Member Info for rivaldo

WH Ireland conclude this morning that they see 100p as fair value here for the moment, having left their forecasts unchanged for the moment:

"WHI view:

This morning’s update from Touchstar illustrates a positive period for the business and with c.70% of sales having previously been deemed as essential, it is encouraging to note that an improvement in those sectors impacted by COVID-19 is beginning to be seen, alongside the overall increase in the order book and growth in recurring revenue.

As such, an FY 2021E EV/EBITDA multiple of 5.6x falling to just 3.6x is undemanding in our view. We see fair value for the shares at 100p, which would equate to a current year EV/EBITDA multiple of c.8x."

A reminder of the strong H1 trading update, before the results due in the next few days:

"REACT has continued to make strong progress in the period, achieving c.19% organic growth in revenue to approximately £2.5m (six months ended 31 March 2020: £2.1m) and c.43% organic growth in gross profit to approximately £1.0m (six months ended 31 March 2020: £0.7m). All numbers quoted in this announcement are unaudited.

Growth was the result of strong underlying performance in the core business alongside some demand for COVID-19 decontaminations. Healthcare, rail and facilities management sectors performed well, augmented by incremental business in other areas such as education and residential care homes.

REACT carried out a large proportion of high-margin work in the period helping to drive the gross profit margin to c.40%, approximately 700-basis points higher than the same period last year (six months ended 31 March 2020: 33.2%).

The Board expects EBITDA (before exceptional items relating to the acquisition of Fidelis and some restructuring) to be in excess of £350k, materially higher than the same period last year (six months ended 31 March 2020: £85k).

These numbers do not include any contribution from the recent acquisition of Fidelis Contract Services Limited ("Fidelis"), details of which were announced on 29 March 2021.

The Group's financial position is robust and underlying cash generation remained strong during the period. Net cash at 31 March 2021 was £771k (31 March 2020: £306k). This figure is after payment of the initial consideration for the Fidelis acquisition (£1.5m in cash) and a proportion of the associated transaction costs, the remainder of which (approximately £170k including VAT) is payable in the second half of the Company's financial year."

For the record, there's an InvestorMeet presentation post-prelims on 23rd July at 4.00:

Https://uk.advfn.com/stock-market/london/sdi-SDI/share-news/SDI-Group-PLC-Investor-Presentation/85422598

The AGM is soon, on 28th June, and for the record shareholders can register for a video conference call via Microsoft Teams post-AGM and submit questions:

Https://uk.advfn.com/stock-market/london/volvere-VLE/share-news/Volvere-PLC-Changes-to-2021-AGM-Arrangements/85422588

Excellent news - trading has exceeded expectations this year, and the order book is growing nicely again.

Plus recurring revenues are rising - and of course we know TST have a very healthy £1.8m cash pile too:

"Trading Update

The encouraging trends observed across our business have continued and Touchstar's performance this year to date has exceeded our expectation. This has been achieved by favourable revenue development, an increase in margins and continued tight management of expenses.

The order book is building back, it has increased by over 50% since the year end and currently stands at over GBP750,000. Reassuringly it is beginning to include orders from sectors most impact by the pandemic.

A key focus for management is upon achieving an increasing percentage of sales from long term recurring revenue contracts. In the year to date these revenues are up 12% compared to the equivalent period last year.

We expect a strong first half performance to, at a minimum, underpin the full year results. We will more formally update expectations for both 2021 and future years when we release the Group's interim results which we expect to be announced by the middle of September."

Brian Rudd, one of CAPD's founders, is placing 3m shares via a bookbuild. He has over 35 years of experience per his bio, so I'm guessing he's nearly 60 or so, and he had almost 15m shares to start with so this is only a fifth of his holding.

I'm assuming there's institutional demand out there to enable such top-slicing, so this is a good time to put through such a deal - hopefully the price will reflect the demand. Good luck to him.

RNWH have been tipped as a Buy in today's Tempus column in the Times.....

Even better considering the current investment zeitgeist, the column overall has an ESG theme and focuses on companies which have the LSE's Green Economy Mark. Currently this has only been granted to around 100 companies.....

Https://www.thetimes.co.uk/article/green-economy-has-blue-chips-too-lnh8r0ddl

"Renew Holdings

Another Green Economy Mark company is the Aim-listed Renew Holdings, which carries out maintenance of the rail network, roads, telecom towers, plumbing and pipework. Its customers include Network Rail and the Highways Agency. News of the government spending £640 billion on infrastructure over the next five years is very good news for Renew.

Renew has been savvy about buying companies that will benefit from that spending boost at decent multiples. One such purchase was its £5 million deal to buy Rail Electrification Limited, which provides services and machinery to install overhead lines to electrify the rail network. Network Rail has said it plans to spend up to £1.8 billion a year on electrification to cut carbon dioxide emissions. This deal adds to the services Renew can offer its rail customers and should help it win more contracts.

Elsewhere, it’s likely to see growth from servicing 5G infrastructure, increased spending on water, and nuclear decommissioning work.

