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Ebiquity (EBQ, 41.5p, £13.43m) Final results to April 2009 saw revenues rise by 7% to £18.4m (£17.22m) with underlying pre-tax profits of £2.1m (£1.48) and EPS of 5.28p (4.39p). Results were driven by the analytics division with international growth a key feature, primarily the USA where the group has taken market share. The group is benefitting from the tighter controls on advertising spend which leads to marketing departments spending on analysis to ensure the best return for every $ spent. Although the group does warn that some necessary spend will depress margins the group remains positive on the outlook. With no brokers forecasts available a modest increase in pre-tax to around £2.2 would give EPS of 5.5p – putting the group on a probably conservative 9.4 times. This leaves plenty of scope of upside in the rating (to 11x) with the potential for forecast upgrades as well, BUY towards the 49p price target.
Group NBT (NBT, 223p, £56.53m) The group has advised that results to June 2009 are likely to be slightly ahead of market forecasts with resilience in the domain name management and good performance fro the reseller business. Forecasts for 2009 are likely to drift up towards the £6.6m with 18.2p EPS and 2.99p DPS, putting the group on a soon to be historic rating of 12.3 times and a 1.3% yield. Next year forecasts are around £7.5m pre-tax profits with 20.7p EPS, putting the group on a 10.8x PER. Just sufficient upside on the rating justifies a BUY recommendation towards the 254p level.
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MAMA Group (MAMA, 4.75p, £38.37m) The group has announced another tranche of loan notes to 26% shareholder Pacific Capital. The group had already taken £1.5m in December 2008 and has drawn down an additional £1m to cover short term funding – with a total available of 10m to the group. However we are cautious that the loan may be demanded in full at any time and is scheduled for repayment by December 2009 or at anytime should there be a material disposal. Given the now increased dependence on the second half weighted results we move the share from a SPECULATIVE BUY to a HOLD.
Solar Integrated Technologies (SIT, 6.625p, £6.69m) has announced its proposed sale to US quoted ECD for 6.75p per share. This confirms our worst fears about the management of the company and justifies our 31/03/09 SELL recommendation at 16p.
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Zetar (ZTR, 167.5p, £22.16m) Final results to April 2009 saw revenues from continuing activities up 8.6% to £118.6m (£109.2m), underlying pre-tax profits of 6.1m (£8.7m) with EPS of 28p (46.2p), an impressive performance given the group lost Woolworths during the year as a major customer. . Debt rose slightly to £15.4m (£14.6m). Sales in the first 11 weeks of the current financial year are up 10% at £14.6m (£13.3m). The group is confident of the future, citing new product developments and the sale of baked snacks division, and forecasts of £6.5m pre-tax profits with 37p EPS puts the group on a prospective PER of 4.5 times. The low rating is justified by the high debt, but the group should generate healthy levels of positive cash-flow. BUY to the 6x PER which implies a target price of 223p.
Zenergy Power (ZEN, 127.75p, £66.74m) Has announced the successful testing of its Fault Current limiter (FCL) that utilises its superconducting wire technology. FCLs are used to protect grids and ensure a problem in one part of the electricity supply network does not lead to a system wide shut-down. The test opens the way for commercial sales of both its medium and high voltage FCLs. While this is clearly positive news the group is not forecast to make a profit in the foreseeable future so there is little reason to rush into this highly valued company. HOLD.
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Cohort (CHRT, 176p, £71.49m) Its MASS Consultants has won a contract as the Information and Communication Technologies partner for new and refurbished schools for North Lincolnshire Council, worth an estimated £13m over 7 years. The group has partnered with May Gurney Integrated Services and NPS Property Consultants to address the new build and refurbishment of schools for that council. Still a HOLD.
IdaTech (IDA, 91.5p, £47.04m) Has secured an additional order for 30 fuel-cells from b+w Electronic Systems, its German OEM partner, for delivery in 2009 and early 2010. A key use of the fuel-cells are as back-up power systems for telecommunications. With Investec bank confirming earlier this year its intention to fund the business we maintain our SPECULATIVE BUY recommendation.
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Geong (GNG, 42p, £13.25m) The provider of enterprise content management (ECM) systems has signed a 1 year contract extension with a leading international telecom provider. In the last 3 months to the end of June the contract generated revenues of $1.9m. The contracts typically are with Chinese companies extending its operations overseas, so they are typically billed in Dollars. We maintain our BUY recommendation, last iterated at 35.5p on 23/06/09, with a price target of 52p.
Ultrasis (ULT, 0.83p, £12.49m) Has announced a contract renewal with the East Midlands Strategic Health Authority to October 2010, worth £0.3m, for its depression treatment programme called Beating the Blues. With the group trading on an estimated 15x PER for the current year, assuming no taxes due to established losses and based on the underlying interim profitability of £0.4m, the group is well up with events, HOLD.
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Brammer (BRAM, 123.5p, £65.63m) Trading update for the first 6 months to June 2009 has reflected the poor economic conditions with sales down 10.5%, though on a constant currency basis the sales on a like-for-like basis (sales per working day) were down 17.8%. Cost cutting has taken £12m out of the sales, admin and distribution costs for the current year, with the cash cost less than one year’s savings. Inventory reductions have helped net debt fall by £15m to £69m. The group believes trading has reached stable levels in March and April. Forecasts around £15m with 19.5p EPS puts the group on a prospective PER to December 2009 of 6.3 times, appropriate given the high debt levels. HOLD.
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