Member Info for rivaldo

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/

"Kape Technologies – the good news keeps on coming

Yesterday morning Kape Technologies (LON:KAPE), the digital security and privacy software business, issued its Trading Update to end June.

The company is a leading ‘privacy-first’ digital security software provider to consumers. Through its range of privacy and security products, it focusses on protecting consumers and their personal data as they go about their daily digital lives.

It develops and distributes digital products in the online security space.

It operates through Digital Security, Digital Content, and Digital Privacy segments.

The company offers CyberGhost, ZenMate, Express, and private internet access that provide cybersecurity SaaS with a focus on providing of virtual private network solutions.

It provides Intego, a cyber security SaaS provider that focuses on the provision of malware protection.

In addition, the company offers software development; market research; consulting; and professional services.

Trading Update – with an 88.6% ARR

The first half witnessed and incredibly strong start to the current year, with sales expected to be some $301.6m ($95.5m), with over 88.6% annual recurring revenues.

Kape experienced strong organic growth across the business, with demand for privacy and security products on the rise.

Ido Erlichman, CEO, commented that:

“Kape has made a strong start to 2022, delivering on our organic growth ambitions and, more importantly, servicing c.7m customers who choose to use our products.

This has been our strongest H1 to-date, having delivered six consecutive years of growth and, with the integration of ExpressVPN progressing to plan, we are ideally placed to further capitalise on this rapidly growing market.”

Broker’s View – 405p on a 12-month view

Caspar Erskine, analyst at Singer Capital Markets, rates the group’s shares as a Buy, with a price aim of 405p on a 12-month view.

His full year estimate is for $618.5m revenues ($230.7m) a more than doubled adjusted pre-tax profit of $159.1m ($72.8m) and earnings of 39.2c (29.8c).

For 2023 he sees $690.7m sales, $181.7m profits, and 44.6c of earnings per share.

My View

I just love this company, even though it is now clearly outside of my normal ‘Small Cap’ market value range.

To me, just like with CentralNic, it is an arithmetic and highly scalable situation.

The growth in its ARR is so appealing, while the cash generation it creates is fantastic.

The group’s shares went up to 690p on the announcement late last year of the Express VPN acquisition. It may take a while to get back up there again but I am still firm in my prediction of 600p.

They closed last night at 287.5p – a very strong hold."

Progressive have issued a new note and have raised their forcasts, with EPS rising to 9.1p this year based on £11.2m adjusted PBT, due to what looks like a lower tax charge:

Https://progressive-research.com/company/sdi-group-plc/

"Upgrading FY23E and introducing FY24E

SDI has started FY23E with good momentum and, with travel restrictions having been lifted, further geographic expansion is likely. We have increased our FY23 estimates, raising revenue to £57.9m from £53.1m and adjusted EBITDA to £13.9m from £13.7m. We introduce FY24 estimates with revenue at £60.2m and adjusted EBITDA £14.4m. The Covidrelated orders at Atik were considered one-off, however sales have continued at a high rate into FY23. Although no longer one-off, it is likely that at some point demand for PCR equipment will normalise at a lower level, and we have incorporated this into our estimates. We also haven’t assumed a contribution from potential new acquisitions, which offers upside to our estimates.

Summary and outlook

The group is in a strong position financially, with good operational cash flows and a solid order book. Management continues to seek targeted acquisitions, funded by cash flows from existing businesses and its £20m undrawn facilities, coupled with access to a further facility if required. The record FY22 performance demonstrates the continued growth potential from a diversified group of niche businesses. We believe that SDI is in a strong position to continue to deliver its successful ‘buy and build’ business model, with good opportunities to consolidate the highly fragmented markets that the group targets. Results with acquisitions so far have been exceptional, delivering strong financial returns and operational synergies.

The outlook remains positive with further organic growth and acquisitions uplift expected, demonstrating continued commercial demand for the niche technologies that SDI provides. We look forward to further positive updates as SDI has entered its current financial year (FY23E) from a position of strength."

