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Strategic Equity Capital this morning announced their results to 30th June - and INSE are a new holding in their portfolio. So much so, that INSE are now their fifth largest holding, at a cost of £9.1m and 6.3% of their total portfolio.

Here's the summary of their investment thesis:

Https://www.investegate.co.uk/strategic-equity-capital-plc--sec-/prn/final-results/20210930070000PF149/

"Inspired (formerly Inspired Energy)

Description

Is a leading UK B2B corporate energy and ESG services specialist. The company works with their clients, generally large corporates, to procure energy cost effectively, audit and report their usage of it, and help them to optimise their energy efficiency. The company has a strong focus on sustainability with a number of services that help their clients measure, report and improve their ESG performance.

Thesis

Inspired is a leader in the growing, but fragmented, corporate energy services market. The increasing complexity of corporate energy requirements, and increasing regulatory and sustainability imperatives will support continued strong organic growth for the company with a likely ‘flight to quality’ leading to further increases in market share.

The business model of the business is strong with high quality of earnings from long term contracts, high margins (40% EBITDA margin) and return on capital and good cash conversion. The fund’s initial investment was made as part of a placing intended to strengthen the balance sheet and provide firepower for the company to undertake a number of bolt on acquisitions to continue to consolidate its position in the market. Although the company’s revenues were depressed due to lower corporate energy usage over lockdowns, there is significant opportunity for a rebound in revenues, and in the share price, when there is a return to a more normalised environment.

Over the medium term there are strategically attractive opportunities, both organic and inorganic, to gain market share and broaden the range of services offered, particularly in ESG-related areas.

Developments in the period

The company delivered results that were in line with expectations, although trading remained subdued due to Covid restrictions over the period weighing on corporate energy usage. The core corporate division experienced a significant 20% organic decline in revenues as a result, although through management actions margins and cash conversion was robust."

Part two of ST's tip posted elsewhere:

"On this basis, Pelatro’s enterprise valuation of £16m equates to a modest three times forecast revenue, almost all of which will be recurring or repeat business. That’s an incredibly low rating for the sector as the average rating for software companies operating Software-as-a-Service models is around eight to 10 times ARR. Furthermore, Pelatro is only being valued on nine times cash profit estimates to enterprise valuation, almost half the rating of finnCap’s Tech 40 Spec Software index. The valuation discrepancy is even more anomalous when you consider that the directors are working on a “strong pipeline that is expected to secure recurring revenue and lead to attractive growth in 2022.”

Cenkos’ expectation of 25 per cent annual revenue growth next year looks conservative to me especially as the directors are leveraging Pelatro's position in 'big data' analytics by entering the mobile advertising space, a market that is worth $100bn and one projected to grow to $221bn by 2024.

The shares have traded sideways since my last article (‘Marketing re-rating potential, 21 June 2021), and I see material upside to my 100p target price. Strong buy."

ST's tip has been posted elsewhere now, so here it is - part one:

"Aim-traded Pelatro (PTRO:39.5p), a company that makes its money by providing 19 large telecoms operators with precision marketing software, has delivered a step change in profitability and completed its move to an annual recurring revenue (ARR) model. This materially de-risks the investment case and means investors are far more likely to attribute a higher valuation to its growing income stream.

Pelatro uses 'big data' analytics (artificial intelligence, machine learning and other analytical techniques) to reveal patterns, trends, associations and behavioural traits of telecom subscribers. These insights enable mobile telecom operators to monetise their data, boost average revenue per user and their share of subscriber spend while also reducing churn rates.

In the first half, the group leveraged its position with one of its large Asian telcos, which has 230m subscribers, whereby Pelatro will now be paid a fixed amount each quarter for all its base products (including annual maintenance support and ad-hoc change requests), thus creating a valuable ARR stream. Incremental revenue of US$100,000 from the contract for the 2021 financial year is expected to ramp up to US$500,000 from 2022 onwards under the three-year agreement. In addition, the group won a recurring revenue campaign management contract with another Asian telco that should generate US$1.5m of revenue.

