12th Oct 2023. 8.55am
Regency View:
Update
Regency View:
Update
Alpha FMC shows resilience with 8% growth in first half 2023
Alpha Financial Markets Consulting (AFM) released a disappointing trading update in which it said the global consulting market faced increased competition and a longer sales cycle.
However, Alpha managed to display resilience by achieving approximately 8% growth in net fee income compared to the same period in the previous year. They also maintained consistent consultant day rates and monthly sales wins.
Their first-half adjusted earnings (EBITDA) margin, while lower than in previous years, was just over 17%. This drop was primarily due to reduced average utilisation, particularly during the quieter summer months. Nonetheless, utilisation is expected to improve in the second half of the year.
Alpha said it is making significant progress in North America, particularly in its alternative investments consulting business, Lionpoint, which is performing strongly. The company continues to exercise caution in its hiring approach to keep costs under control and maintain a strong net cash position.
Looking ahead, Alpha anticipates robust client demand in the second half of its financial year and expect to meet market expectations for full-year results.
Alpha plans to report its interim results for the first half of 2023 on 23rd November.
AFM Daily Candle Chart
Boohoo slashes profit forecasts amid consumer spending cutback
Boohoo (BOO) has significantly lowered its annual sales and profit forecasts due to reduced consumer spending.
The fast-fashion retailer anticipates a revenue decline of 12% to 17% for the 12 months ending in February, in contrast to its earlier projection of a maximum 5% drop made in May.
Boohoo also warned that weaker sales would impact profits for the current financial year. Adjusted earnings are expected to be between £58 million and £70 million, down from the previous range of £69 million to £78 million.
CEO, John Lyttle, stated that they have identified over £125 million in cost savings, supporting their investment program. The company’s capital expenditure for the year has been reduced to £75 million.
Boohoo’s shares dropped by 10% last week following the announcement, but prices have since stabilised and managed to claw back some of the losses.
In June, the company faced a shareholder rebellion over executive pay at its annual general meeting. And British retail group Frasers, controlled by Mike Ashley, increased its stake in Boohoo to 10% in September.
It’s a long road to recovery and Boohoo needs to stabilise its sales for substantial margin recovery in the coming years.
BOO Daily Candle Chart
CAML’s Q3 Operations Update: Safe, strong, and surpassing milestones
Central Asia Metals (CAML) released its Q3 2023 Operations Update on Tuesday, providing insights into the performance of its Kounrad copper recovery plant in Kazakhstan and the Sasa zinc-lead mine in North Macedonia.
The key highlights from the Q3 2023 operational summary include:
- Zero lost time injuries (LTIs) at both Kounrad and Sasa.
- Kounrad copper production of 3,661 tonnes.
- Sasa zinc in concentrate production of 5,127 tonnes.
- Sasa lead in concentrate production of 7,039 tonnes.
CAML’s outlook indicates that they are on track to achieve their 2023 full-year production targets, including 13,000 to 14,000 tonnes of copper, 19,000 to 21,000 tonnes of zinc in concentrate, and 27,000 to 29,000 tonnes of lead in concentrate.
In addition, CAML’s CEO, Nigel Robinson, expressed satisfaction with the solid Q3 2023 performance, emphasised safety with no LTIs, and celebrated reaching a significant milestone of generating over $1 billion in revenue from Kounrad over 11 years. The company is also focused on advancing investments at Sasa and completing the construction and commissioning of the Kounrad Solar Power Plant, expected to generate electricity before the end of 2023.
CAML Daily Candle Chart
CCT show plenty of character in challenging retail landscape
Character Group (CCT) released a resilient trading update last week in the face of challenging conditions in the retail sector.
The toy designer and distributor acknowledged that the retail sector experienced “persistently challenging” trading conditions during the twelve months leading up to August 31, particularly impacting their first-half performance. However, Character remained undeterred and bounced back strongly in the second half of the year.
This rebound exceeded market expectations, and Character now anticipates reporting full-year underlying profits in line with current market projections. The company attributes this turnaround to the strength of its product portfolio, reflecting its commitment to delivering innovative and appealing toys, games, and giftware to consumers.
Character also highlighted its strong financial position – maintaining a robust balance sheet and a net cash position.