Nice to see a pre-market 500 share buy at the full 160p offer price at 7.34 this morning :o))

EDIT - followed by another buy at 155p at 7.52 am....

SUR's Everwarm have been winning lots of new contracts on Bidstats, including only 3 days ago a £5m energy efficiency contract in Yorkshire:

Https://bidstats.uk/tenders/2022/W29/778960982

Encouraging year end trading update this morning.

In particular £10.3m EBITDA is nicely above £10.1m forecast, so should result in around 8p+ historic EPS.

The number of customers is growing well and the outlook is very confident:

"Outlook:

With high levels of repeating revenue, a strong exit run-rate for FY22, particularly in newly established international markets and a growing pipeline of client prospects across all sectors and markets, the Board continues to be confident in the growth potential for Fonix going into FY23 and beyond."

With around a 6p forecast dividend, and say 9p-10p EPS this year, FNX looks very good value at these levels imo.

Fantastic results, well ahead of even the most recently increased expectations.

PBT at £11.9m compares to Progressive's latest forecast of £10.5m

And 8.7p EPS thrashes the upwardly revised forecast 7.9p EPS.

The outlook is very confident and has also been upgraded once again through to April'23. Knowing SDI's management the new current year number will likely once again prove to be extremely conservative and will be upgraded several times.

I note the comment that SDI expect "to acquire additional businesses" (plural) in this financial year.

The new Sizewell C nuclear power plant has just been given the go-ahead, costing £20 billion:

https://www.bbc.co.uk/news/uk-england-suffolk-62235221

This should be good news for RNWH given Seymour Civil's existing large presence at Sizewell B (and Sellafield etc).

Been on hols so pleased to see the excellent HI update. KAPE looks ridiculously undervalued imo.

Given $88.5m EBITDA in H1 alone, KAPE look like thrashing the guidance of $166-$172m for the year since they've already achieved 51.4% of the top of that range in H1 and the outlook signals continued growth.

With huge recurring revenues and such a low P/E KAPE should be heading towards 500p-600p ceteris paribus (that's one for Latin lovers).

Netflix's CEO says "Content spend will continue to grow but be “moderated”, with around $17 billion of spend each year through to 2023.

Which should be continued good news for ADF, particularly given the further growth in spending from the likes of Disney, Paramount, Amazon, Apple TV etc etc:

Https://deadline.com/2022/07/netflix-content-spending-plateau-17-billion-1235072812/

The US rig count continues to climb and is now at 756, up 4 on the week:

Https://rigcount.bakerhughes.com/

I've been on hols, but made some notes on the investor presentation which was just before I left which might be of interest:

- SABER is a sticky rental model with ongoing revenues from maintenance, spares and support, and is already in use by prospective customers, with two levels of patent protection from Shell's own design and NTQ's addition and inventions
- the 5 acre Houston site is in the books at $2.5m. So very useful asset backing on top of the $4.8m cash and the $3.5m debtors
- year end debtors are high sue to accelerating Q4 sales and are fully recoverable
- testing has led to "derisking" of SABER and "a better tool" following design refinements. The engineering team are very happy with the finished product, and NTQ are confident of SABER revenues this financial year
- all NTQ's American customers are keen to test SABER. Field testing agreements are already in place, and helpfully NTQ's selected partners have good control over their operatins without having to contact their end customer
- next SABER news flow will be a downhole field trial this year
- NTQ have plenty of cash for SABER and everything else, especially given the £1m O/D facility which will be available immediately on the first SABER sale, so there will be no need to raise money
- SABER are addressing a $2 billion and growing market dominated by two companies, so there's plenty of pent-up demand, particularly from domestic and national energy operators

Been away on hols, so pleased to see SUR's share price so stable - it's certainly outperforming the market by some margin at present.

On such a low rating, yet with excellent prospects and high recurring income I'm happy to hold for significant upside. I'd rather management bide their time and wait for the right acquisition(s), and the current environment should be working in their favour as vendors reduce their expectations - and prices.