Existing customers have also been active in purchasing additional modules such as enterprise contract lifecycle management (automates and streamlines contract processes during key stages) and change requests, which combined will produce US$1.5m of revenue this year. Pelatro is benefiting from its share of client revenue gains above minimum contractual payments, too.

So, with the cost base relatively fixed, and revenue scaling up, the operational leverage of the business model is kicking in. First half cash profit surged by 141 per cent to $1.66m to deliver adjusted operating profit of US$0.76m (loss of US$0.11m in first half of 2020) on 51 per cent higher revenue of $3.46m. Pelatro’s full-year guidance points to annual revenue increasing 80 per cent to US$7.2m, an outcome that more than supports house broker Cenkos Securities’ full-year cash profit estimate of US$2.5m."

Zeus have now raised their forecasts - worth noting that Zeus' increased forecasts are:

this year : 10.8c EPS
next year : 12.1c EPS

So CNIC will soon be on a current year P/E of only 12.9 for 2022.

Good news - an earnings-enhancing $10m acquisition of a Texas-based lab. The ambitions of the acquiree are clear to see - the deferred consideration is capped at a whopping $60m based on huge and immediate growth, and the vendors are taking an all-share purchase consideration and are locked in for two years:

https://uk.advfn.com/stock-market/london/ekf-diagnostics-EKF/share-news/EKF-Diagnostics-Holdings-PLC-Acquisition-of-Advanc/86147872

Good news - another internally funded acquisition, and excellent value too, with $6.5m buying another $1.5m EBITDA post-acquisition.

So a very cheap multiple, and lots more web sites to monetise with CNIC's own additional services:

Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Acquisition-Announcement/86147894

Terrific news - RNWH's Carnell subsidiary have won the maximum 5 lots on the new National Highways framework over the next 6 years, 3 of them in a JV with RNWH's other subsidiary AmcoGiffen. This is worth a very nice £147m.

And these are "the longest duration, highest value contracts in Carnell’s history. Coupled with the move into road restraints, this provides a fantastic, solid foundation on which to grow and develop our business further in the coming years.”

Https://www.carnellgroup.co.uk/national-highways-sdf-success/

"National Highways SDF Success

We are delighted to announce that National Highways (formerly Highways England) have awarded us five Lots on the new Scheme Delivery Framework (SDF). The total value of the contracts will be £147m over 6 years, with the new delivery model commencing in January 2022.

The five Lots are the maximum number that could be awarded under the restricted procurement rules that National Highways have applied to the new framework. Three of which are in a Joint Venture (JV) with our Renew sister company AmcoGiffen.

Contracts Awarded

Civil Engineering: Central Super Region – Areas 6, 7, 8 and 9.
Drainage: North East Region – Areas 12 and 14.
Road Restraints: Central Super Region – Areas 6, 7, 8 and 9 in a JV with AmcoGiffen.
Road Restraints: North West Region – Areas 10 & 13 in a JV with AmcoGiffen.
Road Restraints: North East Region – Areas 12 & 14 in a JV with AmcoGiffen.

SDF will replace the current Construction Works Frameworks (CWFs) and ASC/PAD contracts. The phased introduction means that our current Civil Engineering, Drainage and Road Lighting & Electrical CWF contracts continue in Area 10 until 2023 and Area 6&8 until 2024.
A strong outlook

Delivering these new framework contracts as a Tier One supplier to National Highways, builds a robust forward programme through to 2027/28. The move into road restraint work alongside AmcoGiffen diversifies our portfolio of work and provides further opportunities.

Andrew Sharp, Carnell Deputy Managing Director commented:

“We have built a strong reputation on safely delivering drainage and civils schemes on the strategic road network over the last three decades. I am thrilled to have secured these SDF contracts, which will see us further develop our collaboration with National Highways and fellow delivery partners. These frameworks represent the longest duration, highest value contracts in Carnell’s history. Coupled with the move into road restraints, this provides a fantastic, solid foundation on which to grow and develop our business further in the coming years.”

News of a dating services partnership with Venntro on 2,500 web sites - note the mention of international expansion:

Https://blog.fonix.com/fonix-partners-with-venntro-media-group-a-global-leading-provider-of-dating-platforms-d8668a20a25a

"Fonix partners with Venntro Media Group, a global leading provider of dating platforms
Sep 23

We’re excited to announce that we’ve partnered with Venntro to enable users to conveniently subscribe to dating services.

