Member Info for rivaldo

I came across this (not posted here before) from Aton Resources from two weeks ago re their appointment of CAPD as drilling contractors at Hamama West in Egypt:

Https://www.miningreview.com/gold/aton-contracts-capital-drilling-for-new-rc-drilling-programme-at-hamama/

Extract:

"Highlights:

Aton has contracted Capital Drilling to undertake a c. 5,000m infill RC drilling programme at the Hamama West development project, which is scheduled to start within the next 4-6 weeks, pending transfer of the drill rig from the Sukari gold mine to Hamama.
The drilling programme has been designed to upgrade the inferred mineral resource estimate at Hamama West, as Aton advances the project towards its development as an open pit starter mining operation and heap leach processing facility.
Sterilisation drilling will also be undertaken for the planned mine infrastructure facilities, as well as at the West Garida prospect 3km east of Hamama West prospect, which has returned assays of up to 99.6 g/t Au from surface sampling."

Hmmmm, bit of a setback there. However, wiping 3p off the share price (or £30m of m/cap) seems over the top imo for an event which in the very worst case would take £3m off EBITDA.

Either the UK's Gazprom arm will be sold/hived off to someone more acceptable, or their customers will have to find replacement suppliers pronto with INSE's help, so I'm doubtful the eventual impact will be anywhere near the full amount and perhaps will be pretty immaterial if an orderly replacement supplier is found.

15,000 shares just reported bought at 84p, against an 80p offer price - very keen.

with more coverage to come following a meeting with management:

Https://martinflitton1.wixsite.com/privatepunter/post/enteq-technologies-brighter-prospects-18-03-22

The BBC news just now had a big feature on the increasing use of heat pumps and heat exchangers in the UK.

The current enrgy crisis is only exacerbating the need for net zero etc and is playing into SUR's hands to its benefit.

A sudden surge - and on a very healthy 575,000 shares traded already today.

Cenkos' note today also has, beyond the hydrogen deal, a decent summary of why GTC are well placed in the current political climate:

"Broader drivers for Getech - Security of Supply

Ukraine’s invasion by Russia is adding strain to already stretched global supply chains and the energy and strategic metals markets. Russia is a major producer of precious, base and industrial metals, including nickel, copper and cobalt. In a period of low inventories of many metals globally, the invasion’s impacts on the sector could be material. As a result, increased pressure will be placed on mineral extraction companies to source new strategic mineral resources, diversifying supply away from Russia.

Leveraging Getech’s gravity and magnetic expertise and unique proprietary products such as Globe, Getech has been able to provide customers with new solutions for de-risking strategic mineral exploration, enabling exploration geoscientists to locate potential new mineral deposits more efficiently.

Likewise, with the UK and the US imposing bans on the importation of Russian hydrocarbons and commodity prices at record highs, there is a need for increased exploration investment to boost resources and production. Getech’s Globe product has been an essential tool in the hydrocarbon industry for over a decade, providing consistent, reliable data to de-risk and support the location of new hydrocarbons."

Cenkos have issued a new Buy note this morning, laying out the detail of the green hydrogen deal with the Scottish Highlands.

They summarise valuation-wise as follows:

"Trading at a Substantial Discount – The intellectual property within data and software driven businesses creates a significant barrier to entry and consequently valuations are currently higher relative to the broader market. Despite this, Getech trades at a discount of 30-40% to its data focussed peers on a 2021E EV/sales peer group of 3.6x. In our view, the valuation does not consider both the considerable asset backing to the business and the transformational value potential of the H2 Green investment proposition."

Cenkos have issued an update note this morning, reiterating their Buy and 200p+ target price.

They've left forecasts unchanged at 11.4p EPS and 13.8p EPS for the years just ending and starting - and they note that the $4.1m contract win "provides some possible upside to our visibility estimate".

In summary:

"Significant contract win Shearwater has secured a $4.1m contract with an existing customer to implement a new zero-day attack prevention system. After a significant proof of value process and demonstrable RoI by Shearwater, this new solution will effectively replace an incumbent solution of a well-known vendor. We continue to see fair value at 200p+."

