22nd Apr 2021. 8.57am

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Tracsis start to motor as UK lockdown eases

Tracsis (TRCS) share price has well and truly kicked into gear during the last fortnight following an in-line trading update and the UK moving out of lockdown.

The traffic and travel data analytics group reported a fall in First-Half revenue to £22.2m (H1 2020: £26.4m), with growth in the Rail Technology & Services Division offset by lower sales in our Events and Traffic Data businesses as expected due to ongoing Covid-19 restrictions on their end markets.

Tracsis balance sheet remains robust with a with cash balances of £20.8m and no Covid deferrals due to be paid.

CEO Chris Barnes commented:

“I am pleased with the first half performance which was in line with our expectations and I’m encouraged by the trading momentum in the business as we move through the third quarter”…

“We have a significant pipeline of large multi-year opportunities across our Rail Technology and Services Division in both UK and international markets, and in our Data Analytics/GIS business unit. In addition, we are now starting to see an increase in new business enquiries across those businesses that have been hardest hit by the Covid pandemic and this is driving increased confidence around future growth prospects.”

Needless to say, with the shares up more than 20% this month, we’re very happy with Tracsis performance!

TRCS Daily Candle Chart

TRCS Daily Candle Chart

NFC reinstates dividend as trading tops expectations

Another of our AIM Investor portfolio’s star performers, Next Fifteen Communications (NFC) released a strong set of final results last week.

The online marketing group said it is currently trading ahead of management expectations after a strong start to the new financial year and reinstated its dividend, proposing a final distribution of 7p per share for the year ended 31 January 2021.

Net revenue jumped 7% to £266.9m, with adjusted profit before tax up 22% to £49.1mln. Net cash was £14m compared to net debt of £9.3m in January 2019.

Commenting on the results, Chairman of Next 15, Penny Ladkin-Brand said:

“In a year like no other, these are excellent results”…

Looking to the year ahead, the Board is optimistic about the prospects for the Group, despite the continued impact of Covid-19 on the economy. Covid-19 tested our business model but it also tested the character of the team that leads Next 15 and the people that work for the Group across the world. The Board remains confident of the Group’s underlying prospects. We believe we have the quality of people, the strategy and the financial strength to continue to outperform our marketplace.

The shares have carved out a powerful uptrend since the turn of the year, and whilst a pullback is inevitable, we’re very happy to hold NFC.

NFC Daily Candle Chart

NFC Daily Candle Chart

Revenues recover at IG Design

IG Design (IGR) posted an positive trading update this week which saw strength in the final quarter delivers full year performance in line with expectations.

The giftware group reported revenues up 40% year on year at over $870m (FY20: $624m), driven by a full year of trading from CSS Industries which they acquired in March 2020. However, remove the impact of the acquisition and revenues were down 5% due to the impact of the pandemic.

“Overall, our customers continue to trade well and the high sell-through rates seen over the 2020 festive period provide a good basis to build a stronger orderbook for the new financial year” read IG Design’s trading update…

“Looking ahead, whilst the Group remains cautious about the ongoing impact of Covid-19 and its associated impact on raw material and freight pricing, we are extremely encouraged by the resilience of our diverse customer base and our broad product portfolio. Assuming the current progress in opening up the regional economies in which our businesses operate continues, the Board expects significant year on year growth in both revenues and earnings in FY2022, in line with current market expectations.”

The market has responded relatively well to the update and the shares are now within touching distance of their New Year highs.

IGR Weekly Candle Chart

IGR Weekly Candle Chart

AAZ confirm 5-year extension to Gedabek contract area

Azerbaijan gold miner, Anglo Asian Mining (AAZ) announced this week that it had obtained ratification for the first of the two permitted five-year extensions of the Production Sharing Agreement for its Gedabek Contract Area.

Anglo Asian CEO, Reza Vaziri hinted that he expects further good news for shareholders in the coming months:

“This extension has been ratified by the Government of Azerbaijan during on-going negotiations for the Company to increase its land under concession in Azerbaijan both through enlargement of its existing contract areas and the licencing of new areas. This will enable the Company to expand its operations in the country. It is expected these negotiations will be concluded shortly and I look forward to updating shareholders.”

Prior to this news AAZ had released a Q1 production update which came in broadly in line with expectations with forecast gold production for FY 2021 of 48,000 to 54,000 ounces. Forecast copper production for FY 2021 of 2,500 to 2,800 tonnes of copper.

AAZ Daily Candle Chart

AAZ Daily Candle Chart

Bad news is baked in for Quixant

It’s been a brutally tough year for casino tech firm Quixant (QXT), but investors are starting to see light on the horizon…

When we recommended Quixant back in February, we stressed that this was a turnaround play, but we took a calculated gamble that conditions should improve for the casino industry as the global vaccine rollout progresses.

Quixant reported a 31% drop in Full-Year to $63.8m and adjusted pre-tax profits of $1.3m versus $10.7 the year prior.

Net cash actually increased during the period to $17.4m (FY 2019: $16.1m), which CEO Jon Jayal highlighted as a remarkable achievement given the headwinds they’ve faced…

“Considering that our key global gaming market was so materially impacted in 2020 due to the pandemic, I believe that to report an adjusted profit before tax and an improvement in our net cash position from FY 2019 is a remarkable achievement. It reflects the resilience in our Densitron business, the strength of the relationship we have with our customers and a robust balance sheet entering the year.”

He went on to give the following upbeat outlook:

“2021 has started strongly with healthy order intake such that we now have 106% coverage of internal budget for the first half of the year. As the gaming industry evolves out the crisis, we are bringing pioneering new offerings to market which we believe will support customers in their recovery.  It is also pleasing to see double digit growth in our Densitron broadcast business despite the headwinds caused by the pandemic.  The electronic component shortages present us with short-term supply chain risks, but we continue to utilise our strong cash position to mitigate the impact of these on 2021 trading.”

QXT Daily Candle Chart

QXT Daily Candle Chart

Serica ups dividend despite ‘severe industry downturn’

Serica Energy (SQZ) released a sobering set of Full-Year results, which had been indicated from previous trading updates…

The North Sea oil & gas company saw pre-tax profits plunge to £12.5 million versus £108.8m the year prior – impacted by low commodity prices and Bruce caisson shut-in.

Commenting on the results, Mitch Flegg, Serica’s CEO stated:

“We are reporting solid results after a challenging year and a severe industry downturn. Despite the many obstacles 2020 presented, Serica has continued to strengthen its financial and operational foundations and also to deliver returns to its shareholders”…

“The impact of a substantial fall in commodity prices during the year plus a 45-day shut-in of BKR production in 1H to repair a damaged caisson on the Bruce platform was mitigated by the flexible structure of the BKR net cash flow sharing arrangements and the Group’s gas price hedging programme. This financial and operational resilience enables the recommendation of an increased dividend of 3.5 pence per share.”

The shares have continued to track sideways since our entry, and our bullish view on Serica’s strong financials remains unchanged.

SQZ Daily Candle Chart

SQZ Daily Candle Chart


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