Venntro is the global platform of choice for media brands and online marketers to deliver fully-branded online dating sites.

The partnership will see the roll-out of carrier billing into the 2,500+ white labelled dating sites that Venntro supports giving consumers who use the services more choice, flexibility and convenience when either paying for the subscription or any one time purchase option across the platform.

A registered user opting to pay via carrier billing will be automatically and securely identified, enabling them to complete their purchase with a simple and seamless 2 step payment experience, without having to enter any further information.

The roll out of carrier billing started in August; so far Venntro and its partners have seen a huge +28% growth in new same-day subscribers — users that upgrade on the day they join a dating site.

We’re thrilled to be working with Venntro; it’s great to showcase the exciting work that we’ve been doing behind the scenes to ensure that the technical integration and user experience will deliver real value to the product and Venntro’s client base.

There’s lots of promising opportunities ahead, not least with expanding payment options but also looking at supporting Venntro internationally."

Looks like Unkmind Holdings have been buying more shares on the open market, even before the additional 45,941,924 shares they're taking up in the placing.

Per KAPE's web site they last had 135,396,897 shares, but per today's RNS they now have 137,045,026, so they've bought around another 1.7m shares and have 61.18% prior to the placing:

Https://uk.advfn.com/stock-market/london/kape-technologies-KAPE/share-news/Kape-Technologies-PLC-Holdings-in-Company/86137303

RNWH gets a brief tip/mention in today's Mail on Sunday, in an article about AIM and which companies to buy:

Https://www.thisismoney.co.uk/money/share-investing/article-10027699/Volatile-AIM-Wild-West-brave-chance-strike-gold.html

"Lee Wild, head of equity strategy at wealth platform Interactive Investor, also likes.....engineering infrastructure business Renew Holdings. All fit Millar's template of niche market leaders.

Wild adds: 'All three have been brilliant in terms of share price performance, but they also pay dividends to shareholders.'"

by Mark Watson-Williams:

"Kape Technologies (LON:KAPE) – a really cracking performance

Yesterday’s announcement of its interim results to end June helped to push the shares of this digital security and privacy software business even higher.

After last week’s news of its massive £635m bid and fund raising for the ExpressVPN virtual private network operator, investors are showing even more interest in the group’s potential.

Revenues were 61.9% higher at $95.5m in the first half, of which nearly $60m are recurring revenues (I love it). Operating profit was up almost 300% at $13.6m, helping to boost earnings 70% to 9c a share.

Estimates for the end December year suggest $200m ($122.2m) of sales, $64m ($30.8m) of profits, with earnings of 24c per share.

Next year already looks very exciting with almost $620m of sales, $160m profits, with 41c of earnings being predicted.

In less than nine months we have done very well with this group’s shares, rising over 240% in the period.

However, I consider that they have a great deal higher to climb and are a strong hold at 415p."

I finally managed to read through the new 31 page note from Finncap, and thought the following extract was a nice insight into FNX's growth path for the current year:

"In FY21, Fonix has maintained its 100% client retention rate and grown its active client base to 111 from 98 at FY20 and 105 at H1 21. It has continued to demonstrate strong traction in both existing and emerging sectors such as mobility, ticketing, and dating, where it recently launched services with a multinational tech company operating thousands of online dating sites globally.

In FY22, Fonix’s client additions could further accelerate following the doubling of its sales team in early FY22 through the addition of 2 new employees, and a new partnership with a leading technology provider that could open up a considerable pipeline of opportunities in the UK and international markets.

Fonix established connectivity for its first international operation in Austria in FY21, where it could harness the deep understanding of the regulatory framework of one of its gaming customers. We expect that its launch will provide a template for Fonix’s client-led expansion into new markets, with Fonix in advanced discussions to launch services with a key customer in an additional European market, and several of its other multinational clients looking to expand Fonix’s services overseas."

Here's a couple more extracts - from memory I don't think CAPD have announced anything with regards to Doropo? Being in West Africa they must be in prime position to obtain CEY's work there too.

