10th Dec 2020. 9.06am
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Update
Regency View:
Update
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SDI’s pretax profit jumps 56%
SDI Group (SDI) released an impressive set of interim results this week…
The diversified tech firm saw revenue jump by 23% to £14.1m in the six months to October 31 and profit before tax surged 56% to £2.5m.
The interims also showed a strong contribution from products designed into equipment used in testing for and treating COVID-19 and cash generated from operations increased 130% to £4.7m.
Chairman Ken Ford said:
“We are pleased to report another strong set of financial results. Our business model has shown resilience in the period and despite the ongoing uncertainties the board remains confident that SDI will deliver a full year financial performance in line with market expectations.”
The shares have been forming a series of steepening trendlines – indicating that momentum is accelerating. Having broken decisively above their January highs, we would like to see this breakout hold firm.
SDI Daily Candle Chart
Keystone Law forecasts annual profit ahead of expectations
Legal firm Keystone Law (KEYS) released an upbeat trading update last week – indicating that profit for its financial year ending January 31 will be “comfortably ahead of current market expectations”.
Adjusted pretax profit is set to come in at £4.6m versus £5.8m the year prior.
CEO James Knight said:
“We are delighted with the second half performance to date. Whilst the much feared second wave of Covid-19 has arisen, unlike the first wave in the spring, it has had a limited impact on the performance of the group”.
Whilst Keystone gapped higher on the trading update, the shares have started to tread water underneath resistance. We’ll be watching closely to see if the bullish gap holds over the coming weeks.
KEYS Daily Candle Chart
‘Macro growth drivers accelerating’ for OMG
Oxford Metrics (OMG) punched in a solid set of prelims last week which showed strong cash generation despite significant production and distribution delays caused by the pandemic.
Headline revenue fell 14.3% to £30.3m (FY19: £35.3m), but the quality of revenue increased with annual recurring revenues of £6.8m versus £6.2m the year prior.
The statement said that despite short-term sales delay, macro growth drivers are accelerating…
Infrastructure software subsidiary Yotta is benefiting from acceleration of Digital Transformation in public asset management and motion capture arm Vicon is seeing a broader range of applications for their technology.
Having snapped up OMG on long-term support, we’re very happy to see the shares break above resistance and confirm the change in trend.
OMG Daily Candle Chart
GB Group resume dividend as interim profit grows
GB Group (GBG) has been a star player in our portfolio for some time and this week’s interim numbers only serve to reinforce this.
In the six months to September 30, the identity management, location intelligence and fraud prevention company’s pretax profit jumped to £14.9m from £8.5m the year before.
Revenue improved 9.8% year on year to £103.5m from £94.3m.
CEO Chris Clark commented:
“We have delivered good results driven by accelerated growth from some of our existing customers as they extend their use of digital services and encouragingly, customer contract renewal rates continue to be in line with prior years. Although we saw the rate of new contracts slowdown in some geographies and sectors, we successfully won new business against our competitors throughout the first half.”
He continued: “Clearly the broader implications of Covid-19 mean that uncertainty continues to be a dominant trend for all businesses around the world. However, GB is well positioned as digital acceleration is now even more a necessity for all companies. For the consumer facing businesses we serve, key to their success will be making sure they know who and where their customers are. We will continue to invest organically and through acquisition for additional capabilities to meet these needs and drive long-term growth for GBG.”
The shares have used the broken resistance level at 805p as support and this is a very bullish sign – we’re happy to hold.
GBG Daily Candle Chart
Boohoo hires Leveson to monitor its supply chain
Boohoo (BOO) are going above and beyond to send a message that they are taking the labour issues in their supply chain seriously.
Earlier this month, Boohoo announced that they have hired Brian Leveson, the judge who oversaw the inquiry into Britain’s phone hacking scandal, to monitor its efforts to improve work conditions in its UK supply chain.
After gapping lower again in October, the shares have started to carve out a small but steady series of higher swing lows. This has been matched with a stream of institutional buying so we remain confident that Boohoo will bounce back.
BOO Daily Candle Chart
Learning Tech snap up eThink Education
Learning Technologies Group (LTG) announced the acquisition of eThink Education for an initial cash consideration of US$20mln.
eThink is a North American company operating in the high-growth open-source learning management systems market.
Talking on an interview with journalist’s CEO Jonathan Satchell said “we now have a $30mln plus revenue business in this $200mln market” which is growing fast and predicts they will continue to grow into the ‘mid teens’ organically.
The market has given the acquisition its seal of approval as the shares have surged higher since the start of the month. A re-test of the key February spike highs looks to be on the cards and we’ll be looking for buyers to push the shares through this resistance level.
LTG Daily Candle Chart
Renew post record full year results
Renew Holdings (RNWH) posted their Final Results this week with no surprises from their September trading update.
Full Year operating profit jumped by 19.3% to 32.9m and pretax profit increased 18.9% £32.1m.
The group’s order book strengthened by 20% to £692m versus £581m the year prior and their balance sheet swung from net debt of £10.2m to net cash of £0.3m.
CEO Paul Scott commented:
“Thanks to our differentiated and cash generative earnings model, we delivered a record trading performance, with a solid margin, strong cash flow and continued EPS growth. We continue to focus on bolstering our performance with highly selective, value enhancing acquisitions to strengthen our presence in key markets. Following the acquisition of Carnell earlier in the year, which facilitated our entry into the strategic highways network, I am very pleased with its positive contribution to the Group’s results.”
Our decision to snap up a second tranche in September is working well and the shares have started to trend higher within a neat ascending channel.
RNWH Daily Candle Chart
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