Been on hols, so great to see (1) the excellent Q2 trading update and (2) the huge global expansion of the Chrysos partnership. I'm sure the market hasn't yet fully cottoned on to the full value of Chrysos, with over $80m of revenues per annum now anticipated from MSALABS in the relatively near future.

With $138m revenues in H1, CAPD are surely highly likely to beat the guidance of $270m-$280m for the year, given "the strongest demand since the Company's inception" as per the outlook statement.

It's worth ruminating on the outstanding investment portfolio figures posted elsewhere by darlocst taken from the CAP conference call post-results. These must beat the performance of almost any other investment manager anywhere:

- Net $11.5m invested since Jan 2019, total return 302%.
- Value at June 30 $47.3m.
- $26.4m revenue generated from investee companies in H2 2022.

I note that today's Sukari update from CEY has been well received by the markets.

Hopefully the current share price upturn will run up to and past the H1 results on 18th August since we know the numbers and outlook will be so rosy.

Been on hols, so great to see the excellent H1 trading update. CNIC must be very confident to state already - only halfway through the year - that they "will meet at least the upper end of current market expectations".

Great to see the share price responding so well given current markets. Inclusion in the AIM 100 and AIM UK 50 indices may have helped with a small push.

CNIC remain hugely undervalued relative to sector comparators and other fast-growing tech companies. The H1 results will be on 30th August and should continue to see the share price climb nicely given what we now know and the rosy outlook going forward.

For those who missed yesterday's RNS, the prelims are out tomorrow, with an InvestorMeet presentation on Friday:

Https://www.investegate.co.uk/sdi-group-plc--sdi-/rns/notice-of-results-and-investor-presentation/202207191420040154T/

I'm looking forward to them. We already know that revenues and profits for the year will "materially exceed current market expectations" - and that "we expect FY2023 to be the Group's best year yet, also ahead of current market expectations".

ZOO's results and outlook this morning were excellent. They're on much too high a multiple for me to consider investing in them, but there's some commentary in their RNS which bode well for ADF, for example

"Three DTC streaming services were launched before or during the period of the pandemic by major US media companies: HBO Max from Warner Bros Discovery (the merger of AT&T's WarnerMedia unit and Discovery Inc. which was completed in April 2022), Pea**** from NBCUniversal (a subsidiary of Comcast) and Paramount Plus from Paramount Global (formerly ViacomCBS, the merger of Viacom and CBS which completed in December 2019). Following their availability in the US and some English-speaking markets, these services have only recently begun their international rollout. Although in this regard they lag the first of the major DTC services, Disney+, by over two years, all three have publicly stated their commitment to making their services available across many countries.

The growing availability of multiple global streaming services in many countries is creating increased competition for viewers. The appeal of each of these services rests entirely on the strength of the catalogue of content they offer. To maximise this appeal the operators are discontinuing their licensing of some or all owned content to other services so that these titles are exclusively available on the operator's platform. This means that some high value content that was previously included on other services is being withdrawn, thereby potentially diminishing the perceived value of those other services.

Since content is the key differentiator of one service from another, each service is compelled to continue to add new, fresh, high-quality titles to attract viewers and retain those who already use the service. This has propelled the volume of new original programme production to an all-time high. Market commentator Ampere Analysis reported that the global spend on original programming reached $220 billion in 2021 and is expected to grow strongly in 2022 and beyond. Of this total, around $50 billion was estimated to have been spent by major streaming services."

"The second area of competition for major streaming services is in relation to content. A differentiated and attractive catalogue that is updated regularly is essential to win and retain viewers, and therefore the rights to highly valued TV shows and feature films are selling to the highest bidder."