Good to see the share price moving upwards today.....about time :o))

"In summary, I'm confident that we will extend the life of the mine and have positive news flow for you in the coming months. As I said, Sukari has been turned around, resources and reserves are increasing, and we're confident of delivering on our growth plan"********************What has emerged is the growth potential in our business outside of Sukari. Something I believe that has not been fully appreciated before. We now have a significant exploration license package in Egypt to complement our strategic first-mover advantage in the country. We can leverage off our infrastructure and our people to rapidly explore and bring to account this potential and this portfolio of licenses.

In Cote d'Ivoire, we can see our next operation at Doropo with a mine that can add an incremental 200,000 ounces per annum to our production profile. In ABC, we have a significant strike package along a promising belt that already bodes to 2 million ounce inventory with more targets being generated. And if we deliver into our goals, we will add up to 3 million ounces of our group reserves over the next two years. These are ambitious targets, but with the team in place we have managing the exciting portfolio backed by our financial robust position, we can deliver this on behalf of all our stakeholders."

Centamin had an Analyst Day yesterday - it's very encouraging for CAPD. Kaizenkid has posted the transcript elsewhere, and CAPD apparently got a specific mention. Here's an extract:

"The ore body at Sukari truly is world-class. And despite being having in production for over 10 years now, we still believe there's a lot more to come from it. We're busy exploring the broader Sukari concession with new targets emerging. And of course, we're excited about the potential of the newly granted exploration permits in Egypt. They cover in excess of 3,000 square kilometers of ready prospective geology. And we have a huge advantage, given our position as Egypt's only gold producer.

In West Africa, we're delivering the Doropo Project, and we believe it has the scale and quality to be Centamin's next mine. While the ABC project has the scale and potential to also support commercial discovery, I'm delighted today to announce that we've doubled the gold inventory at ABC to 2 million ounces, and we still believe there's more to come from this project. And we believe in the ability of the drill bit to create value. Discovering, defining and delivering ounces of gold is fundamental to what we do.

When we look at our commitment to exploration, we've got a significant budget committed this year and next. And the key here, however, is to ensure that this dollar allocation is used as efficiently as possible, delivering the best outcomes in the shortest time frame and as cost effectively as possible. This can be to the use of geological knowledge and experience to focus work streams to the results, and it can also be knowing when to stop spending money as a project doesn't have the potential we're looking for.

And what do you want out of this new approach? Over the next 2 years, we will deliver operational consistency, targeting a plus/minus 10% reconciliation between resource to the mill, demonstrating better planning, better execution and more confidence in the mine. At Sukari, we will deliver a minimum underground mine life of 10 years, and we will deliver resource and reserve growth in West Africa. We'll grow the resources of ABC and we'll deliver reserves at Doropo. And by delivering into these strategies, we're targeting to adding 3 million ounces to the reserves within the next 2 years. These are ambitious targets, but ones I believe we can deliver based on the portfolio we have, the team in place and our robust financial position."

https://www.marketscreener.com/quote/stock/SURFACE-TRANSFORMS-PLC-4003551/news/Surface-Transforms-Launches-new-Carbon-Ceramic-Brake-Disc-Kit-for-McLaren-765LT-Supercar-36502574/

"Surface Transforms : Launches new Carbon-Ceramic Brake Disc Kit for McLaren 765LT Supercar
09/23/2021 | 02:52pm BST
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September 23, 2021 Surface Transforms Launches new Carbon-Ceramic Brake Disc Kit for McLaren 765LT Supercar September 23, 2021/Michael Cunningham

Surface Transforms PLC, are a UK-based internationally recognised developer, manufacturer and supplier of carbon-ceramic materials. As the UK's only manufacturer of carbon-ceramic brakes for automotive use, they have announced the launch of a new carbon-ceramic brake disc kit for the McLaren 765LT supercar.

