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Scisys (SSY, 44.5p, £12.67m) Has been awarded the contract from the RNLI for the electronic architecture on its new class of lifeboats. Initial value is estimated to be £1m. We maintain our BUY recommendation with a price target of 50p.
ILX Group (ILX, 29p, £5.62m) The computer based training company has announced new contracts worth a total of £0.5m, with £0.25m training the graduate intake of a major European bank which will bill in August and September, £0.1m training analysts at a global investment bank and has been selected as the trainer of choice of 2 of the UK’s private equity programmes. It is also training recruits in New York – underlining its overseas presence. Forecasts for March 2010 are for £1.13m pre-tax profits with 4.08p EPS and 1.5p DPS, putting the group on a 7.1x prospective PER and 5.1% yield. A prospective PER of 8x would give a target price around 33p and a 4.5% yield, BUY.
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Highams Systems (HSS, 1.375p, £0.95m) Final results from the business, technology and professional service provider to the insurance and financial service sectors saw revenues fall to £10.53m (£13.61m) and a pre-tax loss of £0.37m (loss £0.85m), which is an improved position from the implied run rate of the interim loss of £0.26m. The cost cutting measures have now led to Q1 of the new financial year showing a modest EBITDA profit. Clearly the management have done a good job and the news that they have achieved a turnaround bodes well, a slightly risky SPECULATIVE BUY – as it is trading on a very low EV/Sales.
Tangent Communications (TNG, 4.75p, £8.08m) AGM trading statemEnt has confirmed trading for the first 4 months is ahead of expectations. The group has stated it intends to expand in its chosen sectors of the market by utilising its net cash which now stands above £2m. We repeat our BUY recommendation of 02/06/09 when the price was 4.375p with a price target of 8p.
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Intandem Films (IFM, 0.875p, £0.73m) Has warned that it has so far achieved funding for only 1 of its films and that it is in talks regarding the funding of its immediate needs. We last commented on 27/03/09 at the current price when we warned investors to await Intandem’s own films – but with the danger of an emergency cash raise and the associated dilution SELL.
Dillistone (DSG, 135p, £7.64m) Has signed 2 contracts for its FILEFINDER 9 - with GSI Executive Search for the implementation on-going support in offices in Singapore, Malaysia, Hong Kong, Thailand & China and with Tribal Group Executive Search & Selection. We remain cautious that the group has warned on H1 trading yet cost cutting should help the group achieve the market expectations of £1.06m pre-tax profits and 13.2p EPS – putting the group on 10x prospective PER. Moved from a sell to a HOLD.
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Neovia Financial (NEO, 51p, £61.16m) Has entered the international money transfer market that takes advantage of its existing developments to date, indeed the original NETeller card was taken advantage by UK citizens who would add funds to the NETeller wallet and give the ATM card to their builders in Spain. With the market forecast to be some $300bn this year (Source: World Bank) we believe this is a major boost to the Neovia outlook. We last commented on 20/07/09 at 51.75p and we reiterate the BUY recommendation with a 62p price target.
Tyratech (TYR, 40p, £8.67m) Has announced a distribution deal with Natural Forces for its insecticide and pesticide products where it will co-brand products for the US mushroom production and processing.
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Protonex (PTX, 32.5p, £10.29m) Has partnered with Ultracell Corporation, a producer of portable fuel cell products, for the development, marketing, demonstration, commercialisation, and sale of advanced fuel cell power solutions and fuels for the US Army. The group will combine the cells from UltraCell with the Protonex Power Manager and the water/methanol fuel systems. We remain impressed by the developments and maintain our SPECULATIVE BUY recommendation.
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