29th Jul 2021. 9.10am

Regency View:


Regency View:


Midwich H1 ‘comfortably ahead’ of market expectations

Midwich’s (MIDW) recovery is gaining momentum with First-Half numbers ‘comfortably ahead’ of market expectations…

The audio-visual (AV) firm said revenue for the six months to end-June was expected to be around £390m, an increase of 29% on H1 2020 which was heavily impacted by the pandemic.

Organic growth was approximately 25% and adjusted profit before tax is expected to be around £13m, compared with £3.2m in the first half of 2020.

“The Board expects the momentum seen in H1 2021 to continue throughout the remainder of the year.  As a result, the Board now expects that revenue and profit for the full year will be comfortably ahead of the top end of analyst expectations” – read the upbeat statement.

On the price chart, Midwich’s performance has improved considerably this year and recently we’ve seen prices consolidate nicely above the broken January highs.

MIDW Daily Candle Chart

MIDW Daily Candle Chart

Progress in power delivers 90% revenue growth

Ceres Power (CWR) said revenue and other operating income for the six months to 30 June 2021 will be around £17m – almost double the £8.9m in the prior period, with ‘consistently high’ gross margin.

The fuel cell manufacturer is on track to be ‘in line’ with revenue consensus estimates of £31.5m for the 12 months ending 30 December 2021, but its order book decreased from £54m to £44, as contracts have been recognised as revenue.

Ceres CEO, Phil Caldwell commented:

“It has been another period of significant growth for Ceres with strong and meaningful strides from our partners.  In addition, we successfully raised £181m to pursue a broader strategy in electrolysis for green hydrogen and to double the addressable market for our solid oxide technology.”

The performance of Ceres share price has been disappointing in recent months, but prices look to have formed a new swing low and we remain confident that the shares long-term uptrend will resume later this year.

CWR Daily Candle Chart

CWR Daily Candle Chart

Begbies delivers strong performance

Business recovery group, Begbies Traynor (BEG) released a solid set of Final Results last week with results ‘ahead of original expectations’ due to acquisitions and improved trading.

All areas of the group performed well with Business Recovery & Financial Advisory ‘well-placed’ to continue its recent track record of growth.

Ric Traynor, Executive Chairman of Begbies Traynor said:

“Overall, the group is in a very strong position as we start our new financial year”…

The four acquisitions we have completed since the beginning of 2021 have significantly increased the scale of the group and its capabilities, enhancing the support and advice we provide to UK businesses. With the benefit of our recent acquisitions, our organic growth and future acquisition opportunities, we are well positioned to deliver the anticipated material growth in earnings in the new financial year.”

Yesterday, Begbies released its Red Flag report for Q2 2021…

The report showed that 650,000 UK Businesses are facing ‘significant financial distress’, but this number was down 10% on Q1 as the economy reopened – allowing some companies to pay down some of their more critical debt to avoid court action.

BEG Daily Candle Chart

BEG Daily Candle Chart

Ideagen transitioning successfully to SaaS model

Ideagen’s (IDEA) Final Results, released last week, indicated the compliance software group is transitioning successfully to a software as a service (SaaS) model.

Regulatory compliance requirements saw Ideagen win more than 550 new customers during the year despite challenges brought by the pandemic.

Total recurring revenues jumped 26% to £54.2m and now represent more than 80% of total revenues. Breaking that down, recurring SaaS revenues surged 47% to £32.2m, representing 49% of total revenues.

Ideagen CEO, Ben Dorks commented:

“We have a highly cash generative business and this, when combined with the successful fundraising earlier this year and the extension of our debt facilities, puts Ideagen in an excellent position to fund organic growth and pursue our strategy of acquiring businesses that extend our leadership in compliance software for regulated industries.”

The shares have consolidated last years gains and now look ready to retest their trend highs.

IDEA Daily Candle Chart

IDEA Daily Candle Chart

Kape retest trend highs on upbeat update

Kape Technologies (KAPE) expects to record a 79% increase in adjusted earnings with strong trading throughout the first half of 2021.

The digital security and privacy software business said momentum across the group’s core privacy division continued in the first half with a 17% growth in revenues. Kape’s digital security segment also returned to growth with a 9% increase in revenues compared to H1 2020.

Kape CEO, Ido Erlichman commented:

“We are pleased to report a strong start to 2021 with demand for our products continuing to gather further momentum, supported by a growing number of customers choosing to take more than one of Kape’s products, as the very real need for individuals to both protect and secure their online presence becoming more acute.”

The shares have been a standout performer in our AIM Investor portfolio and last week’s bullish trading update has sparked fresh buying appetite – driving the shares to new trend highs.

KAPE Daily Candle Chart

KAPE Daily Candle Chart

Learning Tech’s acquisitions bedding in nicely

Learning Technologies (LTG) released a Half-Year trading statement last week – sparking another push higher in their share price.

The digital learning specialist said it delivered a ‘robust’ performance in the first half of the year, in-line with management expectations. 

Learning Tech expect group First Half revenues to increase 29% to approx £82.5m despite challenging exchange rate headwinds compared with the same period last year.

The update highlighted the group’s Content & Services division where growth of 14% has been driven by increased demand for LEO’s blended learning and Affirmity’s diversity & inclusion (D&I) solutions.

Learning Tech’s Q1 acquisitions are also performing well…

“Both Bridge and Reflektive, which were loss making at the time of acquisition, are now profitable and have combined well with LTG’s other software offerings.  PDT continues to demonstrate strong growth and, operating alongside LTG’s Affirmity D&I offering, the combined business is enjoying increased momentum with a unique data-driven solution” – read the update.  

The shares have surged to new highs this week and we’re more than happy to continue to hold them in our portfolio.

LTG Daily Candle Chart

LTG Daily Candle Chart

Science Group surge higher on Interim Results

Our position in consultancy firm Science Group (SAG) has got off to the best possible start with two bullish trading updates in less than a month…

The shares surged higher this week following the release of their Interim Results which saw H1 results come in “ahead of the Board’s upgraded expectations”.

First Half revenues were £40.7m up 10% on H1 2020 and up 16% on constant currency basis. Adjusted operating profit jumped 47% to £7.25m, and the balance sheet remains strong with gross cash of £29m and net funds of £13m.

“Due to the Group’s strong cash generation, self-funding of acquisitions and share buy-back programme, this strong performance has been achieved without shareholder dilution” read the statement.

It’s very early days for our position having entered at the start of the month, but we welcome the market’s bullish response nonetheless.  

SAG Daily Candle Chart

SAG Daily Candle Chart


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