The McLaren 765 Long Tail (LT) is a high-performance machine built around the driver to deliver the ultimate driving experience, and the new Surface Transforms carbon-ceramic brake disc upgrade kit allows the enthusiast to take this awesome car to its limits with the ultimate track focused brake upgrade. The kit uses proprietary next-generation carbon-ceramic material - CCST - to create lightweight, high-performance brake discs that are far superior technology compared to OEM brake discs in terms of heat management and overall lifetime. The upgrade kit can be refurbished up to 3 times with an average expected lifespan of between 10-15,000 hard use track miles and has significant improvements in brake modulation and reduced brake pad wear due to approximately 200 degrees lower operating temperatures than standard OEM discs.

Also, when using Surface Transforms upgrade kits, the driver will experience outstanding performance even from cold and will benefit from improved handling and driveability, reduced noise, vibration and harshness and improved overall performance in both dry and wet conditions.

The upgrade kit is 100% UK manufactured using Surface Transforms unique 3D matrix carbon-ceramic weave technology which produces a lighter, stronger and more durable product. The reduced weight is extremely beneficial to performance as its fitted to a rotating, un-sprung area of the car. The upgrade kit is supplied as complete disc assemblies with all the parts required for easy fitment, which is backed by a dedicated UK technical sales team providing comprehensive aftersales care and support.

Craig Couzens, Business Development Manager at Surface Transforms said: "The brake discs fitted to today's high-performance supercars have to withstand track day induced heat levels but also be durable enough for long life road use - our new kit delivers both". He added: "for any supercar owner and enthusiast, the technology found in the Surface Transforms discs is impressive both on and off the track with a reduced through-life cost and outstanding performance which for all McLaren owners, will be highly attractive benefits."

etc"

The good news just keeps on coming....

- positive drill results from PDI overnight , and PDI's share price is up 10% today - PDI are CAPD's largest shareholding
- Firefinch's share price remains at around the new highs
- Marvel Gold's share price has risen around 20% in the last few days, following news of Tanzanian approval for the spin-off and IPO of its graphite project (more work here for CAPD?)
- great new article from Mining journal on the CAPD web site - here's a direct link:

Https://www.capdrill.com/news/capital-limited-has-never-had-it-so-good-mining-journal-article

The article strongly hints at more mining service contracts coming soon, as per "reliable sources"!

I also like the "structural push into battery metals", such as "rare earths, nickel, graphite, and copper" - this would be pretty substantial to make the suggested non-gold exposure 40% in just the next 18 months.

Danske are evidently pretty keen - they've bought just over another 2m shares in the last month, and now own over 6% with 6.03m shares:

Https://www.investegate.co.uk/sdi-group-plc--sdi-/rns/holding-s--in-company/202109231115047793M/

Finncap retain their 200p target price.

They say their forecast of 7.6p EPS for this year (with a 5.7p dividend) is "conservative", and they introduce 8.3p EPS forecast for next year (with a 6.3p dividend).

Their note is 31 pages long so very comprehensive!

Results are as flagged, so no surprises, and order books are up for the core business.

Cenkos this morning note that the cash-adjusted P/E is only 14.1p for this year, dropping to 9.9 for next year.

They conclude:

"Venture Life has announced its interim results for the six months to June 2021. As previously announced in the August trading statement, revenues were down YoY due to lower HSG sales and sales to the Chinese partner, though revenues are expected to grow subsequently, benefiting from the two recent acquisitions. H1/21 gross margin was impacted by a number of factors including supply chain costs and stockholding costs; however, the company expect margins to improve in H2/21E.

Despite the set-backs impacting H1/21A, with two acquisitions set to contribute in H2/21E and the financial capacity to make further acquisitions, we believe Venture Life is in a strong position to deliver future growth and we maintain our Buy recommendation."

Not a bad six months for a £5.6m m/cap company....H1 brings £929k EBITDA and £430k PAT.

Plus PEG have £2.7m net cash against that £5.6m m/cap.

Trading is broadly in line for the year, i.e just slightly below, and order boooks are down due to Eyetrain and the UK Government's train company reorganisation, but just look at that £1.7m cash generation in H1. And every division remained profitable, with QRO and RTS looking very good indeed.

There are also strong hints that more acquisitions are in the pipeline.

There are further hints that Eyetrain should recover relatively soon. With fundamentals like the above I'm happy to hold here.