3rd Aug 2023. 8.58am

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Regency View:


Alumasc posts resilient trading update amid challenges

Alumasc (ALU) provided a trading update for FY 2023, showing resilience in a tough UK construction sector.

The sustainable building products company expect revenue of around £89m, similar to last year, despite challenges like weak demand in residential markets and project delays.

Alumasc’s focus on customer service, new products, and cost management drove growth in commercial markets. Operating free cash flow improved in the second half due to normalised working capital and higher Q4 capital expenditure.

Looking ahead, Alumasc foresees continued demand challenges in 2023, but overseas project contributions may help. They remain confident in long-term prospects, given sustainability focus and niche market presence.

The market reaction has been broadly positive with the shares continuing to bounce from long-term support.

ALU Daily Candle Chart

ALU Daily Candle Chart

Bango deliver 88% revenue growth on new DVM contracts

Bango (BGO), the global platform for data-driven commerce, announced a strong first half of FY23 with 88% revenue growth, reaching $20.3m.

The Bango Digital Vending Machine (DVM) drove growth, with recurring revenue (ARR) up 64% to $5.6m. New DVM contracts with BenefitOne and two US telcos, including a top 5 operator, are set to generate ARR in the second half of the year. Bango DVM now serves 61% of US consumers, boosting recurring revenue.

Adjusted earnings (EBITDA) for the first half are expected to be -$0.4m, reflecting integration costs with DOCOMO Digital. Progress is on track to deliver $19m of the $21m guided cost synergies, and full-year EBITDA aligns with market expectations. Gross profit margin remains high at 90%, and net cash as of 30 June 2023 is $13.4m.

Paul Larbey, CEO of Bango said increasing DVM traction in the US market. He noted the high-profile launch of Verizon +Play and exciting deals in the pipeline, positioning Bango for a promising future as a global data-driven commerce platform.

BGO Daily Candle Chart

BGO Daily Candle Chart

CentralNic confident of meeting full year expectations

CentralNic (CNIC) the global internet company, has reported a strong first half performance.

Gross Revenue is expected to reach at least $396m, a growth of 18% year-on-year, with Net Revenue and Adjusted EBITDA increasing by 11% and 15%, respectively.

As of 30 June 2023, CentralNic’s cash position stood at $83m, and its Net Debt was $68m. While there were non-operating cash outflows due to the acquisition of its own shares and maiden dividends, the company’s Adjusted Cash Conversion remained impressive at 89%.

CentralNic has also undertaken a second share buyback program announced on 3 July 2023, demonstrating its confidence in generating strong operating cash flows. Up to that date, the company has bought back 5.7mshares at a cumulative cost of £6.7m, with more than £27m still available for further buybacks.

CEO Michael Riedl remains confident in the company’s ability to meet market expectations for the full year. CentralNic’s unaudited Interim report will be published on August 14th and investor events will follow.

CNIC Daily Candle Chart

CNIC Daily Candle Chart

Delays challenge Ceres Power’s growth prospects

Fuel cell specialist, Ceres Power (CWR), has recently announced yet another setback in its Chinese joint venture agreement, adding to the challenges the company faces in this crucial market.

The delays in finalising the joint venture agreement with Chinese partners Bosch and Weichai have been a cause of concern for Ceres Power, impacting their revenue projections and growth plans.

Unforeseen factors beyond Ceres Power’s control have led to repeated delays in reaching a final agreement. Despite the strong commitment from Bosch and Weichai, the process has faced obstacles, leading to the postponement of the expected signature date.

As a result, the revenue associated with the China joint venture is now unlikely to be recognised in the current year, affecting the company’s financial projections for 2023.

While these delays are certainly a setback for Ceres Power, the company remains resilient and positive about its overall growth prospects. It’s recent trading update indicates that the company is actively engaged in discussions with potential new license partners, indicating that it is not solely reliant on the Chinese joint venture for expansion.

