead at $38m ($20.5m).

That outperformance was largely due to the growth of the group’s Online Marketing Segment, which was driven by increased demand for its privacy-safe online customer acquisition services.

Ben Crawford, CEO, stated that:

“CentralNic has enjoyed a strong first half of the year with year-on-year organic growth now reaching a record 62%, a further improvement over the 53% reported for the twelve-month period ending 31 March 2022.

CentralNic continues to deliver sustainable growth thanks to our privacy safe solutions and the enormous scale of the market opportunities we are addressing.”

Commenting upon the group’s outlook the £375m market capitalised company reported that

“While the Directors remain vigilant concerning the current global macro-economic environment, the Board has confidence that the group will meet at least the upper end ofcurrent market expectations for the FY22 financial yea