Renew has the benefit of the long contracts offered by public sector organisations but does not carry the same risk as larger competitors such as Kier or Costain. Its contracts are much smaller and prices are generally not fixed so the risk of mispricing a contract is much lower.

It ploughed on through the pandemic as its work is considered to be of critical importance. Tom Fraine at Shore Capital says its ability to control costs and resilience has been better than most industrial companies. The shares are changing hands for 659p, about 14 times forecast for earnings this year, and look cheap considering the trends that will underpin demand.

Advice Buy
Why Revenues underpinned by regulatory spending
Impact Helping to cut carbon from rail travel"

From the FT - a "mini supercycle" is predicted for agricultural prices for the next few years, in particular soyabeans, which presumably bodes very well for CPO prices too:

Https://www.ft.com/content/b9551dfb-cabb-40aa-bd02-5b1fff3afb64

"Top agricultural traders predict a ‘mini supercycle’
Markets for corn, soyabeans and wheat expected to remain strong over next few years

Agricultural commodities are at the start of a “mini-supercycle” with prices expected to be boosted for several years by demand from China and for biofuels, according to some of the world’s top traders.

Executives from Cargill, Cofco, Viterra and Scoular said this week that the markets for corn, soyabeans and wheat will remain strong over the next two to four years...

....“We’re certainly seeing a mini supercycle,” said David Mattiske, chief executive of Viterra, majority owned by Glencore, told the FT Commodities Global Summit. “We’re in a demand driven environment with the themes of growing population, growing wealth, people consuming more. And added into that we’ve got increased demand for plant based fuel.”

Sustained higher prices will be a boon for farmers who have felt the financial strain of several years of stagnant crop prices...

.....According to Alex Sanfeliu, head of Cargill’s world trading unit, the two big harvests a year for corn and soyabeans — one in the US and the other in Brazil — means supercycles in grains and oilseeds tended to be shorter than other crops, but he predicted a bull market for the next two to four years. “The characteristics of the super cycle are there,” he said......

....Meanwhile, biofuel demand, which was driving up soyabean and soya oil prices, is “unprecedented”, according to Paul Maas, chief executive of US agricultural trader Scoular. As governments push for a reduction in fossil fuel usage, many are increasing the amount of biofuels blended into petrol. “The increased demand is real and we’re on the front end of seeing how that all plays out,” said Maas.

Despite the enthusiasm, Gary McGuigan, head of global trade at Archer Daniels Midland, added a note of caution. “We’ve seen quite a correction in prices over the past weeks or so,” he said, adding that while the demand dynamics were “definitely changing” it was too early to call a mini supercycle.

One of the big uncertainties was China. “Out of all big demand driven areas in the world, China is the most opaque and the most hard to predict,” he said."

and buying coming in at almost the full 690p offer price.

Edging up to new highs, albeit extremely slowly! Good to see buyers paying the full 84p offer price.

Two new non-execs appointed to the Board - good to see representatives of two long-term investors (including Kestrel) holding over 37% between them being supportive and likely to continue CNIC's growth strategy which has worked extremely well:

Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Board-Appointments/85391889

Loads of AT (institutional) trades going through now and ever since around lunchtime. Whatever's happening, it's healthy and the share price is going up :o))

Online the maximum amount of shares I can currently buy is just 100 shares :o))

Supply must be short.....I note the buy just now of over 14,000 shares at 71.9p - well above the published 70p offer price.

A 1.3m trade at 63p just reported - I wonder if this represents the clearing of an overhang that's been holding the price back.

SUR have just won a place as one of 30 contractors on a £95m framework from Central & Cecil Housing Trust:

Https://bidstats.uk/tenders/2021/W24/752943150

Part two - note the 100p target price giving over 40% upside:

"The group’s antenna business only made a small operating profit last year, but it’s starting to pick up larger contracts for 5G backhaul antennas as mobile network operators roll-out higher bandwith 5G services. The business is likely to gather momentum, too. Chief executive Moni Borovitz notes that “the Covid-19 pandemic has emphasised to the world the importance of mobile connectivity and this has accelerated the global roll-out of 5G services. Take-up of our 5G backhaul solution is moving ahead positively.”

Another key take for me is the group’s bumper cash performance. Even though MTI paid out a US$2.2m dividend in March, net cash increased by 10 per cent to US$9.5m year on year, a sum worth 7.5p a share. This adds weight to analyst expectations of a further double-digit increase in the dividend to 2.8¢ (2p) in 2021, implying the shares offer an attractive prospective dividend yield of 3 per cent and one that is also well underpinned by excellent prospects of strong earnings growth in the coming years.

Analyst David Johnson at house broker Allenby Capital is maintaining his full-year pre-tax profit and EPS estimates of US$4.9m and 3.14p, up from US$4.05m and 2.7p in 2020, implying MTI’s shares are rated on a cash-adjusted price/earnings (PE) ratio of 18 after factoring in forecast year-end closing net cash of US$10.2m (8.3p a share).