CWR Daily Candle Chart

CWR Daily Candle Chart

eEnergy shines bright with 50% revenue growth

eEnergy (EAAS), the net zero energy services provider, has reported strong growth in its full-year trading update for the 12 months ending June 2023.

Revenue increased by 50% to £33.1m, with Energy Services and Energy Management divisions both showing impressive gains.

Adjusted EBITDA rose by 55% to £4.7m and the Group cleared historic overdue amounts, strengthening its financial position.

In terms of outlook, eEnergy said contracted revenue book continues to be robust, providing good visibility for Q5/Q6 revenues. As of June 30, 2023, the Forward Order Book stood at £27.5m, with an expected £14.1m conversion into revenues during the six months ending December 31, 2023.

With strong demand for its net zero energy services, high customer retention, and improved cross-selling rates, eEnergy is well-positioned to build on its profitable growth and further strengthen its position in the market.

EAAS Daily Candle Chart

EAAS Daily Candle Chart

Gamma reports promising growth in new products

Gamma Communications (GAMA) reported strong first half numbers with promising growth in its new products.

One of the standout performers in Gamma’s new product lineup is the Microsoft Teams voice integration. This solution enables businesses to seamlessly integrate their communication systems with Microsoft Teams.

Another noteworthy addition to Gamma’s product portfolio is PhoneLine+ which offers advanced features and flexibility. This software solution has witnessed accelerated uptake – helping to drive Gamma’s growth in the first half of the year.

CEO Andrew Belshaw expressed his enthusiasm for the growth achieved through the new product offerings:

“Our newer products, from Microsoft Teams voice integration to PhoneLine+, are performing well and we are pleased with our improved progress in Europe”.

Gamma said its balance sheet is robust, with closing net cash of approx. £121.5m and Gamma expect to meet market forecasts for the full year.

GAMA Daily Candle Chart

GAMA Daily Candle Chart

hVIVO reports record growth and strong orderbook in 2023 first half

hVIVO (HVO), the world leader in human challenge clinical trials for infectious and respiratory diseases, has reported a strong first half of 2023.

The company experienced revenue growth of 52% to reach £27.3m compared to the same period in 2022 when it was £18m. This impressive performance is a result of the delivery of a higher number of human challenge trials and increased total contract value.

Additionally, the company’s EBITDA margin improved to approx. 19% from 12.7% in H1 2022, indicating enhanced operational efficiencies and successful execution of larger trials.

hVIVO’s financial position also strengthened, with net cash amounting to £31.3m as of June 30, 2023, compared to £15.9m in H1 2022. This healthy cash generation was further boosted by a special dividend payment of £3m.

Furthermore, the weighted contract orderbook showed significant growth, reaching £78m as of June 30, 2023, up from £70m in the same period in 2022.

Looking ahead, hVIVO is confident in achieving its full-year revenue guidance of £53m for 2023, with EBITDA margins expected to be in the mid to high teens.

HVO Daily Candle Chart

HVO Daily Candle Chart

Keywords revenue growth slows and debt position worsens

In a trading update posted this week, Keywords Studios (KWS) reported first-half revenue of €383m, showing organic growth of 10%.

While there was strong demand for content creation services, the weaker mobile market negatively impacted player support services and marketing.

The underlying operating margin was 15%, meeting the company’s medium-term guidance. However, the company shifted from a net cash position of €10 million to a net debt position of €82m due to the investment in acquisitions.

Despite the increase in debt, Keywords appears to be in a solid position with a diverse service offering and strong client relationships driving respectable growth even in challenging times.

Looking ahead, structural growth drivers in the video gaming market, such as the emergence of streaming models and the shift to mobile, present Keywords Studios with an opportunity to accelerate growth again.

KWS Daily Candle Chart

KWS Daily Candle Chart

Netcall’s Trading Update: Strong cloud momentum and $20m contract renewal

Netcall (NET) has reported positive trading results for the year ending June 30, 2023.