In their official statement, Character stated, “The directors look forward to updating shareholders further on this and on the current year’s trading at the time of the release of the group’s 2023 audited results.”
CCT Daily Candle Chart
Ebiquity fall as large clients reduce budgets
Ebiquity’s (EBQ) share price dropped sharply last month despite reporting a strong numbers for the six months ending in June 2023.
The leader in media investment analysis saw revenue increase by £3.9 million (11%) in the first half and adjusted operating profit rising by £1.1 million (23%). Operating profit margin increased by 1.4 percentage points to 14.7%.
Ebiquity said operational momentum was driven by improved profitability in the UK and North America. The company is in the midst of a three-year transformation and integration program, with a focus on rationalising and automating products and processes.
Despite some large clients reducing budgets, Ebiquity expects to meet expectations for 2023. However, macro conditions are creating uncertainty for 2024. The company is strategically improving its offerings and operating model to capitalize on revenue growth and margin enhancement opportunities.
Nick Waters, CEO, noted that they have seen growth through cross-selling and up-selling solutions and are making progress in their transformation program. While some major clients are cutting budgets due to market conditions, Ebiquity remains well-positioned for further growth and margin enhancement.
EBQ Daily Candle Chart
Ixico expects FY earnings to meet expectations despite revenue shortfall
Ixico’s (IXI) half year trading update showed resilience despite a minor revenue setback…
The brain imaging company expects its revenue for the year to be around £6.5 million, down from £8.6 million in 2022, mainly due to delays in new client trial initiations.
However, the order book is set to grow to at least £14.5 million, and Ixico maintains a robust balance sheet with a minimum of £4 million in cash reserves. Their adjusted earnings is expected to improve compared to initial projections, moving from a £1.5 million profit in 2022 to a slight £1 million loss.
Despite a challenging environment in 2023, with fewer clinical trials starting, Ixico is optimistic about market growth returning in 2024, driven by advancements in neurological drug development, particularly in Alzheimer’s disease and gene therapies. The company plans to return to double-digit revenue growth by 2025.
While navigating these challenges, Ixico remains cost-conscious while investing in key areas like image analysis innovation and business development. CEO Giulio Cerroni remains confident in the company’s growth potential, particularly in the field of neuroimaging.
Audited results for the fiscal year will be released in December, providing a clearer picture of Ixico’s performance.
IXI Daily Candle Chart
Netcall see strong cloud momentum
Netcall (NET) published a strong set of final results, delivering double-digit organic revenue and profit growth. This success was fuelled by a strong demand for their cloud services as they transition to a predominantly cloud-based business.
The customer engagement software specialist said it continued to see a robust demand as customers increasingly prioritise automation and improvements to the customer experience. This focus, along with solid cross and up-sales, also led to an increased number of new customer wins.
As previously guided in the August trading update, Netcall’s total revenue for FY22 jumped 18% to £36 million. Cloud services revenue surged 55% to £16.6 million, and Netcall’s total annual contract value (ACV) increased 15% to £27.9 million.
Looking ahead, Netcall CEO, Henrik Bang said:
“Sales momentum has remained strong into the start of the new financial year and our significant order book alongside our increasing recurring revenues and strong pipeline of new business opportunities, gives the Board confidence in the Group’s continued success.”
NET Daily Candle Chart
Volex survives cyber attack with no material financial impact
Critical power company, Volex (VLX) found itself targeted by a recent cyber attack. Despite this, the company reassured stakeholders that the attack would not have a significant financial impact.
The cyber attack involved unauthorised access to specific IT systems and data at some of Volex’s international sites. When the company became aware of the incident, they immediately activated their established IT security protocols to halt the unauthorised access.
To deal with the situation, Volex also enlisted the help of specialised third-party consultants. These experts are tasked with investigating the nature and extent of the attack and implementing an incident response plan to mitigate any potential damage.
Fortunately, Volex managed to keep all of its sites operational, ensuring minimal disruption to their global production levels. Importantly, the company continued to maintain its trade relationships with both customers and suppliers.
For the time being, Volex does not expect a substantial financial impact resulting from the cyber attack.
VLX Daily Candle Chart
Disclaimer:
All content is provided for general information only and should not be construed as any form of advice or personal recommendation. The provision of this content is not regulated by the Financial Conduct Authority.