New £2.7m contract win for AmcoGiffen in Scotland for transformation of derelict land and reduction of flood risk:

Https://projectscot.com/2022/07/amcogiffen-to-lead-2-7m-transformation-of-barrheads-carlibar-park/

It looks like there's a major new phase of nuclear decommissioning happening at Sellafield for Cumbria Nuclear Solutions, in whom Shepley are a major player, judging by this which notes that the Decommissioning Delivery Partnership has been extended by 5 years to 2026:

Https://www.neimagazine.com/features/featurecranes-support-new-phase-at-pfsp-9772782/

And RNWH have set up a web site for their new Arq collaboration to promote their capabilities in the potentially huge drive for rail electrification:

Https://arqrail.com/about-us/

Only 12 days to go to the H1 trading update on 18th July. No wonder the share price is rising :o))

I thought this section from the recent Cenkos research note was useful as regards setting out the various growth areas CLX are involved in:

"Operating highlights The relentless move into the Cloud by enterprises of all sizes continues, with increasing numbers moving their business-critical applications and services into web environments. The needs of these companies are met b datacentre operators, a market dominated by hyperscalers such as Amazon (AWS), Microsoft (Azure), Meta Platforms and Alphabet (Google Services). The combined capital spending of these organisations on datacentre infrastructure has provided significant growth opportunities for companies providing computing and storage infrastructure, networking, security, telecoms and related sub-sectors.

The Testing and Measurement sector is another one benefitting from long-term and substantial tail winds, both from the relentless drive of cloud adoption but also the 5G transition. Calnex continues to focus on its product innovation and recent new products and upgrades have been very well received by customers.

Calnex’s support for very high-speed interfaces (up to 400G) as well as the various interface formats used in very high-speed interfaces (e.g. PAM4 – pulse amplitude modulation with four levels) has driven order-intake FY22. The focus on O-RAN Alliance conforming hardware by increasing numbers of equipment vendors has also driven business activity.

Research and development – evolving product portfolio

Investment in R&D has continued across all product categories, with a total of £3.9m R&D investment in the period (FY21: £3.3m). Calnex has hired 19 people during FY22, with the total number of employees reaching 113. Post period end, the acquisition of iTrinegy was announced, further increasing the total number of employees. We forecast a substantial increase to £5.3m R&D in FY23E, an increase of 35.4% versus FY22 and representing 19.7% of FY23E forecast revenue.

During FY22 Calnex released a new 5G Over-the-air (OTA) capability for the Sentinel Field Synchronisation testing solution, addressing emerging 5G signal formats, as well as the previous 3G and 4G signal formats with enhanced solutions.

In addition, as confirmed in the 1 March 2022 trading update with a large datacentre operator (hyperscaler) order, the implementation of time distribution across data centres has presented Calnex with the opportunity to develop and grow a new market opportunity for the Sentinel product range. This has been the driver behind the development of the Sentry product, essentially a rack mountable version of the Sentinel OTA tester, launching in coming months (see Chart 1). Calnex indicates that sales to hyperscale customers who are investing in their data centre operations are progressing well."

Good to see the share price bouncing somewhat. Perhaps a seller has been cleared.

As well as the WH Ireland note below, Arden also issued an update after the trading statement, with a 300p target price.

They forecast 18.8p EPS this rising, to 20.8p EPS next year, with 1.6p and 1.8p dividends.

And Progressive Equity's new note forecasts 19.6p EPS rising to 21.9p EPS (with 1.5p and 1.6p dividends).

FinnCap have reiterated their 80p target price, and state that a full plant with £75m revenue would drive their valuation up to 150p.

Zeus Capital have a 110p DCF valuation at present. Here's a handy summary of where SCE are at from Zeus's new note:

"Surface has seven active OEM customers. OEM 6, 7 and 8 are now in series production. 2023e and 2024e will see a significant ramp up in manufacturing; particularly with OEM 10 coming on stream, and new activity with OEM 5"

And in conclusion:

"The key message on the outlook remains that good progress is being made across the business, and profitability should be achieved in 2022e. The total multi-year orderbook is now c.£180m and Surface has stated that further contract wins are likely in H2. As with the scaling-up of any manufacturer there is always some execution risk, but the Group is well on-track to becoming a volume supplier to the OEMs. Our DCF-based valuation is 110p, indicating good potential upside."