"Fair value lies at 200p+. Good delivery this year to date is at odds with the current share price. A rating of sub-4x EV/adj EBITDA in FY22E is anomalous and fair value for such a business with a cash positive balance sheet in our opinion lies in excess of 100% of the current share price. Buy."

Nice to see a bit of buying interest today here - 103,000 shares bought in five lots at 14.25p.

News from FNX - they will be running this year's Stand Up To Cancer campaign, and they're introducing £40 donations for the first time:

Https://blog.fonix.com/fonix-the-cherry-on-top-for-bake-off-b1f78f1f319c

"Mar 16
·Fonix: The cherry on top for Bake Off"

"SMS donations will be at the forefront of this year’s Stand Up To Cancer campaign. Donors will be able to send a text message to donate either £10, £20, £30 and they will also be running £40 for the very first time. The donation will be charged to their mobile phone bills.

Fonix has identified the trend for higher donation price points leading to a larger volume, and subsequent larger value, of Gift Aid declarations. Since the hugely successful introduction by Fonix of the £20 price point in 2016, the £30 price point in 2018 and more recently the £40 price point the extra 25% makes a big difference. By calling out to £40 donors that their Gift Aid declaration can add £10 to their donation at no extra cost to them, Fonix has seen upwards of 70% of £40 donations covered by a Gift Aid declaration."

Apparently (per posts elsewhere) the post-results presentations have floated the idea that MSALABS could be spun off separately.

It was mooted that MSA could be a $80m+ business and open to comparing it to ASL, i.e a 30% EBIT margin business. At that level of profitability it wouldn't need an outrageous P/E to cover the entire current CAPD m/ cap.........

I can do no better than copy here dangersimpson2's excellent summary posted elsewhere:

"When I did a follow-up on CAPD at Mello Monday in November, I focussed on two possible ways of valuing MSALABS.

The first was a listed growth company multiple of 8xTTM P/S which came out at $68m. Since then listed growth company multiples have contracted, but the TTM Sales is now $16m and the forecast growth more rapid. Capital also own about 2% more of MSALABS. If we went for a 6x Sales multiple to reflect current market conditions this would be a $74m valuation for CAPD's stake in the business.

The second methodology was taking the future potential of the business and discounting it back to the present. I got a $66m valuation by taking $50m revenue in 2024, 25% EBIT margins, 10xEBIT multiple and a 12% discount rate. This is why I was particularly interested in what they thought about the $50m, since it now looked a little light given the recent MSALABS performance.

Taking the now $80m potential, say 4 years out, 30% EBITDA margins then you get about $24m EBITDA. According to the appendix to the Capital results presentation, competitor ALS is on 11.4x 2023E EBITDA. Applying the same multiple gives about $270m for MSALABS in 2025 or about $175m today if we discount it back 4 years at 12%. 12% may be a bit light for the area of operation so that would be $132m if you want a 20% discount factor. So that is potentially a material increase in upside valuation that was announced in today's call.

All of this requires a lot of future extrapolation and we should be wary about paying up for an uncertain future today. However, one thing is still clear to me: by applying a single-digit multiple to the EBITDA of the whole of CAPD, all the brokers currently materially undervalue the potential of MSALABS in their notes. That discrepancy has become even more severe following recent results, and now potentially stands at well over a $100m valuation gap."

Buyers paying 405p now. Back to 450p and more soon at this rate.

The "substantially ahead of previous guidance" results are on 22nd March:

Https://www.investegate.co.uk/kape-technologies--kape-/rns/trading-update--presentation---notice-of-results/202201180700057407Y/

Cenkos currently have a fair value of 240p or more (i.e "in excess of twice the current price", which was 119p at the time).

At present, given SWG are about to move into a year set to produce around 14p EPS, I'd say given the track record etc from 160p-170p would be a decent first target price.

But assuming SWG meet expectations for this year about to end, then produce a good and in-line set of H1 numbers to Sept'22, that range could be moved up again to nearer 200p.

There's an excellent write-up about Calnex on Sharescope FYI:

Https://knowledge.sharescope.co.uk/2022/03/09/calnex-solutions-plc-lse-clx/

Ticking up again already today and looking very strong.