Based on annual revenue increasing by 6 per cent in both 2021 and 2022 to US$43.4m and US$46m, respectively, Allenby expects MTI to increase pre-tax profit and EPS to US$5.45m and 3.5p in 2022, implying the shares are priced on a cash-adjusted forward PE ratio of 15.7 for the 2022 financial year after accounting for a year-end projected cash pile of US$12.1m (9.7p a share). That’s not a punchy rating for a company forecast to increase EPS by 30 per cent over the 2021 and 2022 financial years, and one that also offers a progressive dividend policy.

It’s my view that the profit taking since my last article represents a repeat buying opportunity and I maintain my 100p upgraded target price. BUY."

The tip is subscriber-only, so here it is FYI - part one:

"Tap into a cash generative technology growth stock.

A little known cash-rich technology group has just reported 25 per cent organic profit growth driven by strong ongoing structural growth in its three main end markets.

June 15, 2021.
By Simon Thompson.

• First-quarter pre-tax profits increase 25 per cent.
• Net cash up 10 per cent year on year underpins forecasts of double-digit dividend hike.
• All three divisions performing well.

Shares in Israeli-based technology group MTI Wireless Edge (MWE:65p) have succumbed to profit taking since I covered the annual results (‘Small-caps with upgrade potential’, 1 March 2021), having doubled in value in the previous six months after I initiated coverage, at 40p (Alpha Report: ‘Tapping into 5G and climate change technologies’, 4 Sep 2020).

First-quarter results and news of further contract wins indicate that the share price reversal is seriously overdone. Indeed, MTI increased pre-tax profit by 25 per cent to US$0.9m on 4 per cent higher revenue of US$10m in the three months to 31 March 2021. The growth was organic as one would expect given that all three of MTI’s divisions have robust trading prospects driven by ongoing structural growth in their respective end markets: global warming and climate change; increased defence budget spending; and demand for next generation 5G networks.

MTI’s wireless water control and management systems division addresses water scarcity by using Motorola's IRRInet state-of-the-art communication technologies. The business continues to win new contracts, the latest being a Can$300,000 award from a major Canadian City. That contract endorses MTI’s decision to open a new office in Alberta, with a view to increasing recurring revenue from service and maintenance contracts and to be closer to end customers. MTI also extended a contract worth US$2.5m with a leading Israeli municipality for another two to four years. Global warming is accentuating the need to source more efficient irrigation systems that reduce water and power usage, a factor that is underpinning the strong demand for MTI’s technology.

MTI’s Summit electronics division, which represents 40 international suppliers of radio frequency/microwave components and sells these products to customers in Israel and Russia (fifth of divisional revenue), has reported another strong quarter, buoyed by ongoing demand from its core customer base in the defence and technology sector in Israel and Russia. Importantly, demand for future design solutions remains high, a leading indicator of future trading prospects."

Excellent news, cheers Surprised. ##

Onwards and upwards to Simon's 100p target....

Great close last night at more new highs.

And more excellent news, this time from Seymour Civil:

Https://twitter.com/SeymourCEC/status/1398278736961753094

"Seymour CEC
@SeymourCEC

We are absolutely delighted to have been awarded a place on @nwater_care
NWG’s Lot 1 Water and Waste Water Network select list which will support Northumbrian Water Group’s capital programme for infrastructure projects until 2025."

I really like the sound of this joint campaign launch from RNWH's subsidiaries "to meet the ambitious electrification and decarbonisation targets set by government and Network Rail". Catchy name too :o))

Https://www.amcogiffen.co.uk/news/arq-an-electrifying-new-partnership

"15/06/2021

ARQ, which includes Amco-Giffen, REL (Rail Electrification Limited – the latest addition to Renew Holdings Plc) and QTS, will provide a truly integrated self-delivery model for the UK rail network. It will help to meet the ambitious electrification and decarbonisation targets set by government and Network Rail.

Decarbonisation is a huge challenge for us all over the next 30 years, as we seek to reduce carbon emissions and fossil fuel consumption. The UK government aims to remove all diesel-only trains by 2041, with a legally binding commitment to net zero by 2050. It has been recognised by the industry that, together, we must do more to be part of the solution to climate change.

In fact, to decarbonise the UK rail network completely, 13,000 single track kilometres (approximately 450km per year) will need to be electrified by 2050 to achieve net zero. However, it has been identified that from 2019-2020 only 251km was electrified.

ARQ therefore aims to play a key role in accelerating this change, leading the way in helping Network Rail to respond to the UK decarbonisation agenda within our country’s rail infrastructure.

Individually, each of the three businesses coming together to create ARQ have been enabling electrification programmes across the UK for several years. Now, combining their respective strengths within our unique family of multi-disciplinary engineering businesses will help us to collectively support essential UK infrastructure while gaining a key competitive edge.

The new partnership is led by Vinny O’Holloran, who says: “We understand that electrification is a significant contributor towards meeting Network Rail’s decarbonisation commitments, and that things have to change to drive efficiency. We want to be part of this change; to help drive it forward.”

etc"