The customer engagement software provider said full year revenues had grown by 18% to £36m, and adjusted earnings (EBITDA) had increased by 25% to £8m.

Netcall’s main growth driver was its cloud offering, with cloud annual contract value (ACV) increasing by 21% to £18.1m. Netcall’s strong business performance generated a year-end net cash position of £24.8m, with no debt.

Furthermore, the company has renewed a significant contract with a S&P 500 financial services firm, valued at $20m over five years, representing a $6m uplift to the remaining contract value.

Netcall’s CEO, Henrik Bang, expressed confidence in the company’s long-term prospects, driven by healthy demand for their solutions and the successful contract renewal.

“The renewal of our landmark contract with a large global financial services firm is a strong endorsement of the quality of our solutions and we look forward to supporting the Customer’s digital transformation ambitions”.

NET Daily Candle Chart

NET Daily Candle Chart

Sylvania Platinum reports strong performance and positive outlook

Sylvania Platinum (SLP) released a Q4 operations update which showed strong production levels.

During Q4, Sylvania’s Dump Operations (SDO) produced 19,072 PGM ounces, surpassing the previous quarter’s production of 17,926 PGM ounces. For the entire fiscal year 2023, SDO achieved 75,469 PGM ounces, a significant improvement compared to the previous year’s production.

Sylvania exceeded its production forecast for the year, which had been increased from 72,000 to 74,000 PGM ounces. Sylvania recorded $24.4m in net revenue for the quarter, slightly lower than the previous quarter’s revenue while earnings for the quarter stood at $7.8m.

Despite challenges from a lower PGM basket price, Sylvania maintained a strong cash position, with a balance of $125m as of 30 June 2023.

CEO Jaco Prinsloo expressed satisfaction with the company’s performance, citing the strong finish to the financial year:

“I am very pleased with the strong finish to the financial year where the SDO achieved 19,072 ounces for the quarter. This performance was achieved on the back of a solid production effort from all operations, with all plants exceeding production throughput targets, as well as the contribution of the Tweefontein MF2 circuit that also added to our performance”.

SLP Daily Candle Chart

SLP Daily Candle Chart

Inspecs strong cash generation starts to pay down debt

Inspecs (SPEC) released a positive trading statement last week which showed solid revenue growth and strong cash generation.

The eyeware designer reported a solid trading performance, with revenue increasing by 6% to £111.1m compared to the same period in 2022. On a constant currency basis, revenue grew by 2.3% to £107.2million.

In addition to robust revenue growth, Inspecs showcased strong cash generation, leading to a reduction in net debt by £5m to £22.6m.

Inspecs CEO Richard Peck commented:

“I am pleased that the positive momentum that we experienced in Q1 continued into Q2 and that all of the Group’s major markets have performed consistently in H1 2023. We continue to focus on our strategy of driving sales and improving operational efficiency”.

“As a result of this performance in the first half of the year, notwithstanding the ongoing macroeconomic uncertainties, the Board remains confident in delivering full year results in line with market expectations.”

The shares are firmly on the road to recovery and up more than 170% year to date.

SPEC Daily Candle Chart

SPEC Daily Candle Chart

Yu Group’s trading update sparks optimism with impressive growth

Yu Group’s (YU.) share price surged to new highs last week after the release of a bullish half year trading update which showed impressive growth in revenue, monthly bookings, EBITDA margin, and smart meter rollout.

The independent energy supplier saw a substantial 56% increase in the number of supplied meter points, reaching an impressive 39,700 compared to the previous year.

Yu also reported record monthly bookings of £51.3m achieved in H1 23, representing a 109% increase compared to the previous financial year.

Another positive is Yu’s “Digital by Default” strategy which is leading to an improvement in operational leverage and increased earnings margin.

As a result of the accelerating revenue profile and increased margin, Yu said it “expects to report results substantially ahead of current market expectations”.

YU. Daily Candle Chart

YU. Daily Candle Chart


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