Interesting in the current climate to note CLX's military applications:

Https://www.calnexsol.com/en/article-display/124-network-emulation/1581-application-performance-testing-for-aerospace-and-defence

Https://www.calnexsol.com/en/resources/network-emulation-article/1307-satellite-communications

Cenkos and Progressive Equity forecast 11.4p EPS and 11.5p EPS respectively for the year ending in just 14 days' time.

For the year about to start, they forecast 13.8p EPS and 14.1p EPS respectively.

This contract nicely reinforces those expectations.

As if that wasn't cheap enough - especially in the cyber security market - SWG have 20%+ of their m/cap in a £4.4m cash pile.

Even if SWG were to miss H2 forecasts a little it's still on a bargain basement rating.

CAPD are mentioned today as being the drilling contractors in a very positive RNS from Altus Strategies about Diba & Lakanfla - "further encouraging drilling intersections" etc:

Https://www.investegate.co.uk/altus-strategies-plc--als-/rns/significant-intercepts-from-diba---lakanfla--mali/202203170700030537F/

Https://masterinvestor.co.uk/equities/taking-a-small-cap-look-at-hsp-rcn-epwn-and-fnx/?mc_cid=a22b015b6d&mc_eid=db9f9bbaf2

"Fonix Mobile (LON:FNX) – further advance expected after strong interims and a cracking 99% ARR

On Tuesday morning this group, which provides mobile payments and messaging services for clients across media, telecoms, entertainment, enterprise and commerce, issued its interim results for the six months to end December 2021.

They showed a 16.2% increase in revenues to £28.6m, a 20.3% advance in adjusted pre-tax profits at £5.2m, helping to push up its half-time earnings by 21.4% to 4.4p per share.

All sections of the group’s business saw increases in the six months.

Its clients list includes blue-chips, such as BT, Comic Relief, ITV, Global Media, Children in Need and Bauer Media amongst hundreds of others.

When consumers make payments, they are charged to their mobile phone bill. This service can be used for ticketing, content, cash deposits and donations.

It also offers messaging solutions, in fact, last November and December saw record levels of business, with some 84m SMS messages being processed in a single month.

The group’s broker, finnCap, considers this business to be highly scalable and is expecting a good second half to round off the year to end June.

Analysts Andrew Darley and Michael Hill estimate £53m (£47.7m) revenues, profits of £9.6m (£8.3m), earnings of 7.9p (6.9p) and a dividend of 6.0p (5.2p) per share.

For the coming year they foresee £58.4m sales, £10.6m profits, 8.8p earnings and a 6.6p dividend per share.

I really like the generation of this group and consider that its shares, now at 153.5p, have great upside potential.

They peaked last year at 190p and could easily be up there again soon."

Crikey - a $4.1m contract win!

Over 3 years, but still.....a "significant three-year advanced endpoint cyber defence solution contract with a global financial organisation" sounds rather impressive:

Https://uk.advfn.com/stock-market/london/shearwater-SWG/share-news/Shearwater-Group-PLC-Contract-Win/87578219

"Brookcourt Solutions secures $4.1 million contract with a global financial organisation

Shearwater Group plc (AIM: SWG), the organisational resilience group that provides cybersecurity, advisory and managed security services, is pleased to announce that its group company, Brookcourt Solutions, has secured a significant three-year advanced endpoint cyber defence solution contract with a global financial organisation, totalling $4.1 million. The contract contributes to the Group's current full year expectations.

Under the terms of this contract, Brookcourt Solutions will be responsible for deploying one of its technology partners' cutting-edge endpoint security software solutions across the breadth of the financial organisation's operations. This solution will improve the resilience of the organisation's digital estate.

Phil Higgins, Group Chief Executive Officer of Shearwater, commented:

"This is an outstanding contract win for Brookcourt Solutions, demonstrating our deep understanding of best-in-class technologies and the strong partner portfolio that we have on offer for our customers. Being trusted to efficiently deploy cutting-edge, robust, effective and cost efficient cyber security solutions to global financial organisations of this calibre is something that we are very proud of."